China Alarmed By Obama’s Deficits, Shocking Irresponsibility

It’s sad that a communist regime quotes our own founding fathers to us, because our President and the party in power has so blatantly ignored their wisdom.  But that’s what happened, as you will see reading the following article:

China alarmed by US money printing
The US Federal Reserve’s policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

By Ambrose Evans-Pritchard, in Cernobbio, Italy
Published: 9:06PM BST 06 Sep 2009

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”.

“We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.

China’s reserves are more than – $2 trillion, the world’s largest.

“Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets,” he added.

The comments suggest that China has become the driving force in the gold market and can be counted on to
buy whenever there is a price dip, putting a floor under any correction.

Mr Cheng said the Fed’s loose monetary policy was stoking an unstable asset boom in China. “If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise.

“Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down.”

Mr Cheng said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets.

“This is where Greenspan went wrong from 2000 to 2004,” he said. “He thought everything was alright because inflation was low, but assets absorbed the liquidity.”

Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery.

China’s task is to switch from export dependency to internal consumption, but that requires a “change in the ideology of the Chinese people” to discourage excess saving. “This is very difficult”.

Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China.

“The US spends tomorrow’s money today,” he said. “We Chinese spend today’s money tomorrow. That’s why we have this financial crisis.”

Yet the consequences are not symmetric.

“He who goes borrowing, goes sorrowing,” said Mr Cheng.

It was a quote from US founding father Benjamin Franklin.

Ever heard the phrase, “own worst enemy”?  That’s the United States, to itself.  Or more particularly, that’s the president of the United States, to the country he’s supposed to be helping.

China can seriously screw us financially; they could literally bankrupt us.  They don’t want to do that, because hurting us would hurt their investment in us.  Yet the subtitle of the article drives the point home: “The US Federal Reserve’s policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy.”  We are pursuing such a fiscally reckless policy that China will be compelled to cut its losses – and truly leave us high and dry.

What Obama is doing is going to gut the U.S. currency, and China is being forced to act like a rat jumping off a sinking ship.  And just to make sure nobody fails to understand: WE’RE the ship that Obama is sinking.

Democrats – flagrant hypocrites that they are – actually had the chutzpah to demagogue Bush for his “fiscal mismanagement.” A lot of Bush’s spending WAS in fact irresponsible – but Democrats complaining about government spending is very much like Stalin complaining about Soviet gulags; it simply flies in the face of any and all reason.

When you realize that Obama’s 2009 deficit – just one year of his spending – is higher than all 8 years of Bush’s deficits COMBINED, it ought to tell you just how shockingly irresponsible Obama and the Democrats are, as well as what appalling hypocrites they are.

Just imagine putting Nancy Pelosi and Howard Dean in a time machine, and launching them six years into the future so they could see that – under total Democrat control – they would spend more than eight times more than George Bush spent in his VERY WORST YEAR.  And then realize that such is the loathsomeness of their characters that they would return to their own time and STILL demagogue Bush for his spending.  It’s just what they are. Hypocrisy is their defining characteristic, to go along with their naked demagoguery.

The danger that the Chinese point to is crystal clear.  Even key Obama-ally Warren Buffett is publicly demanding that Obama and the Democrats cut their spending to avoid massive inflation.

I would argue – in disagreement with Buffett – that we didn’t need to launch into such massive government spending (although we sure bailed out Wall Street-types like Buffett by doing so, didn’t we?).  In the initial panic, the Bush team reacted by spending, as though we could patch the holes of our debt-ruined economy by stuffing them with borrowed money.  But already, by the time Obama launched into his even more massive stimulus, it seemed readily apparent that the government wasn’t getting much of a bang for its buck – unless the “bang” was the bang of a future debt-induced economic implosion.

Think about it from this angle: do you know how small businesses are actually the driving engine of our economy and our job creation?  Well, 98% of small businesses didn’t receive any money from the Obama stimulus at all.  If fact, the National Endowment for the Arts – which recently displayed it’s pro-Obama ideological partisanship – received more stimulus funds than the small businesses that drive our economy.

By selecting Bush-appointee Bernanke to serve another term as the Chairman of the Federal Reserve, Obama was implicitly embracing most of the very Bush policies he had personally and repeatedly demagogued during the campaign.

And now in Obama’s spending we have the very worst of Bush — times EIGHT.

The Chinese are quoting Benjamin Franklin to point out America’s insanity under Barack Obama.

I would suggest another Franklin quote as well: “When the people find that they can vote themselves money, that will herald the end of the republic. “

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4 Responses to “China Alarmed By Obama’s Deficits, Shocking Irresponsibility”

  1. Arrgy Says:

    What would bush have done? You know the answer as he (bushCo) started the free fall. Obama got into a car that was already over the cliff. Should have Obama let the country go to full on depression? What a cop out for fascism.

  2. Michael Eden Says:

    First of all, it would be nice if you actually got a clue as to what “fascism” was. “Nazi” was an acronym for ““National Socialist German Workers Party,” you dumbass. You got your fascism ass-backward. Maybe it’s about time you grew the brains to think.

    Second, Bush didn’t “start the free fall.” He warned the Congress SEVENTEEN TIMES to deal with the housing mortgage industry – and Democrats blocked him. They had their own “Fannie Mae Enron” thing going on.

    Bill Clinton himself acknowledged that it was DEMOCRATS who refused to regulate Fannie and Freddie, the GSE entities that had the unique ability to bundle mortgages into the securities and then resell them that exploded the economy:

    Bill Clinton on Thursday told ABC’s Chris Cuomo that Democrats for years have been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.

    A Bloomberg article explains how Fannie and Freddie blew up the economy:

    “Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

    Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

    In the times that Fannie and Freddie couldn’t make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

    The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.”

    Peter Wallison warned in 1999 that an out-of-control AND DEMOCRAT CONTROLLED Fannie Mae and Freddie Mac would overwhelm the economy. He said, ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

    Alan Greenspan similarly warned of the coming mortgage explosion in early 2005:

    “If [Fannie and Freddie] continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road.” He added, “Enabling these institutions to increase in size–and they will, once the crisis, in their judgment, passes–we are placing the total financial system of the future at a substantial risk.”

    Fannie Mae and Freddie Mac were at the epicenter of the financial meltdown – and Democrats sheltered it at all costs.

    When Bush TRIED to regulate and reform Fannie Mae and Freddie Mac in 2003, Democrats fiercely opposed him. Barney Frank is on record saying:

    ”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

    John McCain warned during the 2nd major Republican effort to reform and regulate Fannie and Freddie in 2005:

    “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”

    Just before the entire housing mortgage industry – which Fannie and Freddie TOWER over – collapsed due to Democrats’ refusal to regulate their ideological tool and cash cow, Barney Frank said this:

    REP. BARNEY FRANK, D-MASS.: “I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.”

    So the housing mortgage industry blew up – just as Republicans had REPEATEDLY warned it would. And the very people who stood in the way of doing anything about it demagogued the people who couldn’t do anything about it only because Democrats were in lock step opposing any necessary fix. And stupid and ignorant fools like you bought it.

    For the record, unemployment was at 4.5% when Nancy Pelosi and Harry Reid and the Democrat majority took over Congress in 2006 after Bush had been president for six years. What is it now under those same Democrats?

    You ought to be ashamed of yourself for every lie you’ve bought hook line and sinker, Arrgy. It’s because of fools like you that we have Obama. Obama, who took more money from Fannie and Freddie and the most corrupt Wall Street players like Lehman Bros. than ANYBODY. And he is going to lead this country into ruin while fools like you continue to enthusiastically support him.

  3. Arrgy Says:

    Hey ________. Bush had the power to regulate wall street. He deregulated it.
    Get your fascisms right, moron. Corporate fascism is when they have the power and the people don’t. I’m talking to an idiot. Keep supporting the consolidation of wealth. When the super wealthy have it all, how much will you have?

  4. Michael Eden Says:

    First of all, I don’t tolerate cursing on this site. I altered your comment to remove your childish and immature profanity. Next time I’ll simply block you.

    Learn to read. Bush attempted to regulate the government supported entities that were at the heart of the developing problem. And it was Democrats who blocked him. You might well be too stupid to follow the news, but look what is going on with health care. A committed minority can block damn near whatever it wants to. As I documented, Bush TRIED to regulate, and Democrats blocked him at every turn.

    And you don’t even offer facts, you cretin. You offer a short paragraph of nonsense. I’M THE ONE WHO OFFERED FACTS. I offered a whole series of documented, substantiated facts. You offered nothing more than the opinion of a nincompoop.

    One of the facts that I offered was this one: “Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools.” Wall Street followed the GSEs, not the other way around. And Wall Street bought the GSE’s subprime crap that the GSE’s bundled.

    It was the GSE’s Fannie and Freddie that blew up our economy – as I documented.

    Sheldon Richman defines fascism in his Concise Encyclopedia of Economics as follows:

    “Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”–that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.”

    So it is government control over corporations that makes for fascism, you idiot. And it is Obama who is pursuing corporate fascism, and not Bush. Obama is the one who essentially nationalized the auto industry. He’s the one who put FAR more pressure on banks and on Wall Street institutions to do his political bidding than anything Bush did – not by law but by threats and intimidation. And it is Obama – not Bush – who has created a shadow government of 33 czars who are utterly unaccountable to the American people.

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