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[Two-timer]

Here's the very real mess our government has created. If I was a Chinese government top official, I'd be real worried and view Geithner as talking "with forked tongue." Two

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Jun 4, 2009
AsiaTimes

China needs no sales pitch
By Axel Merk

US Treasury Secretary Tim Geithner's trip to Asia has been heralded as a sales trip aimed at convincing the Chinese to keep buying US Treasuries and thereby finance US deficits. Such headlines are, in my humble opinion, an insult to the Chinese.

Over and over again, we fall victim of the temptation to believe that Chinese leaders act in a vacuum, dictating policies out of a closet. Chinese leaders know very well the state of the Chinese, the US, and the world economy; they don't need a sales pitch. So what's the purpose of Geithner's trip then?

There's a saying that when you owe the bank a dollar, it is your problem. But if you owe the bank a million dollars, it's the bank's problem. Well, the US owes China US$767.9 billion worth of US Treasury securities (Chinese holdings as of March 2009) in addition to agency and other securities; in total, China owns about $1.4 trillion in US assets. This is definitely China's problem. If this is a case of "The Emperor Wears No Clothes", then the Chinese and the US are in the same boat in trying to convince the world to buy US Treasuries.

http://www.atimes.com/atimes/China_Business/KF04Cb01.