Comments on: Chinese economist sounds off on US monetary policy

By: Winslow R.

Winslow R. — Thu, 10 Dec 2009 21:24:54 +0000

Latest Z1 is out and it shows debt growth total of both the public and private sectors slowed in 2009 Q3 to 2.8%. Government does seem to be increasing debts at rates last seen in the 70′s but the 70′s didn’t have falling private sector debt.

http://www.federalreserve.gov/releases/z1/Current/z1r-2.pdf

With December’s Job Summit to add maybe $80 billion in spending, things are looking more and more like a double dip. I just can bring myself to the conclusion that Obama would let this happen so am still heavily invested in the markets (still hasn’t said its time to sell).

Figured if there was a market sell off, it would be in January after Goldman Sachs gets their bonuses but purely to push a more aggressive political agenda. Can’t imagine government/GS would allow the market to go down very far.

By: Paul M

Paul M — Thu, 10 Dec 2009 20:54:16 +0000

Mr Xie just sounds like an old lady complaining about getting 1% on a CD. Welcome to the club! The only difference is he has no other banks to shop the US Treasury against!

By: warren mosler

warren mosler — Thu, 10 Dec 2009 19:04:58 +0000

you’re hired!
;)

By: RSG

RSG — Thu, 10 Dec 2009 18:16:39 +0000

Of course that’s only if you believe we borrowed $1 trillion from China…which we didn’t. We bought their goods and they got our dollars and simply put them in an interest-bearing account (treasuries). When those treasuries mature they will simply shift back into non-interest accounts or roll into new treasuries.

By: JCD

JCD — Thu, 10 Dec 2009 17:54:17 +0000

Perhaps Mr Xie should have thought about that before China lent the US $1 trillion. Of course he could sell now, but that might let his currency appreciate …

By: Curious

Curious — Thu, 10 Dec 2009 17:43:57 +0000

“Xie accused the Fed chief of â€œpoisoningâ€ the U.S. economy by keeping interest rates near zero and creating a tidal wave of newly printed paper dollars.”

The natural rate of interest is 0. Mr. Xie should read “mandatory readings” on this site.

As far as the Fed printing new dollars, I can see his point. What’s the difference, from his perspective, between Mr. Bernanke printing at the Fed and Mr. Joe Blow printing in his basement?