Sunday, July 05, 2009

India & Russia join China in call for "supervision" of US fiscal policy

While some people live in a world where President Obama's promises of tax cuts and increased spending have no negative impact on The Working Man, others view the Bush / Obama fiscal policy of deficit spending as problematic. And no, it's not just me who recognizes that the Ben Bernanke plan of "monetizing" America's debt by pretending that money grows on trees is another irrational excursion into his dreamland of greenshoots and good times.

As I previously mentioned, China wants greater "supervision" of America's fiscal policy. And now Bloomberg has reported that India and Russia agree.

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France...

China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

This is simply unreal to me. America is now in a position where we will soon be overtly taking direction from China. And while President Obama seems to have no idea about monetary policy, he's still doing as the unelected Ben Bernanke tells him to do... all the while ignoring (at best ignoring, at worst opposing) Ron Paul's bill to the Audit the Fed.

At this point, I'm not convinced the US dollar will survive the Obama Presidency.

Tim White


Anonymous said...

Paul Krugman doesn;t think the deficits are high enough

Of course, he told Greenspan to create a housing bubble in 2002. Amazing how often you can be wrong and still be thought of as the world's brightest economist

Anonymous said...

World's brightest economist is Martin Armstrong