Tuesday, September 08, 2009

"He who goes borrowing, goes sorrowing" - Ben Franklin

Ambrose Evans-Pritchard of the London Telegraph reports on China's unease with US monetary policy:

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"....

"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....

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

"He who goes borrowing, goes sorrowing," said Mr Cheng.

It was a quote from US founding father Benjamin Franklin.

Oh wait... silly me. President Bush's failed economic team President Obama's failed economic team (Bernanke and Geithner) said "Trust us. Just do as we say and everything will be fine."

Whether America experiences more deflation or inflation over the next few years, one thing is certain: America's standard of living is going to fall. I just hope the politicians in Washington are honest about it. The sooner they get past the denial stage, the sooner we'll head toward a robust recovery.

Tim White

1 comment:

Anonymous said...

A few more Benjamin Franklin quotes:

"Think what you do when you run into debt; you give another power over your liberty."

"When the people find that they can vote themselves money, that will herald the end of the republic. Sell not liberty to purchase power."