Who are the dummies: the US government or the Chinese?

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The Chinese pile up a vast hoard of US Treasuries, which artificially raises the value of the Yuan. This cannot go on for ever. When this process slows down or stops (or horror of horrors, goes into reverse), the US dollar is guaranteed to lose value relative to the Yuan (other things being equal). And then the Chinese complain when this happens!

This is a bit like an alcoholic blaming some else for damage to his liver.

As to the US government, it is equally stupid (thanks largely to “balance the budget” anti-deficit conservative Republicans). Reasons are thus. The recession has occurred largely because of excess debt. People and businesses have learned their lesson and are trying to repay this debt (or “deleverage”). Thus what households and businesses need is dollars with which to repay their debts.

So what does the US government do? Print billions of extra dollars and give it to banks in the hopes that banks will – of all things !!!! – lend it to businesses and households. Just what the latter don’t want !!!

If Laurel was Chinese president, and Hardy was US president, we would have fewer problems.