Is the Fed fooling anyone?
*AP, by Martin Crustsinger, June 2, 2009:
"As the federal budget deficit soars into the stratosphere, Treasury
Secretary Timothy Geithner is reassuring the Chinese — the largest
holders of U.S. government debt — that the Obama administration is
serious about restoring fiscal discipline once the current economic
crisis is resolved.
Geithner, making his first trip to China as treasury secretary with an
itinerary that included meetings later Tuesday with Chinese President
Hu Jintao and Premier Wen Jiabao, used a major economic policy address
Monday as well as separate meetings with top Chinese officials to
deliver that message.
'As we recover from this unprecedented crisis, we will cut our fiscal
deficit, we will eliminate the extraordinary government support that we
have put in place to overcome the crisis,' Geithner said in a speech to
students at Peking University, which Geithner attended as a young
college student learning Chinese nearly three decades ago.
Geithner repeated that message in a round of interviews Tuesday with
Chinese media as he wrapped up his two days of talks.
'We are very committed to make sure that when recovery is established,
that we go back to living within our means, that we bring our fiscal
deficits down to a sustainable level, that we unwind and reverse these
exceptional measures that we've taken in the financial sector,'
Geithner told Chinese state television.
Geithner said he had found support among Chinese leaders for the
actions the U.S. was taking.
'I've actually found a lot of confidence here in China, justifiable
confidence, in the strength and resilience and dynamism of the American
economy and I think a very sophisticated understanding ... of the steps
we're taking and why they're so important not just to the United States
but to China and the rest of the world,' he said.
In an interview with China Daily, Geithner had praise for the actions
taken by the Federal Reserve. Geithner said Fed Chairman Ben Bernanke
had done an 'enormously impressive job in the worst financial crisis in
decades.'
Chinese officials did not comment publicly on Geithner's reassurances,
but judging from the reaction of the college students, Geithner may
still have some explaining to do.
The students peppered the Treasury secretary with questions about the
debt, the administration's massive amounts of support to the banks and
U.S. auto companies and the recent rise in interest rates on U.S.
Treasury securities."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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