Geithner’s Search for Scapegoats Avoids the Harsh Truth No One Wants to Hear

Instead of admitting the United States’ role in the global economic mess, Geithner Signals China Causing Global Currency InterventionsU.S. Treasury Secretary Timothy F. Geithner blamed China’s policy of limiting gains in the yuan for contributing to a round of capital controls and currency-market interventions by emerging economies.

“What’s happening is, as China holds its currency down, their currencies are moving up and they’re having to work very hard to make sure they’re not at an unfair disadvantage with China,” Geithner said in an interview with “Charlie Rose” scheduled to air on PBS yesterday and Bloomberg Television today.

Countries from Brazil to South Korea and Thailand have sold their currencies in recent weeks to curb gains that threaten to impede export growth and slow their economies. South Korea, Taiwan, Brazil, Colombia and Russia are tightening rules on capital flows to limit swings in their currencies.

“This issue, which people like to frame as uniquely an American preoccupation, is really much more important to the rest of the world and is really a global problem as a whole,” the Treasury chief said.

As talks among officials from the Group of 20 nations began in Washington last week, Geithner warned of a “damaging dynamic” of competitive currency weakening that could limit global growth and said “more and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies.”US Problems are Largely of US Making

Can someone, anyone, tell me why it is OK for the US to openly attempt to trash the US dollar, but it is not OK for other countries to do the same?

Yes, China is clearly part of the problem, but so is the US, Japan, the UK, and every other country that actively pursues a weaker currency hoping beyond hope to stimulate exports at the expense of everyone else.

Yesterday I spoke about capital controls in Emerging Market Economies Turn to Capital Controls; Forex Market in State of Disarray; Gold’s Message; Life Imitates Art.

After 18 holes of golf, I return to find Geither blaming China for emerging market capital controls and the currency interventions of Japan.

Does anyone believe that if China floated the Yuan it would solve the world’s problems? Hells bells, would it solve any of them?

The critical problem in the US is government spending is out of control at the same time consumers are overleveraged in debt. There is no painless solution! Anyone who promises one is an idiot or a charlatan.

Republicans Need to Admit US Cannot Afford to be World’s Policeman

Regardless of what Republicans may think, we can no longer afford to be the world’s policeman.

For details please see Cost of War Since 2001; Federal outlays and revenues, 1940-2015.

Democrats Need to Admit Problem with Public Unions

States are bankrupt because of pension promises that cannot and will not be met. Public unions have destroyed states and municipalities.

State pension plans are $3 trillion in the hole. For more details, please see Interactive Map of Public Pension Plans; How Badly Underfunded are the Plans in Your State?

Thus, no matter what Democrats think, we cannot afford our love affair with public unions, union wages, and most importantly, union benefits.

Both parties need to rework the healthcare bill so that it contains provisions that will actually encourage lower costs and not damage small businesses. The bill as it sits made matters worse.

Search for Scapegoats Avoids the Truth

Somehow, some way, if you listen to Geithner and Krugman, all of these problems are supposed to go away if only China would float the Yuan.

Well Geithner’s head is up his ass because none of this will go away as long as the US looks for scapegoats instead of admitting reality. That reality is we are on the road to bankruptcy and neither Keynesian nor Monetarist stimulus will help.

Our problems are structural in nature and everyone needs to admit there will be no quick solutions and we cannot spend our way out of this mess. The only thing that can put the US back on track is fiscal prudence and sound monetary policy. Unfortunately, no one wants to hear the truth.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Bookmark and Share
Posted by Michael Shedlock at 7:58 AM…. Print…. Email

To sign up for a free copy of our Monthly Client Newsletter, please register your email address at the bottom of the Sitka Pacific Commentary Page.

Buy Gold and Silver Online at GoldMoney
The Best Way to Buy Gold and Silver

Disclaimer:The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Comment Guidelines: Comments should be succinct, constructive and relevant to the story. We encourage engaging, diverse and meaningful commentary. Comments that include personal attacks, racial, religious, or ethnic slurs are not permitted. We continuously review and remove any inappropriate comments.

Comments(0)

Newer PostOlder PostHomeSubscribe to:.About Mike Shedlock Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Continue reading…    
 Mish Audio VideoMish with Marc Faber 2010-03-12
“Inflation or Deflation?” Debate: Mish vs. Dr. Doom

On the Edge with Max Keiser 2010-02-12
Spotlight on China, Japan, Jobs, Pensions, Part 1

Spotlight on China, Japan, Jobs, Pensions, Part 2

Tech Ticker 2009-12-09
“Bank Lending, Jobs, The Great Retrace

King World News October 30 2009
Mish and Eric King discuss Gold, the Stock Market, the US Dollar, Sideline Cash, China, and US real estate

May 2009: My Speech at Google – on Blogging and the Economy
Thoughts on Blogging and the Economy – Speech at Google

Podcasts Every ThursdayHoweStreet

May 18, 2009Jay Taylor and Mish discuss deflation and other issues on Voice America

April 27, 2009
The Lew Rockwell Show – “It’s Fallen and It Can’t Get Up”

April 26, 2009
TDI Podcast 106: ZeroHedge and Mish-O-Nomics

January 25, 2009TDI Podcast 92: An Unavoidable Depression? (Dent and Shedlock)

January 7, 2009Commodity Watch Radio – 2009 : Mish and Mike Hampton Give Their Views

November 12, 2008
The Lew Rockwell Show

October 23, 2008
TDI Episode 80: Predicting another 40% DOWN

October 17, 2008
Commodity Watch Radio – A look at the markets Michael Hampton, Mish

August 24,2008
Commodity Watch Radio – Inflation or Deflation? Part 1 James Turk, Michael Hampton, Mish

 John Dennis Beat Pelosi Mish Endorsement of John Dennis  Lawson for Congress Mish Endorsement of B.J. Lawson  Doug Cloud For Congress Mish Endorsement of Doug Cloud  
 
 
Calculated RiskLoading…naked capitalismLoading…Steve Keen’s DebtwatchLoading…oftwomindsLoading…Acting Man Austrian Economics DiscussionLoading…Copyright 2009 Mike Shedlock. All Rights Reserved.View My StatsHomeAboutContactSitka Pacific.js-kit-comments { background-color: #ffffff; } white-space: nowrap; color: #ff0000; margin: 0px 0px 0px 0px; padding: 0px 0px 0px 0px; }.js-singleComment { font-size: 9pt; color: #000000; line-height: 1.0em; margin: 0px 0px 0px 0px; padding: 0px 0px 0px 0px; font-family: Verdana, Helvetica; border: solid 1px #c0c0c0; text-align: left; }

View the Original article

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s