Chinese Central Banker Characterizes America as "weak"

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Rector
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Joined: Feb 7 2010
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Chinese Central Banker Characterizes America as "weak"

Chinese Banker Faults Greece Efforts

Zhu Min says crisis needs decisive action to show it can be solved; tells conference China should import more goods

By ALEX FRANGOS and KATIE MARTIN

A senior Chinese central bank official criticized the handling of the Greek debt crisis, highlighting global concern about the situation in Europe.

Speaking at a conference in Hong Kong, Zhu Min, deputy governor of the People's Bank of China, also said China "should and could" import more goods to keep its trade surplus small. And he noted that the central bank's efforts to tighten monetary policy were having their intended effect, even without China having to raise interest rates.

"I don't think Greece will go bankrupt because it's still relatively small," said Mr. Zhu. "But we don't see decisive actions to tell the market we can solve it."

Mr. Zhu called Greece "just one case," but also the "tip of the iceberg," and warned that fiscal problems could spread to Spain and Italy. High levels of debt throughout the developed world, he said, would keep growth low for several years.

"The U.K. is weak. America itself is weak, because in a two- to four-year horizon, U.S. debt will climb to 110% [of GDP] and stay there for awhile," he said.

"The governments tried to put every burden from the financial sector onto their own children. Now they find nobody can save them," he added, referring to the large amounts of government debt issued to fund bank bailouts and stimulus programs in the West during the crisis.

Rector's picture
Rector
Status: Platinum Member (Offline)
Joined: Feb 7 2010
Posts: 515
Re: Chinese Central Banker Characterizes America as "weak"

I have never heard the Chinese speak  so openly to the truth about America's debt.  After all, they have an interest in maintaining the value of their reserves.  Why the change?

They understand the nature of the situation, and I think they are preparing the markets for their eventual abandonment of the Dollar as a reserve currency.  When will we hear the dreaded "default" word come out of the Central Bank in China?  

Could they use statements like this to catalyze a collapse?  Would they?

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: Chinese Central Banker Characterizes America as "weak"

Its the 50 trillion pound elephant in the room. Eventually they will start talking about it openly

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