Timmy to the Chinese: “We’re all comrades now”
I have often said that the U.S. is not in a position to smack its largest creditor in the face as seems to be happening more regularly, especially regarding the renminbi peg and trade barriers. I have been wondering how the conversation about these issues was running between Timmy and the Chinese, but there is no need to guess as Dave Galland over at Casey Daily’s Dispatch have come up with a possible script for the “negotiations”.
Timmy: “Okay, what do you guys want?” Timmy asks nervously.
Chinese: “We need access to U.S. markets, because if we can’t get all these empty factories humming, we’re going to get strung up by our collective heels.”
T: “And so you want us to do what?”
C: “For starters, pretty boy, tell your most esteemed party members to stop yapping like diseased dogs about our currency. And stop all this talk about tariffs. We got business to do, and that business is selling your peasants cheap stuff. “
T: “We can do that. But in exchange, you have to keep showing up at our Treasury auctions. Use that big pile of foreign reserves to buy a ton of Treasuries over the next couple of years. That way we can try to buy our way out of this damn recession while keeping rates low. That works out well for you guys, too, because it will mean that our peasants will still be able to afford the stuff made by your peasants. That’s what we Americans like to call a ‘win-win’.”
C: “But then we’ll end up with even more Treasury paper. Already it’s getting hard to find a place to stash all of it. And if you keep cranking the stuff out like a noodle shop, then in time it will be worthless.”
T: “I hate to break it to you, but it’s already pretty much worthless. We’re so broke that I had to pass on the lobster last night. Your only hope is to keep the shell game going a little longer – you know, buy us some time to work this thing out.”
C: “Can’t you just invade Canada? They got lots of resources, but they don’t have no nukes. Kind of like Tibet.”
T: “Let’s just say that all options are on the table. But for now, all that’s required is that you just keep showing up at the Treasury auctions.”
C: “We are going to want some special considerations, starting with losing that whole currency manipulator thing.”
T: “Well make it go away. After all, we’re all comrades now.”
Yeh, sure “we’re all comrades now”.
Source: Casey’s Daily Dispatch, April 8, 2010.
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