While America’s Treasury Secretary is best known for getting a free pass after cheating on his taxes, he also is becoming a bit of a global embarrassment. At a recent speech in China, students laughed when he claimed the dollar is strong. Unlike the politicians in Washington, the students understand that a reckless monetary policy and profligate fiscal policy is putting America on a path to become anther Argentina:
U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency. A major goal of Geithner’s maiden visit to China as Treasury chief is to allay concerns that Washington’s bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds. China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China’s total U.S. dollar-denominated investments could be twice as high. “Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s. His answer drew loud laughter from his student audience.