The Chinese government, and their press, is demanding to know how the U.S. will shore up its fiscal problems and growth.  They are worried about the devaluation of their dollar and Treasury Bond holdings.  

I want to know that too.  But I did not have a material part in causing the problem.  I am not currently contributing, in a substantial way, to the problem even as I ask the question.

China’s explosive growth comes/came through their single minded export strategy.  This means they depended upon the consumption of others.  And depended upon taking the productive capacity from others.  This was not a "natural" occurrence.  But rather from strategic dictatorship capitalism using currency manipulation, creative and fluid VAT strategies, piles of government money building major industries, etc.

That is their right.  And it is our right to respond.  Unfortunately we were too dim to see through the win-win free trade rhetorical fantasies that do not describe the dynamic.

But I digress.  China worries about the economy of their debtor… America.  Their policies caused their growth while sucking productive assets and dollars from us.  Now they worry about what we will do about it.

The hypocricy is breathtaking.  I do wonder what Geithner is saying.  Some of his words are interesting, even though Treasuries actions in the U.S. have been depressing.

Geithner said, "We want to be very careful that as we come out this we don’t recreate the conditions established really in the last recovery that led to, helped contribute to this extraordinary financial and economic crisis."

Good.  Don’t know what it means, but the conclusion is true.

This may be a more interesting comment.  An acknowledgment that we cannot continue consuming at the same rate.

"The world is not going to be able to look to the United States as it was able to do in the last several recoveries and expect consumption in the United States to lead the world out of this," Geithner said.

A true and worthy goal.  Don’t know the strategy.  Haven’t seen evidence of it.

And how about this.

[Geithner] said the U.S. would make sure its current account deficit is reduced and would increase its savings rate. 

Reducing the trade deficit.  A good thing.  I have no idea how he plans to cause that result.  Certainly the Coalition for a Prosperous America has some ideas.  He hasn’t called yet.

But wait… there’s a message on my answering machine.  Perhaps that’s him.