Putin and Wen on Finance

"The premiers of Russia and China slammed the U.S. economic system in speeches Wednesday, holding it responsible for the global economic crisis. Both focused on the role of the U.S. dollar, with China's Premier Wen Jiabao urging better regulation of major reserve currencies and Russia's Vladimir Putin calling over-reliance on the dollar 'dangerous.' ... 'The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional center manufactures inexpensive goods ... has suffered a major setback,' Mr. Putin said. ... While Mr. Wen never names the U.S., his critique of its failings was as sweeping as Mr. Putin's. The financial crisis, he said was 'attributable to inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit'--and other excesses", Marc Chapman and Andrew Batson at the WSJ, 29 January 2009.

"We have truly entered a Bizarro World universe, where up is down, right is left--and the Russians of all people, are now lecturing us about the virtues of free enterprise. ... Putin likened the economic crisis the world is facing to 'the perfect storm, which denotes a situation when nature's forces converge in one point of the ocean and increase their destructive potential many times over.' ... Well, hang in there, dear reader, because we're just getting to the good part: 'Add to this colossal disproportions that have accumulated over the last few years. This primarily concerns disproportions between the scale of financial operations and the fundamental value of assets, as well as those between the increased burden on international loans and the sources of their collateral.' This realistic perspective is in sharp contrast to the frantic gyrations of our own political and financial leaders. ... Whether the Russian leader has been boning up on the works of the Austrian economists and has absorbed or at least understood their critique of central banking as the flaw in the otherwise beneficial ointment of Western-style capitalism, or has independently come to similar conclusions, is open to speculation. Suffice it to say the parallelism is astonishing. ... I lived to see an American president red-baited by the Kremlin! That, in itself, is utterly amazing, and proof positive that we have indeed slipped into an alternate universe, a Bizzaro World where history runs backward--and in reverse. Sounding more like Barry Goldwater than any Russian leader I have ever heard of, Putin took aim at the Obama-commies: 'Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state'," my emphasis, Justin Raimondo, 2 February 2009 at http://antiwar.com/justin/?articleid=14178.

"China will continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its 'only option' in a perilous world, a senior Chinese banking regulator said yesterday. ... 'Except for US Treasuries, what can you hold/' [Luo Ping] asked. 'Gold? You don't hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.' ... 'We hate you guys. Once you start issuing $1 trillion-$2 trillion ... we knw the dollar is going to depreciate, so we hate you guys but there is nothing much we can do'," Henry Sender at the FT, 12 February 2009.

Either Putin or Wen would make a better US Treasury Secretary than Tim Geithner.

I love this guy Putin! His arguments sound like Uncle Miltie wrote them! Wait, if Putin keeps this up, Russia will become the preferred destination for people fleeing the oppressive (American) state. Would Ayn Rand believe this? Putin may have an advantge over Obama: he may have read Marx and knows Marx favored a central bank!

Yes there is. Buy gold. Suppose China gave up on the dollar, would Luo say so? I still remember what the UK Chancellor of the Exchequer did in 1967 before the UK's pound devaluation. See my 27 September 2007 post: http://skepticaltexascpa.blogspot.com/2007/09/bush-lies-dollar-dies.html.