Treasury Sec. Geithner is over in India trying to bring them on board with pressing China to cut back on exports by revaluing China‘s currency. India had for a long time avoided buying into the flat earth nonsense but their version of neo-cons had been recently pushing them into it. Small business thrives in India, Walmart is allowed only one store, but the neo-cons have been throwing money around in an effort to change all that. The result of their influence so far is that India is running a huge trade deficit with China and the Indians find that to be politically untenable so Geithner’s comments appear to be welcome.
Geithner on Indian TV, "I am confident that China will decide it's in their interest to resume the move to a more flexible exchange rate that they began some years ago and suspended in the midst of the [financial]crisis.” …
“As we [the US] move to an economy that is saving and investing more, we want to see broader reforms outside of the US,” Mr Geithner said. “This is in the interest of the world to produce stronger demand and growth, like you are seeing in India today.”
Of course Geithner doesn’t really mean that he expects Americans to start saving and investing any time soon. Savings accounts pay nothing and 401k’s are just a place to flush your money away. The only reason the savings rate is above zero is that people can’t get credit and are forced to save to buy things. What the Secretary really means is that the US is either going go back to tariffs of some kind or the economy is going to collapse and take India with it, the Indians understand this. India added a hundred tons of gold to its inventory and may buy more from the IMF. The gold that the IMF sells comes from its members with the US being the largest holder of gold, so most or all of it came from Fort Knox.
Simultaneously the US is pressing the Europeans to require their banks to hold more capital which would bring to a halt all the market speculation. The US would need to do the same with Wall Street banks and they won’t be very happy. But they just grabbed off another 150 billion in bonus money so they can probably get by for awhile. They are doing much better than the 200,000 Americans who had their unemployment cut off this week by the Republicans in the Senate. If the unemployed would funnel millions to the Republicans they would be better treated too. Stupid unemployed people, they don‘t understand capitalism at all. www.prairie2.com