Friday, March 13, 2009

The Changing of "Feng Sui" Guards

It was not long ago US were lecturing Asian countries during their financial crisis in 1997-98 how they should get their house in order. Now, the wheel has turned. Chinese Premier had this to say yesterday at the end of the National People's Congress: "“We have lent a huge amount of money to the United States,” Mr Wen said. “Of course we are concerned about the safety of our assets. To be honest, I am a little bit worried. I request the US to maintain its good credit, to honour its promises and to guarantee the safety of China’s assets.”

Remember Gordon Chang's book "The Coming Collapse of China"? Its thesis was Chinese banks were all technically bankrupt. Only the printing of money to inflate out of China's negative equity balance sheets would get the banks back into solvency at the cost of hyperinflation. Substitute China with US.

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