A Credibility Gap
Treasury Secretary Timothy Geithner assured the Chinese about the US dollar yesterday:
“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, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.
One hopes that Mr. Geithner relays that message to his boss. When foreigners are laughing at your Treasury Secretary, I think you’ve got a bit of a credibility gap.
- June 1st
[...] More: A Credibility Gap [...]
[...] Treasury Secretary Geithner visited China last week to assure our largest creditor that the US was serious about controlling government deficits and protecting the dollar denominated assets China has so generously accumulated. The official Chinese response was polite, but the response from a group of Chinese students was less constrained by the niceties of diplomatic exchange. They must have thought Geithner was part of some cultural exchange program because faced with such an obvious joke - and not wanting to insult a visitor - they laughed long and hard. [...]