Fed Reserve Official Says: China Concerned About US “Printing Money”

May 27, 2009

(ChattahBox)—Richard Fisher, president of the Dallas Federal Reserve Bank just returned from a trip to China, where he was grilled by Chinese officials over the United States’ actions of “printing money” in order to purchase debt by buying up its own US Treasury bonds.

Fisher claims the senior Chinese officials continually asked him if the US was “going to monetize the actions of our legislature,” which would lead to adopting a financial system like Argentina’s.

Fisher arrived back on US shores to sound an alarm about the fears of the Chinese who have significant investments of surplus cash in the United States.

Fisher is against the purchasing of treasury debt, believing it could cause the United States to lose its AAA sovereign rating. He added that purchasing of treasury bonds by the Fed could blur the lines between fiscal and monetary policy, leading to out of control spending.

Fisher admits drastic steps were needed to curtail the serious economic downturn America faced, but he still worries over inflation taking over the economy. Now, the economy is in a state of mild deflation, said Fisher.

Meanwhile, Fisher a fiscal hawk and supporter of the economic theory of “creative destruction,” is also sounding the alarm over the un-funded pension and health-care liabilities that can severely affect our economy.

Fisher believes the total amount of un-funded pensions and health-care liabilities is over $99 trillion, and our political leaders need to step up and find a solution to the problem.

Source


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  1. Printing » Fed Reserve Official Says: China Concerned About US “Printing … on May 27th, 2009 1:06 pm

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