Jim Sinclair’s Commentary

Even the kids in China understand the future of the US dollar.

Geithner gets laughed at by Chinese students when saying $ assets are safe
June 1, 2009
Tom Bawden

Geithner tells China its dollar assets are safe

Mr Geithner, in China on his first visit as US Treasury Secretary, reiterated that US would cut its huge fiscal deficits

Timothy Geithner moved today to reassure the Chinese Government that its huge holdings of dollar assets were safe as he reaffirmed his faith in a strong US currency.

Mr Geithner, in China on his first visit as US Treasury Secretary, sought to allay concerns that Washington’s growing budget deficit would fan inflation which, in turn, would undermine the dollar and US bonds.

“Chinese assets are very safe,” Mr Geithner said, answering a question after his opening address at Peking University this morning.

His answer was greeted with laughter by the students, who question the wisdom of China spending huge amounts of money on US bonds instead of improving domestic living standards.

China is the biggest foreign owner of US Treasury bonds, holding $768 billion (£468 billion) at the end of March.