Meet Your New Boss

Ben Franklin wrote that "He who goes Borrowing goes sorrowing".

Interesting to hear those words from none other than Cheng Siwei, former vice-chairman of the Standing Committee of China's communist party. Looks like debt impacts international relations similar to interpersonal relations.

When you owe, you are your creditor's bitch. There's nicer ways to say that, but no truer way. You have to listen to moralizing crap like this from your friendly neighborhood commie creditors. Listen to some more of Cheng's rants:

"Beijing was dismayed by the Fed's recourse to "credit easing"" "We hope there will be a change in monetary policy as soon as they have positive growth again." If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies." "The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis."

Too bad for Cheng that, under his watch, China accumulated so much dollar denominated debt that they can't sell out. Cheng even admitted that when they try to swap dollar instruments for gold, gold skyrockets. China is screwed as bad as we are. IMHO, it serves the Chinese elite right for hogging all the wealth their hard-working citizens created rather than spreading the wealth around and developing some markets at home. It always makes me smile to think about how cheap labor is in the workers' socialist paradise.

Mercantilism (look at Japan these days) almost always leads to the same end result; your citizens work like slaves, and once you economically "defeat"your customer-enemies, you end up with depleted natural resources and mountains of worthless currency.

My dearest friend Cheng,

I can understand how you are red with anger at your piles of likely worthless assets. Too bad for you it's too late to unload them. I say to you, in the words of Jim Carroll, "It's too late to fall in love with Sharon Tate".

That's my story and I'm sticking to it.