Posted on 02/17/2011 12:27:52 PM PST by FromLori
Confidential diplomatic cables from the U.S. embassies in Beijing and Hong Kong lay bare China's growing influence as America's largest creditor.
As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms -- from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck.
The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.
In June, 2009, the head of China's powerful sovereign wealth fund met with Geithner and requested that he lean on regulators at the U.S. Federal Reserve to speed up the approval of its $1.2 billion investment in Morgan Stanley, according to the cables, which were provided to Reuters by a third party.
Although the cables do not mention if Geithner took any action, China's deal to buy Morgan Stanley shares was announced the very next day.
The two Treasury officials to whom the cables were addressed, Deputy Assistant Secretary for Asia Robert Dohner and Deputy Assistant Secretary for International Monetary and Financial Policy Mark Sobel, declined through a spokesperson to comment for this story. The State Department also declined to comment.
(Excerpt) Read more at reuters.com ...
Another good part...
“At the time of Geithner’s visit, Morgan Stanley was planning a new share issue to raise funds to repay the government for the money it received during the financial crisis.
“Lou asked if it would be possible for the Fed to expedite approval of CIC’s request that this investment be exempted from restrictions on investment by bank holding companies, as the customary two-week process for considering such exemption requests is too long to allow CIC to take advantage of this opportunity,” according to the cable.
There’s no record in the cable of how Geithner responded, but it was only a day later, on June 3, that CIC announced plans to purchase $1.2 billion in Morgan Stanley shares.
A spokesperson for the Fed said in the instance of the June 3 CIC investment, no application for an exemption was made to the Federal Reserve Board.”
It sure looks as though pretty soon, we are all going to be required to bow toward Beijing three times a day.
I thought his knees were dirty when he returned from China last time.
These so-called officials (D/R)that we elected to represent the interests of the USA and Americans have for over 30 years represented international global interests from Wall St to the boardrooms of former US corporations (now international).
They created the China monster that grew in power as the USA declined. They should all be facing crimes of treason as they betrayed our country in issues of trade and open borders.
There was a time in the past when a US government policy that was friendly and beneficial to US corporations was inevitably friendly to America. That can not be accepted as gospel anymore. These corporations are now opportunistic international political entities that will use (and abuse) the USA to advance their profits and influence, just as will any nation. They need to be treated as allies but not as citizens.
The multi-national corporations have no allegiance to any sovereign nation and in fact they prefer neither sovereignty nor borders. We the people need to become very wary of policies that put international corporate interests ahead of the US citizens.
The greatest act of folly was to fall into debt to a disgusting totalitarian state. Our children will rue this madness.
The Chinese don’t want US Treasuries or the Dollar to go down the tubes, either. It would cost them a huge portion of their accumulated wealth.
No! They get their leaks from lots of sources (thus the "Wiki" part of their name). The people who started Wikileaks were focussed mostly on totalitarian regimes. When Julian Assange gained control he changed the focus to the US and other freer countries.
So then they’ve got leakers in high places at the Pentagon, Treasury and State Departments? I mean if what you’re saying is true, then they’re running the most productive espionage ring since John Walker.
What this means is that we are paying the Communist Chinese for their bad US investments....even though we have redistributed our wealth thru bad Free Trade deals with Communist China....
More reason that Free Traders, and supporters of Free Trade with Communist China, need to be brought up on Treason charges.
We still have the one effective weapon that will neutralize the Communist Chinese: A huge tariff on Communist Chinese products...at least 25% to 50%
We can either tariff the Communist Chinese....or continue the same stupid Free Trade nonsense pushed by the Free Trader Communists
I think I speak for most FReepers when I say that we need the federal government to kill all foreigners with this information before it gets out. This information makes our government look really bad. If there’s one thing that FReepers and conservatives stand for, it is upholding the innocence and honor of our political ruling class!
This is information that we, the people, should have remained ignorant of forever! There are things that our government does that we just shouldn’t know about. Seeing how our government is dissed by creditors is just too much for our fragile sensibilities.
Kill the foreigners!
The Chinese just want the USA people to be beholden to them and to business interests that are also beholden to them, and that is the exact situation that our self serving treasonous lobbyist bribed politicians have intentionally created for us Americans.
International trade is a complex issue, with each economy occupying a position in the production hierachy. China currently occupies a lower part on the hierachy, whilst the US occupies the high end. If the US were to cut off trade with China, It would be forced to expand into other parts, e.g. CPU making, software making, airplane making, advanced medicine or indigenous cars. It would then compete head on with the US on the international market. So far there is little competition in the high end manufacturing market because China can making a decent living selling cheap stuff. I’m not saying cutting off trade completely is not a good idea, but I’m suggesting the consequence is hard to predict. When the US first championed free trade in the ‘90s, it thought free trade would work in its favour, without realizing it was China who was best positioned to benefit from it.
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