Dear Chairman Bernanke (The Chinese send their congratulations)

Wall Street Journal ^ | 9/9/2009 | The Editors

[SeekAndFind]

Dear Esteemed Chairman and Savior of the World Economy:

On behalf of your many Chinese friends and all of the Chinese people, we wish to congratulate you on your recent reappointment as Chairman of the American Federal Reserve. We could not be more pleased to know that the man who saved the value of our Fannie Mae mortgage-backed securities last year will be the Great Monetary Helmsman for another four years.

We also note with satisfaction, and admiration, your many recent assurances, via the Wall Street Journal and various eloquent speeches, that you and the Fed have no intention of permitting a revival of dollar inflation. This is a source of great reassurance to the Chinese people, not to mention the bureaucracy in Beijing that made the decision to invest $1 trillion or more in dollar-denominated securities.

As you can imagine, this has become a source of some political controversy inside the government of the People's Republic, as we have also noted it has become in the irresponsible American financial press. Fortunately, we don't have the latter problem. But please know that we share your disdain for any voices in the unpatriotic media who would question your resolve to maintain the value of the world's reserve currency.

At the same time, and with the deepest respect, we also note with concern your decision this year to purchase U.S. Treasurys, which directly monetizes the debt built up by irresponsible democratic politicians. (This is one reason we Chinese are so skeptical of democracy; it always leads to a welfare state!) We must admit that that Treasury decision caught us by surprise, considering the many lectures over the years from our American friends about the importance of an independent central bank.

[SeekAndFind]

For those who are interested, something is afoot... here are economic developments we should seriously consider :

* The Chinese are hedging their dollar bets and buying gold, oil and other commodities which will rise in value if the dollar falls.

* Oil has risen above $71 a barrel, despite slack global demand, and in particular that gold has climbed this week above $1,000 an ounce.

* The Chinese are doubling their reserves of gold and buying other related metals.

* The UN is considering a global currency to replace the USD, proposing the biggest overhaul of the world’s monetary system since the Second World War.

[Toddsterpatriot]

We could not be more pleased to know that the man who saved the value of our Fannie Mae mortgage-backed securities last year will be the Great Monetary Helmsman for another four years.

The Treasury took over Fannie and Freddie, not the Fed.

[Toddsterpatriot]

The Chinese are hedging their dollar bets and buying gold, oil and other commodities which will rise in value if the dollar falls.

Those markets aren't big enough for China to usefully hedge more than a small part of their dollar holdings without causing the prices to skyrocket.

[easttennesseejohn]

And as those prices skyrocket, it will have what type of impact on BO’s so-called recovery? Cost push inflation in those basic comodities for regrowth combined with increasing taxation on various levels( Income and Cap and Tax) further increasing costs for economic expansion and the job creation needed for tax revenues to try and keep the deficits at bay. Good luck on that. If inflationary pressures rise how can, given the dismal otherside of the equation can the FED raise rates and create any, any at all climate for growth?