“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,” he said.
No pun intended, but….the money quote:
“The US spends tomorrow’s money today,” he said. “We Chinese spend today’s money tomorrow. That’s why we have this financial crisis.” Yet the consequences are not symmetric.
“He who goes borrowing, goes sorrowing,” said Mr Cheng.
It was a quote from US founding father Benjamin Franklin.
The Communist Chinese government quoting Benjamin Franklin…….does anyone else feel like they are living in the Twilight Zone?
Scott Dauenhauer CFP, MSFP, AIF