« NO BAIL OUT!! LINKS to Legislators | Main | Bailout: Key Points On “Rescue” Plan From A Healthy Bank’s Perspective »

Other countries unlikely to buy U.S. bailout bonds China banker says

Submitted by cpowell on 06:37AM ET Sunday, September 28, 2008. Section: Daily Dispatches

Chinese Banker Predicts Weakened U.S. Dollar in Long Term

From Xinhua News Agency, Beijing

Sunday, September 28,2008

http://news.xinhuanet.com/ english/2008-09/28/content_ 10128470.htm

TIANJIN, China -- The U.S. dollar will face short-term fluctuations and weaken in the long run, a leading Chinese banker predicted here on Sunday.

Speaking at the Summer Davos forum in this north China port city, Bank of China Vice President Zhu Min said he believed it would be less likely for the United States to sell more treasury bonds to other countries to obtain the funds needed to bail out the turmoil-beleagued financial market, which would only accelerate inflation in other countries.

Instead, the U.S. could only issue other bonds to finance the rescue plan, which Zhu said would definitely cause the dollar depreciation in the long term. The bailout fund will have topped $1 trillion U.S. dollars if the U.S. Congress passes the Fed's $700 billion financial rescue plan.

Zhu said market confidence could not be recovered simply with the help of the $700 billion, saying the U.S. dollar is a currency with turbulent fluctuations.

"It takes a long time to solve the current liquidity strains and investment crisis," Zhu said.

Zhu also saw short-term fluctuations for the dollar since investment demand for the dollar is dropping and there could be "more bad news" in the coming few weeks.

Well-known Chinese economist Cheng Siwei told the forum that the pace of appreciation for the Chinese currency, the yuan, should be slower.

The United States and some European countries have been arguing that the yuan's value is too low, which gives Chinese exporters an "unfair advantage." The yuan has witnessed continuous appreciation in recent years, but this time more and more Chinese enterprises, including textile firms, are complaining about money losses and possible shutdown.

September 28, 2008 in Current Affairs | Permalink

TrackBack

TrackBack URL for this entry:

https://www.typepad.com/services/trackback/6a00d83451d3ac69e2010534db4584970c

Listed below are links to weblogs that reference Other countries unlikely to buy U.S. bailout bonds China banker says:

Comments

The comments to this entry are closed.