The Obama Administration sent Geithner, Summers, Orszag and Bernanke to the Chinese talks in Washington to explain the current economic plan. The Chinese get better treatment than Congress, but then the Chinese are paying the bills. Of course, having everyone there makes sense, the creditor wants to talk with the team of the debtor.
"We sincerely hope the U.S. fiscal deficit will be reduced, year after year," Assistant Finance Minister Zhu Guangyao told reporters after the Monday talks had ended.
"The Chinese government is a responsible government and first and foremost our responsibility is the Chinese people, so of course we are concerned about the security of the Chinese assets," Zhu said, speaking through an interpreter.
Will this make a difference? The problem is the intangible. The confidence in bonds and a currency once the economic numbers are bad is determined by the belief that the debtor will change. The debtor has to swear that change will occur while convincing their voting public that there will be no costs or changes in service and benefits. Something will have to change but not today.
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