Barack Obama plumbs new depths of optimism as China rains on his parade

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http://blogs.telegraph.co.uk/gerald_warner/blog/2009/03/16/barack_obama_plumbs_new_depths_of_optimism_as_china_rains_on_his_parade

Barack Obama plumbs new depths of optimism as China rains on his parade
Posted By: Gerald Warner at Mar 16, 2009 at 08:57:05 [General] Posted in: Society , Eagle Eye

Tags:

Barack Obama, Hillary Clinton, US economy, Wen Jiabao




Calm down, dear, it's only a depression. Barack Obama and his team have changed tactics, in response to the popularity rating of The One falling below the level enjoyed by George W Bush at the same stage in his presidency. That may be all right for flesh-and-blood presidents, but it should not happen to a messiah.
So, from fear that the grim commentary on the US recession in which Obama has hitherto indulged, with a view to discrediting the Bush heritage, is back-firing because the public now regards him as fully in charge and therefore responsible, the new style is upbeat. Seizing upon a few flimsy straws in the wind that might support cautious optimism - the chief executives of Citigroup, Bank of America and J P Morgan all reporting modest profitability recently - the White House began talking up the green shoots of recovery.
Unfortunately this coincided with Obama reverting to human rights issues in China, after Hillary Clinton had attracted heavy criticism by side-stepping such questions during her recent visit to Beijing. So Barack reckoned it might go down well with his Yeti-hugging constituency to smack down Beijing for its treatment of Tibet. He forgot the kind of people he was dealing with. Within 24 hours Chinese premier Wen Jiabao took a fierce revenge by talking down the reliability of US Treasury bonds.
"To be honest, I'm a little bit worried," Wen confided at a news conference. "I request the US to honour its promises and to guarantee the safety of China's assets. We have lent a huge amount of money to the United States." Ouch! That hurt. It was a sharp reminder, from a regime that knows all about control and reprisals, that a government that holds $727.4 billion of US Treasury Bonds does not have to take any moralising sermons from Obama.
The merest anticipation in the markets that China was contemplating any level of divestiture of US Treasuries could send American interest rates soaring. China's trade surplus is already a key factor in keeping US rates down. With this kind of leverage, while America is trying to grope its way out of recession, China wields immense power. Wen commands foreign exchange reserves of just under $2 trillion and he who pays the piper calls the tune.
When Wen says "Jump", Obama's team asks "How high?" The Chinese premier's comment provoked panic in the White House. "There's no safer investment in the world than in the United States," insisted Obama's spokesman Robert Gibbs. It may be some time before Obama returns to the two forbidden topics of Tibet and the overvalued yuan. For the moment, he will restrict himself to telling an unimpressed electorate that happy days are here again. In reality, America's economic strength is so depleted that Red China can cut the US President down to size.

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