Worried About U.S. Dollar?

" Let's -- Mark -- just returned from China and he says the Chinese told them they are worried about the US economy. But that's not exactly what I Treasury Secretary Tim Geithner says after his recent trip to China secretary Geithner says the Chinese expressed to him. Justifiable. Confidence. In our economy so which is it. By the Chinese flipped out about -- and exploding debt. Or not. Illinois congressman mark Kirk joins us live in Washington I see attachment you think that OK -- one thing about our economy and that apparently the Treasury Secretary is told another."

" There was an honesty moment when secretary Geithner was in Peking university giving a speech he said. Your investments and a trillion dollars for the US that are secure and the audience laughed and that's very Han Chinese to do to embarrassing speaker and public but I think it reflected a growing concern in Beijing."

" And I listen to put -- the reason why they're concerned the Chinese what they care so much is because. They hold what all of this significant portion of our death."

" Right China has -- about 300 billion to the US for Fannie Mae and Freddie Mac they're very worried about that. Another 700 billion dollars in treasury bills. And they're particularly worried about the Fed's new policy. Buying treasury debt because they're worried that one part of the federal government is buying another part of the federal government's debt. Sounds like printing money and that means that if you hold dollar denominated debt. All those investments will be worth less because you'll be -- paid in printed dollars."

" What would be the incentive for a second Geithner didn't get it so -- her to miss that serve on us to point B what. What a question for him to come back here and say the Chinese are fine on our -- they a lot of my you know they don't they're not worried at all about our economy."

" What secretary Geithner reflected was what -- public statements of the Chinese Government was which is. They are afraid that if they talked on the dollar too much their own trillion dollar investments there will be -- But privately the key concern is. Should we buy any more US debt and over time what's happening is China is beginning to cancel congress -- credit card. Doesn't want to lend much more money to the United States and especially is worried about the Fed's policy of printing money to buy new debt."

" So business they secretary is deceitful or sugar coating it said he's not eve and was hoodwinked and wasn't there when they were talking candidly -- that's a story it's a."

" Common thing in Asia that you hear one thing in public and then you may hear some more got direct concerns in private and you have to listen to that because unfortunately China has become. America's largest creditor. And if that congress -- plans go forward we will borrow even more. Not to spend on additional pills -- transportation bill health care bill and our regular practice of waiting our budget constraints towards the end of the year."

" If any couldn secretary aside and said don't look you know when you out of the room that could tell me they're really worried enough about Baghdad but are situation I'm fairly sure that he heard the same thing in private. And so why he -- so why would email let me say something Nelson justifiable confidence to watch why would you tell us something different -- because both parties don't want to create a panic."

" But there is growing concern that the United States may not -- one point eight trillion. It may borrow even more especially if it passes additional legislation on the speaker's table. And that begins to look unsustainable also what were."

" They learned that point -- if it if our credit so lousy in this is getting so Graham why in the world with the Chinese my pick up any more of our -- I wouldn't -- if they -- lend someone money and want to say you know show -- when -- when --"

" Are we are beginning to hedge I think they expect quite a bit of inflation in the United States next year so they made a major investment. They funded a second strategic petroleum rusher. And they plan to buy eighty billion dollars for the gold that's to fort Knox is both of those investments only makes sense if you expect significant dollar inflation."

" And Andy and they may estimate expect that sell out. In terms of and because it change policy whether or not the US believes that they eat you know your version of what you told the private sector with secretary of state."

" Well this is a growing concern over the that credit worthiness and and and value up previous US bonds which have been sold and we've seen other sovereign borrowers. Germany in the United Kingdom fail in debt auctions they they were unable to borrow money at the rates they wish. Also Fitch and Standard and Poor's have now issued a warning to the British government you borrowed too much and we're going to restrict your AAA credit rating. From you if you continue this path. That's the same path we -- on the President Obama is right when he says we're out of money."

" Well I think when it starts and why they had out of money to begin within minutes and the man that's a huge surprise to anybody it's a very good thank you can."