The Chicagoist will be launching later but in the meantime please enjoy our archives.

Why Does Mark Kirk Hate America?

By Kevin Robinson in News on Jun 10, 2009 3:20PM

After a trip to China to meet with senior Chinese government officials, Illinois 10th District Congressman Mark Kirk took time to discuss his meeting at the Center for Strategic and International Studies, a Washington, DC think-tank. "We heard across the board - in private - substantial, continuing and rising concern," Kirk said. "It's clear that China would like to diversify from its dollar investments." His trip included discussions with Chinese Central Bank cheif central bank chief Dr Zhou Xiaochuan. That statement differed from what Treasury Secretary Timothy Geithner said after meeting with Chinese officials on a separate visit. Geithner indicated that Chinese leaders expressed "justifiable confidence" in the U.S. economy. with some 700 billion dollars invested in Treasury bonds, China is the largest holder of U.S. debt. Earlier this year Dr Zhou proposed eliminating the U.S. dollar as the global financial benchmark.

Kirk said that Chinese leaders were privately critical of U.S. fiscal policy, including 'quantitative easing'. In practice, this is where a central bank purchases financial assets, such as treasuries and corporate bonds, from financial institutions using money it has created by increasing the credit in its own bank account. This action is supposed to lead to the creation of the overall money supply through deposit multiplication, drawing investments in, encouraging lending by the institutions and cutting the costs of borrowing money in the marketplace. The risk is that banks will not increase lending, leading to hyperinflation. Kirk says he told Chinese officials not to trust budget numbers proposed by the Obama administration. "One of the messages I had -- because we need to build trust and confidence in our number one creditor," said Kirk, "is that the budget numbers that the US government had put forward should not be believed. The Congress is actually gonna spend quite a bit more than what's in the budget, and the health-care bill probably being the lead driver of additional spending by the Congress." [Via TPM]