MacroScope

Barney Frank plays poker with China

March 17, 2009

U.S. Representative Barney Frank is rarely shy about expressing his opinions. Just yesterday he said it may be time to fire some people at AIG. Now he’s accusing China of bluffing after Premier Wen Jiabao expressed “some worries” about the value of U.S. bond holdings.

Here’s what Frank, the chairman of the House Financial Services Committee, had to say:

“We do want foreign capital to come in here and we want private capital. We just had the Chinese raising the specter of not buying our Treasuries. Well, that would be troubling. I think they’re bluffing, personally.”

So is China holding pocket aces? Leave your comments below.

(Reuters photo of Wen Jiabao by Jason Lee)

Comments
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Frank’s comments remind me of the kind of comments I heard back in the 1990′s regarding foreign capital inflows to emerging economies. Countries like Brazil, Thailand, Korea and Chile were very nervous about fickle foreign capital actually hurting financial stability and would rather not have it even if that meant increasing the cost of capital.

 

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