MarketWatch has a great article which quotes a statement from the People’s Bank of China’s website saying that the U.S. financial system is a “gentleman’s club.” Clearly, the U.S. is going to be made the scapegoat at next week’s G20 meeting in London. Here’s an excerpt from my take on the upcoming G20 meeting:
“There’s now a large perception gap between the United States and Europe. The Europeans see us as teenagers at the mall who have Dad’s credit card and are on a big spending spree. Quite frankly, they’re shocked by our fiscal irresponsibility.
“Britain, for example, nationalized its troubled banks and the pound plunged to a 23-year low. Uncle Sam has already stepped up its borrowing plans. The U.S. government’s budget deficit is officially estimated at 12.3% GDP. The Europeans, in contrast, don’t want their deficits to exceed 3% of GDP. Foreign investors are clearly getting skittish. In January, the U.S. experienced a record outflow of capital.”
The recent market rally has taken some of the heat off Geithner but he won’t be very popular at next week’s meeting.
Update: Here’s the whole statement off the People’s Bank of China’s website.