Lies,damned lies,statistics and Hope and Change

In the last few days the yield on US government debt has risen dramatically. Lenders are reluctant. Today the decline in the value of the dollar accelerates as gold, oil and Sterling surge up. The US has 4-8-12 more years of Harvard Law School economics to endure, whereas the UK government will be replaced within a year by the Conservatives. So while the credit agencies put the UK on credit watch with negative implications but re-affirm the US as triple-A, the markets realize that in the UK there's hope for change whereas in the US there's Hope and Change. Some difference.

I've queried America's credit worthiness for a while, eg "A trillion here, a trillion there..." , but I'm not as polite as the Chinese:

Another global financial crisis triggered by a loss of confidence in the dollar may be inevitable unless the U.S. saves more, said Yu Yongding, a former Chinese central bank adviser.

It’s “very natural” for the world to be concerned about the U.S. government’s spending and planned record fiscal deficit, Yu said in e-mailed comments yesterday relating to a visit to Beijing by U.S. Treasury Secretary Timothy Geithner.

The Obama administration aims to reduce the fiscal deficit to “roughly” 3 percent of gross domestic product from a projected 12.9 percent this year, Geithner reaffirmed today. The treasury secretary added that China’s investments in U.S. financial assets are very safe, and that the Obama administration is committed to a strong dollar.

It may be helpful if “Geithner can show us some arithmetic,” said Yu. “We need to know how the U.S. government can achieve this objective.”

The deficit is projected to reach $1.75 trillion in the year ending Sept. 30 from last year’s $455 billion shortfall, according to the Congressional Budget Office.

By happy chance today GM files for bankruptcy, but will be kept afloat with money borrowed from China to be repaid by our children to the advantage of the UAW and the disadvantage of Americans who work for Ford, Honda, Toyota.