The Obamas’ date nights are going to get a lot more expensive for us as Treasury spreads continue to rise.  The world is waking up to an America pushed to the brink of insolvency by Barack Obama and the Democratic Party:

I also believe that we are seeing a reversal of the flight to quality. Investors had piled into risk averse government bonds and they are now fleeing them for equities and investment grade corporate bonds. The change of heart could not come at a worse time as it collides with the massive financing  needs of the US Government.

So at the very moment  when supply is cresting, demand is slumping, and slumping badly.

The Chinese certainly have it figured out:

Referring to the Federal Reserve “as the world’s biggest junk investor,” and to Chairman Bernanke as “helicopter Ben,” Yu said the Fed has dropped “tons of money from the sky since the subprime crisis.”

“The balance sheet of the Federal Reserve not only has expanded like mad but is also ridden with ‘rubbish’ assets,” he said.

Talk about pulling no punches, but he also had some choice words for Secretary Tim 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.”

But Tim’s excellent adventure to China gets even better:

“Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

Every rational person knows the Obama plan to run permanent trillion dollar deficits won’t work.  When is the administration going to wake up to his reality?  When are we going to wake up and throw these bums out?

Archived in: China, dollar, Economy, President Barack Obama, Tim Geithner, treasuries