Tuesday, June 2, 2009

Tim Geithner's Big Day

With the dollar on the ropes and bond prices falling, Tim Geithner meets face to face on Tuesday with the people that have more influence over the dollar and U.S. bond markets then he does.

Late in the afternoon,Tuesday, Secretary Geithner will meet with Premier Wen Jiabao at the Zhongnanhai Leadership Compound to exchange views of the current economic and financial market conditions in the United States and China and discuss the continuing steps both countries are taking toward economic stimulus and recovery.

Following that meeting, Secretary Geithner will meet with President Hu Jintao in the Fujian Room of the Great Hall of the People to discuss the U.S.-China economic relationship, and lay the groundwork for a substantive, successful first Strategic and Economic Dialogue meeting to take place later this summer.

Geithner will be so outmatched, it will be as though he has chosen to put the fate of the United States economy on the outcome of a one on one basketball game, him versus Yao Ming.

I expect nothing from these meetings that will halt the decline of the dollar or result in renewed Chinese enthusiasm for U.S. Treasury securities.

If anything, the odds are more in favor of Geithner slipping up in some way that results in his unintentionally insulting one of the leaders he is meeting with, or saying something that spooks the Chinese leaders to an even greater degree about the dollar or Treasury securities.

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