U.S. Trades More Indebtedness to China for Higher Financial Industry Profits

Dean Baker submits:

Geithner Agrees to Increase U.S. Indebtedness to China In Exchange for Higher Profits for the Financial Industry

This is what The Washington Post reported in an article on a set of agreements negotiated by Treasury Secretary Timothy Geithner and the Chinese government, although it did not explain this point to readers. The article told readers that:

"The agreement included action on some long-standing issues ? including initial moves by China toward opening its financial sector by allowing U.S. and other foreign firms to sell auto insurance, sell mutual funds and other investments, and underwrite corporate bonds."

The United States has also been pushing for China to raise the value of its currency against the yuan. The over-valuation of the dollar against the yuan is the reason that the United States borrows money from China.

The high value of the dollar makes imports cheap, causing people in the United States to

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