Nobel laureate Myerson: China's holdings of US Treasuries should not be increased

Roger Myerson, a renowned professor at the University of Chicago, who won the 2007 Nobel Prize in Economics, said that China, as one of the largest creditors of the United States, should try to keep its debt ratios as stable as possible, and that the current level of US Treasuries should be Roger Meiersen enough to continue to grow. Should pressure us to levy excise tax Myerson is 18th at the Shanghai National Accounting Institute to attend the sixth session of Snai-asu entrepreneur High-level Forum to do this. He says the United States is now a net debtor of the dollar, while China is a creditor country.　　It is a good principle for China to make debt more stable than to keep it steady. "I think that China has enough of the U.S. government debt, do not increase, the current level I feel similar." "Myerson said. In a report released last week by the US Treasury, China's holdings of U.S. debt, up to the end of May, amounted to more than $800 billion trillion, to $801.5 billion trillion, continuing to be the largest overseas holder of US Treasuries.　　China increased its holdings of US $38 billion trillion in May, the highest increase in the single month since the onset of the financial crisis. Myerson analysis said that in the 70 's the United States suffered "stagflation", that is, inflation and unemployment at the same time high. He said the Americans had painful memories and did not want stagflation to reappear. "So Americans are not deliberately creating inflation and devaluing the dollar, which is bad for us," he said.　　Instead, Myerson that the US is more worried about avoiding deflation, and that some of the policies that are being introduced to avoid deflation may in the future cause some sort of inflation. As far as dollar debt is concerned, Myerson says the dollar is printed by Americans, so it is important to trust the US.　　If, in the next two or three years, the United States is facing inflation in response to the crisis, the Chinese government and the private sector may be able to exert some influence on US policymakers and ask the US to devise some countermeasures, he suggested. "is to show that China is willing to continue to hold government bonds, but there are some costs, such as persuading the US Congress to pass some tax increases."　　"Myerson said. Myerson says China has a wealth of money flowing into the U.S. that Americans can use to buy goods and services. But because of America's massive debt issuance, Americans need only IOU to consume without scruple. "This is what has been happening. Maybe some American politicians and others take it for granted that Americans can continue to spend money without tax increases, which can work, but it is not. "I think China should convince Americans that this is not a free way," Myerson said. This way I feel conducive to the long-term development of Sino-US relations. "Myerson is not very optimistic about the economic situation in the US economy," he said. He says many people are worried about whether the US will plunge into a very protracted recession, as it did in the 90 's, when Japan suffered a "lost decade".　　He believes there may be similar risks in the United States. Myerson says the US will not fall into a prolonged recession, largely depending onThe effect of financial reform after the crisis. "I've actually been emphasizing regulation to manage the financial system well to help the US out of recession," he said. "He believes that if there is only fiscal stimulus and no change in bank regulation, he feels the US may also be in a prolonged recession."　　The crisis has cast doubt on the financial system that the United States relies heavily on, and if the US financial system remains so in the aftermath of the crisis, the economic recovery may be hard to start. "If we have regulatory reforms that will give people confidence in the banks and financial institutions of the United States once again, I think it might make the US a faster and stronger economic recovery." Otherwise, it is not impossible to get into a prolonged recession. "Myerson said. The problem now, he says, is not a decline in aggregate demand, but a major problem for banks as intermediaries of economic activity.　　Therefore, the United States must first solve the problem of the banking system, rather than the government's replacement of aggregate demand.　　For China, Myerson that China's economy has performed well in the second quarter, a good news that China has not been affected by the slump in external demand caused by the recession in developed economies. Myerson said that China's economic downturn began last winter, reflecting the decline in external demand, mainly from western countries such as Europe and the United States. He said that China's problems are more fiscal problems, is the decline in aggregate demand, the government through fiscal stimulus to close the gap is very reasonable.　　China is the opposite of the United States in this regard. Myerson said that the rapid recovery of China's economy is no better news for the United States, because it means that the Chinese demand for U.S. products to rebound, "this is the best fiscal stimulus for our economy."