He put us in CZECH

The Czech Republic's Prime Minister had some choice words for the U.S. economic stimulus package today. PM Mirek Topolanek stood before the European Parliament and said the Obama Administration's fiscal package and financial bailout "will undermine the stability of the global financial market" and ultimately is "the way to hell."

Whoa.

You may be asking yourself, just who is Mirek Topolanek? Outside of his role as the PM, he is the current head of state for the European Union (don't get excited, they get a new one every six months) and an opinionated Czech who likes to put others in check. I can't blame him for being suspicious of our government- (taxpayer) sponsored bailout, seeing as how the Czech Republic is a relatively stable economy in an unstable time, has a plethora of homegrown financial wizardry (a good thing?) and abhors its Communist past. Given these facts we can understand Topolanek's anti-interventionist soapbox rant.

BUT, what the world needs now is solutions, not more finger-pointing. We're all in this one together, PM.

The Chinese hate our economic policy too, but primarily because they can't control the value of the dollar. You see, when the U.S. economy collapsed last year, the Chinese - and most of the rest of the world - were holding "emergency money" in the form of, you guessed it!, U.S. dollars. It is common for countries to hold "emergency money" or reserves just in case of...say, and economic collapse. So when the dollar is bad, it's bad for everyone and in this case, the U.S.- Chinese economic yin yang was damaged.



As a result, of this financial dependence on the U.S., China has proposed a global currency to replace the dollar as the currency of "last resort". In this sense, countries who hold reserves won't have a heart attack every time the dollar takes a dip and can have more control over their own monetary policy.

Not a bad idea considering what we've witnessed over the last year in the U.S. Delasol thinks it wonderful that countries are eager to put their own financial houses in order and make smart decisions for themselves. But confidence is the integral ingredient here. Without a strong central government feeding morale to its citizens and reassurance that the darkest days are (hopefully) behind us, people would hoard cash, gold and ammunition in their homes. Trust me, this is not ideal. As expected, President Obama wasn't having it, flatly saying "I don't believe there is a need for a global currency." But if China doesn't want to fund our stimulus package anymore, can we blame them?

Delasol would love to hear your comments on the Obama Administration's economic stimulus package.

Cheers!