Richard W. Fisher, the current president of the Dallas Federal Reserve Bank, is well known for his eloquent speeches.

Two recent speeches are, as usual, quite instructive (the first is also rather long).

The first one listed below took place at the University of Beijing, China in April 2009. The second was held on May 15th, in San Antonio, to the Texas Bankers Association.

Analysis of his remarks is very interesting, especially in view of Mr. Fisher´s recent comments to the Wall Street Journal: “Senior officials of the Chinese government grilled me about whether or not we are going to monetize the actions of our legislature…I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States.”

What do the Chinese fear?

The Chinese are afraid, and rightfully so, that their huge surpluses will be worth less with a devalued Dollar. As the Dollar goes, so goes their surplus.

If I were the Chinese, I would put their current efforts to convert U.S. Dollars into hard assets into high gear.

Speech in Beijing, China

Speech in Texas, USA

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