Check out Snow’s comments to the Senate Banking Committee:

“I don’t think it’s in our interests or in their interests to go to a full float. I see them on a path to a float.” Hmmm Is that a blink?

Snow said the judgment on whether China was a currency manipulator would depend on how its large current account surplus with the United States developed — as well as its large and growing surplus with the world, continued capital inflows and the buildup of its foreign currency reserves.

So far, he is refusing to say how much he wants Chinese officials to revalue the renmimbi. Others in the administration are privately demanding an immediate increase of 10 to 15 percent. “I am frankly astounded the administration continues to report the Chinese peg is not currency manipulation,” said Senator Elizabeth Dole, Republican of North Carolina. “I think we’re going to see action by China,” Snow told members of the Senate committee but added that he “might have to eat those words” in six months.

Would someone please wake up Treasury Snow from his sleep? China has a trade surplus with the US but it is not that huge with the rest of the world. In fact, China has big trade deficits with its Asian trading partners including Japan, Taiwan and South Korea. More to the point, is Snow really bitching about China holding US$ reserves? Why the focus on China anyway? What about the US$ reserves in Japan and South Korea? Perhaps this is the correct question: Is Snow on Mars or is he on drugs?

So far China is doing the right thing: nothing.

Six months from now will we see crow eating accompanied by trade wars or just plain crow eating? Perhaps we get a token 3% move allowing the US to save face. If so China will be showing a lot more class than we have.

Here is the real (but unreported) story behind all these “snowjobs” and congressional threats: The situation in the US is nowhere near as good as it seems or we would not be doing all this bitching. Think about how much worse it will get when housing finally collapses.

Mike Shedlock / Mish/