When asked about the safety of China's American assets Geithner said that they were very safe. This was not meant as a joke but garnered loud laughter from his audience.
"China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China's total U.S. dollar-denominated investments could be twice as high.
"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home."
Here is more to show just how nervous the Chinese are that we are destroying the value of their investment in us. Keep in mind that means we are destroying our own investment in ourselves as well (one such example being the potential/likely spike in inflation that will devalue everyone's liquid savings).
"Geithner, 47, needs to show how the U.S. can prevent the value of China’s investment from being eroded by a weaker dollar or by the inflation that might be stoked by the stimulus money being pumped into the U.S. economy, according to Yu.
“It will be helpful if Geithner can show us some arithmetic,” he said."