James Pethokoukis of Reuters is at it again, subversion-via-blog.

So in the little sit down with the President, the Chinese made clear they did not believe a word of the President’s promises about ObamaCare not adding to the deficit.

The Chinese asked uncomfortable questions about the cost of ObamaCare:

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Turns out that when you lie to everyone, no one believes you. Untrue claims that President Obama makes in the speeches to Joint Sessions of Congress about not adding to the deficit, making mystery cuts to Medicare, or not funding abortion, or not allowing illegal immigrants to gain access to his health care benefit, are actually listened to by other nations.

And the economic implications and the national security implications of a President who no one believes are profound, and none of them are good.

Sounds like the Chinese do not believe that a Democratic Congress and President Obama will do anything about the growing deficit. The only thing the Trillion-dollar President can do is spend more Trillions — first on the stimulus, then another trillion plus on health care. And because the world refuses to buy more of our debt, the Fed has printed (you guessed it) a trillion dollars in the last year to give to banks, with instructions to buy our T-Bills in our debt (rigged) “auctions.” This is how we are paying for our deficit, we are printing money. And our Trillion dollar President keeps spending.

The rational reaction of the Chinese (as opposed to the irrational action of spending a trillion dollars on health care) reminds me of a sign I saw at the 9/12 demonstration:

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While the cognoscenti of the Western financial world is attempting to spin the recent fall in the dollar as a stylish financial mystery play with a journalist based in the Middle East as its star, the Whodunit spin is a red herring: the facts are that the dollar is weak, and getting weaker.

The world is awash in dollars. There is a massive oversupply. We are electronically creating (printing in another era) hundreds of billions of dollars to buy our own T-Bills. Our deficit and spending has soared.

Kudlow, in his column, “Save the Greenback, Mr. President” explains that solution is to remove the excess dollars from the market and to stop “printing so much debt:”

for therapy, the Fed should begin moving excess cash from the economy….And they need to stop printing so much debt from Congress. All this massive spending and borrowing is killing us.

Instead, the Democrats in Congress and the White House are planning more spending: a second spending bill is on the table — ironically tagged as the second stimulus bill, which ought to stimulate the dollar tanking — and of course, President Obama’s $1 trillion health care spending boondoggle.

When town hall meetings are interrupted with shouts of “stop printing money” the jig is up. Note to the White House: in the age of the internet, you cannot hide printing $600 Billion a year from the world.

Until the Federal Reserve stops printing money to buy our own T-Bills, and the Democrats in Congress stop spending on new programs and we lower our deficit the dollar will continue to drop. End of story, no other outcome is possible.

Simply put, the Dems are killing the dollar.

My friend Jason Pye has video of Ben Bernanke up explaining why the Federal Reserve should not be audited.

Bernanke’s comments are filled with red herrings. The legislation would not, despite his claims, allow Congress to take over the Fed or cause it to lose independence.

I was not sure I supported the legislation until I heard Bernanke and others say they should not be audited. It always makes me suspicious when bureaucrats think they are above oversight.

To be sure, there are risks along the way. I suspect we will all be troubled by the findings of a Fed audit. Some members of Congress will want to take over the Fed. It’d be disastrous for Congress to start setting interest rates, etc.

But that does not mean the Fed is beyond scrutiny. Congress should find an outside, competent auditor who can do the job.

Lastly, how dare the Fed suggest this legislation would mean it is surrendering its independence. We know from the bailouts that the Fed has served as an extension of the Treasury Department since mid-2008 and remains a useful pawn of the Treasury Department.

The Federal Reserve itself gave up its own independence and we should not make sure it is not surrendering the nation’s through fiscal recklessness.