NOTE: This is part of a continuing online novel. Here is the Table of Contents.

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For the 8 AM edition of its Squawk Box CNBC had gotten what its producers, at that moment, considered the ultimate “get.”

“Jen Renquin is our guest in the studio, direct by satellite from Beijing, China,” host Mark Haines said cheerfully on the morning of December 13. Haines spoke before a large semicircular table that had been mounted on the set just a week before, to accommodate larger panels for their “America’s Economic Crisis Team” coverage.

“With me are CNBC hosts Jim Cramer and Larry Kudlow, our own Bill Kernan and David Faber, and Motley Fool co-founder Tom Gardner”. The last was dressed in his trademark style, with a business suit and a court jester’s hat.

A wide screen had been set up behind the center of the table, so it would appear the remote guest was sitting-in with the panel. Uncharacteristically, Haines opened the segment standing, holding a script, as Louis Rukeyser had once done before his rectangular boardroom table. Now he sat down opposite the screen, a camera panned on him briefly, and he introduced China’s Finance Minister, after explaining there would be delays between questions-and-answers owing to the need for a translator.

“Mr. Finance Minister, welcome to the program,” Haines said. After a slight delay Jen Renquin nodded.

“Let’s get right to it. Since the dollar began floating against the Renminbi, or Chinese Yuan, a few weeks ago, its value has fallen in half. This has cut the price of American exports to China, but doubled the price of imports. How long do you expect the dollar to trade at these levels?”

Jen inclined his head toward his own interpreter, then spoke for 30 seconds, and the sounds of Mandarin Chinese filled the studio. Finally his answer came. “The Bank of China has been intervening in the market these last few trading days to hold the dollar where it is. Other Asian banks have been selling dollars, buying Renminbi, balancing their own assets. We have been making these trades with them. We now have more dollars than ever before. So we are suffering, too. We continue to have losses in our currency accounts.”

Haines started to follow up, but Jen was speaking again, and Haines thought he heard his own name, so he waited. The translation finally came. “We cannot continue to take these losses, Mr. Haines. China will, in time, have to sell some of these dollars to maintain its own reserves. Tomorrow we will announce a small cut in our interest rates, risking an over-heating of our economy in order to cut the value of Renminbi somewhat. But if we should have inflation as a result, our dollar sales must then accelerate.”

“Larry Kudlow here, Mr. Finance Minister.” Kudlow, an informal advisor to President Bush and a public official under the President’s father, was plainly nervous. He had been a staunch anti-communist and now felt he had to step forward as the “hard man.” “Relations between our governments seem to be at a low ebb, mainly over the issue of Taiwan. Certainly greater cooperation to get past this crisis will go a long way to defusing the Taiwan crisis.”

As Kudlow spoke the word “Taiwan,” Jen frowned. He frowned again at his interpreter, then spoke to her. After a minute, the interpreter spoke in English. “That is a good point, Mr. Kudlow. China very much wants to end this crisis over our province of Formosa,” her voice rising a bit at the end of the sentence. “Our ambassador met today with local officials, and Chen Shui-bian has agreed to meet with us, in Shanghai, tomorrow morning. We have an opportunity to end this whole business peacefully.

“China wants peace. We suffered wars throughout most of the 20th century, on our soil. Tens of millions died. We want to prevent war where we can. That is good for business.” Jen had smiled at the end of his little speech, and on hearing the end in English he smiled again for the camera.

Tom Gardner now spoke, and it was apparent that there was a monitor in Beijing picking up each panel member so Jen could address them. As if seeing Gardner for the first time Jen found himself forced to titter. It was probably the first official Chinese government titter ever seen on American TV. “Like the hat? I will be glad to have one sent to you,” Gardner began, as Jen nodded and tried to stop himself from an outright guffaw.

Gardner reddened slightly, then tried to begin again, reading from a paper in front of him. “Minister Jen Renquin, our site MotleyFool.com helps ordinary investors understand and profit from markets changes. What do you think they should be doing, having lost so much money by your government’s actions in the last few weeks?”

The question, once Jen heard it through his earpiece, stopped his laughing cold. It was a good, sound, serious question. It was not what he expected from that hat. He took a few moments to consider his answer, and a minute later the translator came back.

“I hesitate to offer anyone investment advice,” he said. “The saying is that when the elephants fight the mice get stepped on. Stability and certainty are the best platforms for investment by anyone. The government of China has learned this, and we are working to restore stability as rapidly as possible, both for American investors and Chinese investors. Once stability is restored to our relations I will only repeat what your Paul Volcker once said about markets when asked what might happen. Prices will fluctuate.”

On the whole Jen’s words soothed the market, which rose slightly, although as Gardner himself had noted many times, even a dead cat will bounce it if you drop it from enough height. But it wasn’t the stock market that George W. Bush had to worry about…