Chinese buyers lead foreign investment in US housing market
“They” are finally coming home to roost! “They” being Dollars. China has bid a $4 billion deal for 80% of AIG’s plane leasing company over the weekend. China is also a major buyer of housing in the U.S., total foreign investment has reached $7 billion so far. While still not a huge amount, the snowball is rolling and can only get bigger and bigger. China is demonstrating its appetite for “stuff” over Dollar holdings. This is quite logical and actually surprising that it has taken this long and that they haven’t already done more deals and vacuumed up more property and assets.
They have, however, been scouring the planet over the last 3 or 4 years cutting deals “payable” in Dollars for raw materials. Quite simply, they are unloading Dollars by making future promises (in Dollars) to pay for real assets now. They are passing the “potato” along in the game of Dollar hot potato that I’ve spoken of before so often. The Chinese are a very smart people and understand the end game to Dollar hegemony, either they spend them now while they still “spend” or be stuck with them.
I do want to make mention that when this process really starts to roll, an absolute flood (in reverse of the flood we buried the world with exporting Dollars) will come back to our borders. It may even initially “look” like a good thing. Asset prices will start to “go up” and our fearless leaders will tell us “see, things are getting better, ‘it worked,’ it’s all better now!”. Umm, yes, all better… in Dollar terms and a deflationary collapse averted but it will be only the beginning of a hyperinflation. Literally trillions upon trillions of dollars will be at our borders knocking on the door and bidding on assets, real assets. They will be thinking, “Please take these worthless Dollars in trade for some real stuff.” Should the U.S. reply NO you ask? Well, then you will see an immediate game over dumping of any and all things “Dollar” because the issuer (the U.S.) would in fact be saying “we don’t want Dollars either.”
It really is a problem for U.S. bankster/policymakers. Do they accept something in payment for real assets that they know is fake, fraudulent and worthless or do they decline acceptance and push the nuclear button on a Dollar run? Think about it. What does it say if the issuer of a currency won’t accept that currency as payment? …And if Dollars are not allowed back in, can you imagine in today’s computerized nanosecond world of investing how fast the implosion will be in the market value of Dollars?
Please understand that the above description/hypothesis is just another way of looking at hyperinflation. The “supply” necessary to have a hyperinflation is already in place and growing each day with each “new drop” of QE. The only thing necessary to spark the wildfire of inflation is the loss of Dollar confidence. I find it quite ironic that an official policy decision of not accepting Dollars could actually be the spark to set this whole thing in motion!
Hi,
When the US dollar implodes and the US debt markets are vacated, where do you think the massive global money flows will head? Will all other paper currencies simultaneously collapse and a massive panic into precious metals and tangible assets ensue?
Surely no one in their right minds would be selling their physical precious metals. The rush to physical precious metals will be like a herd of elephants trying to pass through the eye of a needle.
Physical metal will go into hiding, there will be NONE offered. Please remember that all other central banks have Dollars as the main “reserve asset”…can you say DOMINOES?
Bill, whenever I run into one of these conundrums that our government is facing, and I want to try to predict what they will do, I open my secret safe and take out my sociopath hat, put it on, and meditate for a while.
How about if the government encourages the flow of dollars into American assets, then when things get bad enough, nationalize all foreign assets for reasons of national security?
Which scenario do you think the sociopaths in Washingotn would prefer?
1. Dollar is crashed and foreigners own most of America.
2. Dollar is crashed and the government owns most of America.
Choice #2 would kill two birds with one stone;
1) Big Government would get immensely bigger and stronger, and
2) Evil Big Business that had moved out of the U.S. would lose everything when their host countries nationalized them in retaliation.
If we sold enough assets in the U.S. it could be a net gain for the government, but that would be secondary to acheiving total government control within our own borders.
Getting nauseous, gotta put the hat back in the safe.
Nothing would surprise me and nothing is beneath them.