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!