1/5
This may seem like a specialized story that has nothing to do the raging debate on whether the US dollar can maintain its global dominance, or will be replaced even partially by the RMB, but in fact this story is very relevant.
scmp.com/economy/global… via @scmpnews
This may seem like a specialized story that has nothing to do the raging debate on whether the US dollar can maintain its global dominance, or will be replaced even partially by the RMB, but in fact this story is very relevant.
scmp.com/economy/global… via @scmpnews
2/5
The fact that wealthy foreigners are able and eager to park at least part of their wealth in Florida real estate, but are unable or unwilling to so the same in Hainan, is crucially important to the status of either currency. It is why foreigners want USD, not RMB.
The fact that wealthy foreigners are able and eager to park at least part of their wealth in Florida real estate, but are unable or unwilling to so the same in Hainan, is crucially important to the status of either currency. It is why foreigners want USD, not RMB.
3/5
The problem for the US is that by welcoming so much foreign investment in US real estate, it is left with expensive (and empty) housing and an overvalued dollar that must be resolved by a rising US trade deficit.
The problem for the US is that by welcoming so much foreign investment in US real estate, it is left with expensive (and empty) housing and an overvalued dollar that must be resolved by a rising US trade deficit.
4/5
By the way I often receive dismissive comments from very confused people who insist that the US deficit is good for Americans because it involves exchanging with foreigners real goods for “pieces of green paper”.
But of course foreigners don't get pieces of green paper.
By the way I often receive dismissive comments from very confused people who insist that the US deficit is good for Americans because it involves exchanging with foreigners real goods for “pieces of green paper”.
But of course foreigners don't get pieces of green paper.
5/5
What they get, instead, as this article suggests, is ownership of American real estate, factories, stocks, bonds, farmland, mines, and real businesses. A country can only import net foreign savings by exporting ownership of assets.
What they get, instead, as this article suggests, is ownership of American real estate, factories, stocks, bonds, farmland, mines, and real businesses. A country can only import net foreign savings by exporting ownership of assets.
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