That Pesky Capital Account Surplus
From yesterday's Los Angeles Times:
Overseas Chinese have been buying Southern California properties for years. What's different now is that they are starting to do it in large groups and quite openly.
"Before, it was kind of private, a quiet thing among friends," said Jamie Lee, a Chinese American who runs the Los Angeles Convention and Visitors Bureau office in Beijing. "Now it's full-blown. . . . It's huge." Some of these groups "are talking about going every two weeks."
Chinese home-buying missions in the U.S. are part of a broader trend of individuals and businesses in China seeking greater investment opportunities abroad. This week government and business officials from China's southern Guangdong province will arrive in Los Angeles to create a regional chamber office.
That's one way to deal with a trade deficit.
Isn't this the plan?
I thought selling those "darn forners" our assets was the plan given the excess of boomer assets compared with gen-x smaller need for assets. We ship them all our savings by buying their cheap merchandise, in effect spending them out of poverty, and once they are wealthy enough, they ship our savings back by buying our, um, cheap assets. Thus they return the favor with their spending helping us avoid an asset glut. It all works just great as long as the folks with no savings can get access to short-term rainy day loans to help them bridge across any temporary cash flow disruptions.