It looks like things are getting more dicey for the US economy. What could it mean for us? And particularly, for our RE market? Century 21 Canada president Don Lawby doesn't think it's an issue. He figures that the BC economy is more diverse, and has grown faster than the US economy.
What about US investment in our real estate? Will Americans start dumping their empty condo's, etc. in BC as their payments become more onerous? Their profit-taking will be more profitable in a sense, but will buy them less French wine and Mercedes Benzes. Will American developers continue to build into a flagging economy (just to - y'know - be philanthropic), and keep the economy going?
The US is about to get even more protectionist, and the newly invigourated Democrats are pushing for trade sanctions against China. How will China respond to that? Dump more dollars? It seems as if the horse is already out of the barn.
There will be much less demand for oil, lumber, copper, etc. - all we really have besides tourism, and American tourists will stop coming as their dollar sinks, and the passport requirements kick in.
excerpted from The LA Times -
Another issue dogging the dollar is concern that China and other countries that hold trillions of dollars' worth of U.S. securities may increasingly seek to trim those assets in favor of non-dollar-denominated securities.
"The Chinese have been making noises in recent weeks about diversifying their holdings of foreign reserves," Kasriel noted. A People's Bank of China senior official repeated that theme in comments circulated Friday.
The momentum of a falling dollar could feed on itself because each decline reduces the value of foreigners' remaining U.S. assets.
The risk of a sell-off of U.S. securities by China has been a persistent concern for Wall Street in recent years, but it may be taking on more urgency now that the Democratic Party is about to regain control of Congress, analysts said. Some Democratic leaders are pushing for trade sanctions against China to shrink that country's massive trade surplus with the U.S.
In other financial news;
China is considering launching a live pig futures market to stabilize pig prices...