The Chinese + Arab Trillion Dollar Hedge Fund

Discussion in 'Economics' started by aeliodon, May 21, 2007.

  1. Okay so China bought 3 billion worth of Blackstone and the Saudis bought GE plastic for 12 billion.

    China has 1 trillion in currency reserves and they're tired of proping up the USD, not worth the paper its printed on so now they have signaled that they will use that money to buy REAL US Assets.

    Same with the Arab oil money. They have signaled they will use their billions to buy REAL US Assets.

    Add to that the Europeans who love to vacation here as they can get everything at half price.

    America is up for sale (on the cheap too).
  2. This seems good news for the market, more buying demand.
  3. I actually remember reading a conspiracy theory that went a little like this:

    The money elites in the US have been diversifying their USD holdings into Euro and hard assets (Oil). Their whole plan is to have the USD destroyed by debt (war + tax cuts + printing USD ceaselessly). Then the USD crashes - which allows them to then use their Oil/Euros to buy everything on the cheap.

    I'm not endorsing the above view. But I read it like 4 years ago and its strange how everything in this country is now being bought up using YUAN, Oil, and EUR now.
  4. There is so much oil right now, they're running out of places to store it, and when they can find empty spots, storage facilities have raised their fees dramatically.

    The world is awash in crude.
  5. Another guy on ET commented that rich guys from Ireland are buying like 10 NYC apartments at a time.
  6. Europeans been buying NYC property for 2-3 years.

    Don't forget what happened the last time foreigners were buying up US real estate with such fevor.

    Problem with Euro is that it is a fiat just like USD and being printed at a comparable rate. As for oil, well, are the elite stocking real barrels of oil or are they buying futures contracts? Cause the real supply of oil is only a fraction of the outstanding contracts.
  7. The Japanese bought Pebble Beach and Rock Center in the late 80's and unloaded them for a loss... What do they say about history?

  8. When foreign investors start buying foreign assets, cover your assets too!
  9. Pretty much, shi*t can hit the fan. When that happens those foreign economies usually get hit harder than ours. But I'm sure this is different this time, LOL. Anyways, our assets can get cheaper and we will be like hoors for sale when that happens.
  10. Mvic


    No not different at all, same old stuff. The Japanese started buying abroad because there was nothing of value left in Japa at the end of that country's boom. The same thing is goingh in now, very little value in EM so they are buying US and European assets. It is a signal that the end of the cycle if near. The weak $ is killing the EMs and eventually along with the private equity mania will cause a liquidity crunch. When that will happen is anyone's guess but I am guessing fairly soon probably this year though I think there will be some sharp upside before then, any day now it looks like. I am out all my EEM puts at a substantial loss and out all my Yen future calls also at a loss and heavily long NQ and EEM calls. Probably a revenge trade at this point but hopefully on the right side of this monster.
    #10     May 21, 2007