Category Archives: Economic Issues

George Soros on China’s Housing Bubble

George Soros continues saying that China is in for a hard landing which may collapse market conditions on around the globe. He says that the situation for investors and banks is eerily similar to those in 2008 with many investors refusing to see the market developing just like they refused to acknowledge conditions in 2007, according to an article published via Bloomberg.

Meanwhile, the official Xinhua News Agency calls Soros partially blind. Chinese government officials say that George Soros’s statement is too important to ignore because of the effect that he had on the Bank of England where he netted over $1 billion dollars by short selling stocks and forcing the British government to pull the British pound from the European Exchange Rate Mechanism. They also say that Soros is an important leader that must be answered because of his involvement in the 1997-1998 Asian crisis causing financial contagion where many investors and government leaders feared a world economic meltdown. During this time on, Association of Southeast Asian Nations leaders which included governmental leaders from Indonesia, Malaysia, the Philippines, Singapore, and Thailand claim that George’s trading caused economies to collapse, especially in Malaysia.

George Soros says China’s current housing bubble is very similar to conditions seen in the United States in 2008. 75 percent of the wealth of residents in China is in real estate with the country having seven of the 10 most expensive cities in the world. Furthermore, experts point out that the average Chinese Tier 1 condo measuring just 650 square feet sells for $300,000 while the same condo in a Tier 2 city sells for over $100,000. In other words, these condos are selling for about 30 times on what the average resident brings home annually. According to the government, Soros should stop worrying about the housing bubble because only 18 percent of their homes have a mortgage because family and friends help young people buy their first homes outright. While only about 10 percent of the United States population owns more than one home about 20 percent of residents in China own more than one home. If the bubble collapses, then the result could be even more devastating.

George Soros and others say that the situation is very similar to what was seen in Japan in the 1980s where prices dropped over 60 percent in five to seven years. If that happens in China, then $12.2 trillion in wealth would just disappear. George Soros and others warn that if real estate prices fall causing the residents to lose their personal wealth, it will have a devastating effect in other cities with a large Chinese population including Vancouver, Canada; New York City; London; San Francisco, California; Manchester, Enland and Melbourne, Australia.

Looking for a real investment? Try Gold!

In their Twitter page and In today’s fluctuating and sometimes crazy economy many may wonder what is really worth investing in US Money Reserves. One thing that has always been a long term winner and been around for ages is gold. Gold’s price increases in response to events where often paper money and stocks and bonds decline. The price of gold can go up and down at any given time, but it always maintains its value on the long term. For millenniums people have seen gold as a way to pass on and preserve their wealth from one generation to the next.

Throughout history gold has been an excellent protection against inflation, because its price tends to rise when the cost of living augments. On the other hand for example during the Great Depression of the 1930s which would be considered deflation (a time in which prices go down, business activity slows and the economy is weighed down by excessive debt) the purchasing power of gold actually soared while all other prices dropped. Gold has been respected throughout the world for its value and history and people have held onto it through the ages.

Gold also maintains its value even during political uncertainty. ItÕs often called a crisis commodity, because people turn to it for safety when there are tensions in the world and its investment remains strong. This last year for example while Europe was experiencing a crisis gold had some major price increases. Often when confidence in governments is low, gold goes up in value.

In many countries like India gold is intertwined into the culture. They (India) are one of the largest gold consuming nations in the world, where it has many uses amongst them, jewelry. October in India is traditionally wedding season and the demand for gold rises.

In China gold bars are still a traditional form of saving to this date. Also amongst investors the demand for gold has been growing. Many see gold as an investment worth allocating funds for.

The U.S. Money Reserve is based out of Austin, Texas and was founded in 2001. It has developed into one the largest private distributors of foreign-issued government gold, silver and platinum.

Hundreds of thousands all throughout the U.S.A. now rely on the U.S. Money Reserve to help diversify assets with gold and silver. U.S. Money Reserve global investors pumped cash into the gold market early this year and it has continued to hang onto most of its gain.

So the bottom line is gold should be a key part of any diversified investment plan.