As in all of the news recently, China plays a big part in even the most local of news. The Sacramento area real estate boom is slowing down. The part that China plays in that scenario is the fact that with a devalued or floating Yuan, there is less incentive for China to prop up our economy by buying our debt. China was buying a billion dollars a day of US bonds. With an increased debt load, more investors are looking at other options for investment and not housing, so the interest rates are heading up, to increase their attractiveness.
And I read the other day that with Chinese unemployment at 15%, their government is under some pressure to make certain that they remain competitive in the world market...that's good news for Wal-Mart, who will use that info to leverage their Chinese deals even more. That's probably why Wal-Mart announced their intention to do more business with India, just the other day...giving their Chinese friends a warning that they need to remain competitive if they want to keep Wal-Mart happy.
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