Tues Post #1: They're everywhere, they're everywhere (but you will be surprised to learn who 'they' are)

Does anything define the California stereotype quite like this Santa Monica police car outfitted with a surf board?

Spending time travelling down the Pacific Coast Highway in Southern California, it wasn't hard to leave the dreary rain of Vancouver behind.

And how could it not be so?

Temperatures in the high 20's, low 30's Celsius. Warm, sandy beaches. Cops who carry surf boards when they go to work... mmmm.

Even when you return to the spring type of day we had yesterday here at home, it's hard to think of the Village on the Edge of the Rainforest as the 'Best Place on Earth' (our provincial government's PR slogan the past few years) after having spent almost a week in the California sun.

Seems I am not alone as a Canadian with that sentiment... but I'll come back to that.

I couldn't help but notice that even in SoCal, there were constant reminders of the local real estate scene.

Helicopter's abounded where ever I went.  Your faithful scribe constantly looking skyward to see if any were yellow and carrying Cam Good with a load of eager Asian real estate buyers.

Why would I think this?

I was in California but one day when I opened the USA Today newspaper to an article telling me that HAM was everywhere in America and buying up real estate:

Buyers from mainland China and Hong Kong are snapping up luxury homes, often paying cash, in major U.S. cities such as New York, Los Angeles and San Francisco. They're coming by the dozens to buy foreclosed properties in downtrodden cities in Florida and Nevada. Chinese buyers are even starting to snap up pricey commercial buildings and hotels in Manhattan.

Yes... it's official. HAM has taken on the same spectre as the Japanese in the mid 1980's. 

And even in California you can't escape articles that Asians with money are snapping up everything.

But an interesting tidbit leaped out at me. Seems denizens of the Land of the Red Dragon aren't the main source of Hot Money gorging on real estate in America.

In the U.S., the Chinese are now the second-largest foreign buyers of homes, behind Canadians, accounting for $7.4 billion of sales in the 12 months ended March 2011, up 24% from the previous 12 months, according to the National Association of Realtors.

Canadians are the largest foreign buyers of homes in the United States?

Hmmm...

Maybe Cam Good should consider flying Vancouverites down the California coast instead of Asians around B.C.?

But if Canadians are plowing themselves into record levels of debt, and they are doing this buying up real estate both at home and in America, it makes you wonder just how devastating things will be when the real estate bubble pops in earnest in our country. 

When the crash comes,  it's not just going to be felt here in Canada.

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USA Today: Inflation is the answer to rising national debt

Bet you thought inflation was a bad thing, right?

In an article in USA Today, (you can see it here) the paper notes that inflation is "as dead as the Wicked Witch of the West in a waterfall. The consumer price index has actually fallen 1.3% in the past 12 months. So why is everyone so worried about soaring prices?"

USA Today summarizes the inflation fears in a word: debt.

As readers of this forum are aware, the US government owes the world $11.4 trillion — $37,000 for every person in the U.S.

In the next fiscal year, the US government will add $1.8 trillion to that deficit.

USA Today debates various scenarios that could occur. What is interesting is the conclusion.

After weighing several pros and cons the article states, "as the deficits grow, the threat of inflation — with the problems that it brings — grows, too, if only because the measures the country needs to take to prevent inflation are so difficult. There are only three ways to cut the debt: raising revenue, cutting expenses or inflation."

Axel Merk, portfolio manager of the Merk Hard Currency fund, raises a question that is being asked throughout the United States right now... should the United States cure its debts by raising taxes and cutting spending?

"Sure," answers Merk sarcastically. "And then we will all fly to the moon."

So what should the United States do?

"Inflation is the answer," says Merk.

Watch, dear reader, for more such articles in the months ahead as US media outlets prepare America for 'inflation' as the solution for the nation's problems - a repeat of the 1930s pro-inflation campaign.

Like it or not... inflation is coming.

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Email: village_whisperer@live.ca
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