Anybody else see this? It’s from yesterday, but the move looks big.
In China: "The Ministry of Land and Resources has ordered a temporary ban on the sale of land for housing in a renewed measure to ease soaring real estate prices.
Yun Xiaosu, vice-minister of land and resources, said local authorities should not sell land for residential purposes until this year’s housing land supply plan is released in early April."
LOL. And this is the economic powerhouse of the future?
I don’t know if you saw this. It’s from some months ago. But in this news broadcast there are numerous things brought up and one is about how China builds residential houses but nobody lives in them. They are built, bought, and nobody moves in. It’s an investment. I wonder if they have stock on them like the CDC’s and MBS here in the U.S… food for thought.
Three things I noticed in that video.
First, they believe the Keynsian garbage. Govt spending is a good way to get a high GDP. Stimulus packages. LOL.
Second, they have another headache we don’t. Socialism. There is a guy sitting at the top, who declares they must have 8% increase in GDP. Then there are little guys below him who have to get it done. But how? They are not God. So they cook the books. “Let’s spend money on building a city nobody needs.”
Finally, the description of what was going on there is like watching a rerun of our own housing bubble. All the details are the same, too.
Yes.
krazy kaju first brought this video to my attention in another thread. It’s a good video.
And it appears to be a rerun of the housing bubble that occurred in the U.S. and some European countries except on a much larger scale. Australia is also on the verge of a housing bubble pop from what I hear.
Let me get this straight: they want to lower prices by effectively zeroing supply altogether. Keynesianism say you? Pre-scholastic babbling says I.
Demand is also zero.
Now, saying that the state force-feeds buildings and even entire cities on the marked is something, but saying that no one in want to move form old decrepit socialist-epoch condos to new ones, or that no one want to move form dirt-poor villages to cities would be stretching it. Demand form real estate is, I believe, never zero, especially not in a place growing as rapidly as . Banning all sales seems a measure aimed at forcing prices up after they might have gone south due to massive government-sponsored building efforts.
Hahaha, didn’t notice that.
From the video, it makes more sense, in a bizzaro world kind of way.
The top guy declared that GDP must rise by 8%.
All the middle managers shiver in their boots. How can I increase GDP in my neck of the woods by 8%? Who am I, God?
Then, in a flash of insight, the answer comes. Govt expenditure is part of GDP, right? So let me spend on something really expensive. Why not just build a whole city, while I’m at it?
This brainstorm catches on. All the managers start doing it. Demand for a place to build a city rises. Prices of land for housing soars.
So the top guy finally, says “You idiots! Stop building cities.”