Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

China Moves to Devalue Yuan

wsj.com

Post reply on HN
Print view View original

61–65 of 65 posts

Re: China Moves to Devalue Yuan

#61

Post by ConfuciusSay »

bkeroack wrote: post #37
pjc50 wrote: post #21

Earlier quoted context omitted.

I prefer ftalphaville's take: http://ftalphaville.ft.com/2015/08/11/2137067/this-one-time-... There is a massive but officially not permitted capital outflow from China that's pushing up real estate markets around the Western world. To some extent we're paying for our imported manufactured goods from China by exporting house ownership and rent payments.

Which is actually nice for the US, since Chinese buyers can't pick up a piece of real estate and bring it back home with them, and the ownership obligates them to pay taxes, etc. It hurts the domestic home buyer, though, who has to compete with inflated all-cash offers from these foreign investors.

"the ownership obligates them to pay taxes"

In theory you're right, and they often do pay taxes, but there are many schemes where the foreign investors pay zero taxes. There's no incentive on the industry's part to showcase or investigate to what extent this occurs, but we know it's pretty prevalent.

Re: China Moves to Devalue Yuan

#62

Post by floatrock »

ConfuciusSay wrote: post #61
bkeroack wrote: post #37

Earlier quoted context omitted.

Which is actually nice for the US, since Chinese buyers can't pick up a piece of real estate and bring it back home with them, and the ownership obligates them to pay taxes, etc. It hurts the domestic home buyer, though, who has to compete with inflated all-cash offers from these foreign investors.

"the ownership obligates them to pay taxes" In theory you're right, and they often do pay taxes, but there are many schemes where the foreign investors pay zero taxes. There's no incentive on the industry's part to showcase or investigate to what extent this occurs, but we know it's pretty prevalent.

Can you give examples?

Re: China Moves to Devalue Yuan

#63

Post by floatrock »

astrocyte wrote: post #46

I've asked this question many times to people deeply educated and versed in economics and never got a a good answer... In a world of currency pairing (ratios) A:B:C:D:E Assuming parity among A:B:C:D, if each country prints 1 Trillion in their respective currency, what is the net effect aside from inflation 'potential'? 100:100, 1000:1000 .. It's still 1:1. Assuming there are deflationary forces countering the inflati…

> Assuming there are deflationary forces countering the inflationary force of printing, nothing changes beyond maintenance of status quo.

In the net, yes, but another way of looking at this is as a wealth transfer inside each country.

In the net, the pies remain the same size, but each individual slice is worth less and less.

The result is that as each government is playing the devaluation game to keep up, the organizations with early access to the newly printed trillions in respective currencies increase their relative percentage of the pie.

It's the status quo at the inter-country level, but it's a huge wealth transfer to the politically and financially connected at the local level.

Re: China Moves to Devalue Yuan

#64

Post by sytelus »

floatrock wrote: post #62
ConfuciusSay wrote: post #61

Earlier quoted context omitted.

"the ownership obligates them to pay taxes" In theory you're right, and they often do pay taxes, but there are many schemes where the foreign investors pay zero taxes. There's no incentive on the industry's part to showcase or investigate to what extent this occurs, but we know it's pretty prevalent.

Can you give examples?

NYC super wealthy pay less on property taxes: http://nypost.com/2015/03/09/new-yorks-super-wealthy-pay-les...

Re: China Moves to Devalue Yuan

#65

Post by cma »

Zach_the_Lizard wrote: post #22
pjc50 wrote: post #21

Earlier quoted context omitted.

I prefer ftalphaville's take: http://ftalphaville.ft.com/2015/08/11/2137067/this-one-time-... There is a massive but officially not permitted capital outflow from China that's pushing up real estate markets around the Western world. To some extent we're paying for our imported manufactured goods from China by exporting house ownership and rent payments.

I think the Chinese billionaire effect might be real, but really the chief reason housing prices are so high is because we make it difficult to build housing. This is especially true in the most economically productive metro areas, such as New York and the Bay Area. Even smaller cities such as DC are facing housing affordability crises. DC gained ~90K residents from 2005 to the present, but only gained ~12.5k new hou…

>in the next 30 years DC will actually reach full buildout as allowed under current zoning and height restrictions

Where there is a will: https://youtu.be/gjHo5BZM7V0

Post reply on HN