Alert: Gotti is reading Zero Hedge

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Though I’m not sure he knows it! From Gotti today:

We know the Chinese have pulled back from investing in Australian real estate and that there are thousands of apartments, particularly in Melbourne, which are being built based on sales to buyers that have been secured with a 10 per cent deposit, with doubts over whether these Chinese buyers will be able to complete the purchase (Dramatic shifts herald a new era in residential property, May 12 and ATO bombshell is a fresh blow to Asian buyers and the property market, May 19).

But we are just a side game. The real action is in New York. Here I am grateful to Bloomberg for uncovering what has happened because the US and Canadian forces will further affect Australia. I am publishing extracts from the Bloomberg report and then will give you a link to the whole report.

Like Melbourne and Sydney, North American cities such as New York, San Francisco and Vancouver have seen massive flows of legal and illegal Chinese capital which have created a massive rise in real estate prices which have all the appearances of a bubble.

The Chinese cracked down on the illegal capital flows last year and early in 2016 but it took time for the crackdown to take effect. But now it’s starting to be felt in North America.

…The Bloomberg report can be found here.

The link goes to Zero Hedge not Bloomberg.

Don’t get me wrong, ZH is a brilliant resource and pioneering media. MB is in part based upon it and other US blogs like Naked Capitalism and Calculated Risk. But you need to take many things that it says with a grain of salt given its editorial point of view is somewhere between Fight Club agrarianism and outright Doomsday prepping.

Put that together with Gotti and OMG!

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.