INFLATION, THE DOLLAR AND HOME PRICES

[stockstradr]

If the dollar continues its’ downward trend and real estate continues to be more appealing to the foreign investor what will stop an investment group from Europe or Middle East to work a deal out with multiple banks to buy…

I truncated your post after “buy” because I like most of what you wrote up to that word. You are on the right track in anticipating the action of foreign monies, but you are mistaken in thinking it will primarily be spent on housing – and you are mistaken in thinking the coming transfer of wealth and economic power (from USA to foreign nations) is a result of our housing downturn.

This is a complex topic and I suggest you read Anne Korin over at http://www.iags.org/

She’s covered the complexities of the topic far far better than I can.

Anne sees an inevitable and massive transfer of power and money to oil producing nations, unless we (USA) break our addition to oil.

Foreign money is not after our homes. Something far more sinister is in play.
Sovereign funds of wealthy oil producing nations are making strategic political and economic investments in America, and the goal is power and control.

Now they may occasionally spend some billions buying corporate buildings in premier locations in American cities, such as in Manhattan, but again that’s not their primary acquisition goal.

Instead, they are using this very recession as a great opportunity to buy powerful ownership positions in the key power institutions of America. These are opportunities that would normally be politically blocked for them were it not for a recession (and credit crunch) pushing key American institutions to bankruptcy. Who do you think sits on the board of Sovereign Funds in oil-producing nations? These are not private citizen businessmen, like we have on corporate boards here in the USA.

The reason I find this topic VERY interesting is that I try to study global trends like this and look for opportunities for investing by figuring out which way and where will the huge flows of money be moving five or ten years from now.

[bubba99]

To the extent that the junk Lehmann jost sold for 22 cents on the dollar are first positions, they just bought 30.6 Billion worth of RE loans for about 6 billion. Assume they foreclose on most of these, they own a large chunk of property. The question is what do they do with it.

If Dr. Doom is correct and the US Dollar declines 50% to 70% in value, Lonestar (the new land owners are geniuses). They just took the only real hedge against a colapse in the dollar by converting crappy loans into property at 22 cents on the now worthless dollar. The fed can screw up the dollar as much as it wants, but Lonestar has tangible real estate assets to be paid off in a 5 billion deflated dollar loan.

If I could buy property at 22% of peak price, I would be taking the same hedge.

[bubba99]

To the extent that the junk Lehmann jost sold for 22 cents on the dollar are first positions, they just bought 30.6 Billion worth of RE loans for about 6 billion. Assume they foreclose on most of these, they own a large chunk of property. The question is what do they do with it.

If Dr. Doom is correct and the US Dollar declines 50% to 70% in value, Lonestar (the new land owners are geniuses). They just took the only real hedge against a colapse in the dollar by converting crappy loans into property at 22 cents on the now worthless dollar. The fed can screw up the dollar as much as it wants, but Lonestar has tangible real estate assets to be paid off in a 5 billion deflated dollar loan.

If I could buy property at 22% of peak price, I would be taking the same hedge.

[bubba99]

To the extent that the junk Lehmann jost sold for 22 cents on the dollar are first positions, they just bought 30.6 Billion worth of RE loans for about 6 billion. Assume they foreclose on most of these, they own a large chunk of property. The question is what do they do with it.

If Dr. Doom is correct and the US Dollar declines 50% to 70% in value, Lonestar (the new land owners are geniuses). They just took the only real hedge against a colapse in the dollar by converting crappy loans into property at 22 cents on the now worthless dollar. The fed can screw up the dollar as much as it wants, but Lonestar has tangible real estate assets to be paid off in a 5 billion deflated dollar loan.

If I could buy property at 22% of peak price, I would be taking the same hedge.

[bubba99]

To the extent that the junk Lehmann jost sold for 22 cents on the dollar are first positions, they just bought 30.6 Billion worth of RE loans for about 6 billion. Assume they foreclose on most of these, they own a large chunk of property. The question is what do they do with it.

If Dr. Doom is correct and the US Dollar declines 50% to 70% in value, Lonestar (the new land owners are geniuses). They just took the only real hedge against a colapse in the dollar by converting crappy loans into property at 22 cents on the now worthless dollar. The fed can screw up the dollar as much as it wants, but Lonestar has tangible real estate assets to be paid off in a 5 billion deflated dollar loan.

If I could buy property at 22% of peak price, I would be taking the same hedge.

[bubba99]

To the extent that the junk Lehmann jost sold for 22 cents on the dollar are first positions, they just bought 30.6 Billion worth of RE loans for about 6 billion. Assume they foreclose on most of these, they own a large chunk of property. The question is what do they do with it.

If Dr. Doom is correct and the US Dollar declines 50% to 70% in value, Lonestar (the new land owners are geniuses). They just took the only real hedge against a colapse in the dollar by converting crappy loans into property at 22 cents on the now worthless dollar. The fed can screw up the dollar as much as it wants, but Lonestar has tangible real estate assets to be paid off in a 5 billion deflated dollar loan.

If I could buy property at 22% of peak price, I would be taking the same hedge.

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