-- Chinese investors smuggled out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
-- They make "all cash" purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in perso, in cities like Vancouver, New York, London or San Francisco.
-- The house becomes a new "Swiss bank account", providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
-- Then the owners disappear, never to be heard from or seen again.
How can this be a Swiss like bank account store of value?
If they buy the house from a white Canadian at an inflated price, the money goes to the white Canadian. The Chinese gets the house (or the land mostly where most of the value is). The Chinese just gave all his 19.8 million dollars to the Canadian. All the Chinaman gets is the land, which may appreciate, depreciate (it's possible), or stay the same value, subject to capital gains taxes too if they decide to cash it in at some point in the future.
But the point is he now traded all his liquid cash for land and gets nothing but the illiquidity risks to go with land ownership.
And Vancouver is obviously a bubble because all the hot Chinese money go there.
Some less rich Chinese even pool their money in peer to peer schemes to buy land only to on-sell them to their fellow Chinese money launderers for a profit. That is a ponzi musical chair of land on-selling they're playing and at some point the hot Chinese money will run out and all the Chinamen who swapped their 19.8 million for a piece of land could see the land values plummet.
There must be better ways to launder money than this. It sounds stupid. But then again, the Chinese are stupid investors who overpay for everything.
That 19.8 million house/land would have been around 10 million without the hot Chinese money. And when the hot money runs out, it could crash back down to 10 million, losing half of the laundered money. That's hardly Swiss bank account like.
How can this be a Swiss like bank account store of value?
If they buy the house from a white Canadian at an inflated price, the money goes to the white Canadian. The Chinese gets the house (or the land mostly where most of the value is). The Chinese just gave all his 19.8 million dollars to the Canadian. All the Chinaman gets is the land, which may appreciate, depreciate (it's possible), or stay the same value, subject to capital gains taxes too if they decide to cash it in at some point in the future.
But the point is he now traded all his liquid cash for land and gets nothing but the illiquidity risks to go with land ownership.
And Vancouver is obviously a bubble because all the hot Chinese money go there.
Some less rich Chinese even pool their money in peer to peer schemes to buy land only to on-sell them to their fellow Chinese money launderers for a profit. That is a ponzi musical chair of land on-selling they're playing and at some point the hot Chinese money will run out and all the Chinamen who swapped their 19.8 million for a piece of land could see the land values plummet.
There must be better ways to launder money than this. It sounds stupid. But then again, the Chinese are stupid investors who overpay for everything.
That 19.8 million house/land would have been around 10 million without the hot Chinese money. And when the hot money runs out, it could crash back down to 10 million, losing half of the laundered money. That's hardly Swiss bank account like.
Swapping money that has been earned legally for a house is not "laundering money"
Money laundering is where money gained either through criminal activities or undeclared incomes to evade tax, are "cleaned up" to look like it has been legally earned. Most criminals and tax evaders don't buy houses, they keep their "black money" in cash.
Anyone paying cash (folding money) for a house would certainly be reported to the AUSTRAC taskforce under the AMLCTF legislation. http://www.austrac.gov.au/
How can this be a Swiss like bank account store of value?
If they buy the house from a white Canadian at an inflated price, the money goes to the white Canadian. The Chinese gets the house (or the land mostly where most of the value is). The Chinese just gave all his 19.8 million dollars to the Canadian. All the Chinaman gets is the land, which may appreciate, depreciate (it's possible), or stay the same value, subject to capital gains taxes too if they decide to cash it in at some point in the future.
But the point is he now traded all his liquid cash for land and gets nothing but the illiquidity risks to go with land ownership.
And Vancouver is obviously a bubble because all the hot Chinese money go there.
Some less rich Chinese even pool their money in peer to peer schemes to buy land only to on-sell them to their fellow Chinese money launderers for a profit. That is a ponzi musical chair of land on-selling they're playing and at some point the hot Chinese money will run out and all the Chinamen who swapped their 19.8 million for a piece of land could see the land values plummet.
There must be better ways to launder money than this. It sounds stupid. But then again, the Chinese are stupid investors who overpay for everything.
That 19.8 million house/land would have been around 10 million without the hot Chinese money. And when the hot money runs out, it could crash back down to 10 million, losing half of the laundered money. That's hardly Swiss bank account like.
It's a store of value because Chinese authorities cannot waltz into Canada and claim what they believe belongs to them. The monetary value is beside the point.
I saw two Chinese families in my predominantly white village. They were speaking a foreign tongue. This is a really unusual event. I'm expecting property prices to double shortly.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
I saw two Chinese families in my predominantly white village. They were speaking a foreign tongue. This is a really unusual event. I'm expecting property prices to double shortly.
It's not fair - The only Asians that live in my suburb are Filipinos - And everyone knows that Filipinos are all dirt poor ...
Well, apart from Imelda and Rose I guess - But neither of them seem to be clamouring to live here ...
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