Comment by chansiky | Hacker News Reader

Comment by chansiky | Hacker News Reader

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In effect, you're saying that Vancouver has become the laundromat of converting illegitimate capital produced under a shadow banking system into real valuable assets.

This is bad for everyone else in our global economic system. It would be akin to someone in a game of monopoly accepting counterfeit money. The rest of the players have to play the game with actual monopoly rules while one player is allowed to make up whatever they want. Guess who's going to win that game?

Of course its a shadow banking system for a reason, because keeping everything hidden gives them a cheaters advantage. Revealing what happens there would be admitting to cheat and fraud.

China is seriously going full force with deception, passive aggression, claiming innocence, claiming moral high ground, while doing everything that is in the book of machiavellian/art-of-war tactics, and the rest of the world is doing nothing about it. (hardly surprising given their cultural mythologies and inclinations which differ vastly from for example a "liberty, justice, and freedom-for-all" mantra that is the foundation and aspiration of a different nation)

It's not only china that does this, and it's not only Vancouver that is the destination for this, it's just Vancouver is a popular destination for pacific rim countries for this AND has no superstar industry to speak of like London & NYC to help balance this.

In SF, NYC & London you can also partly blame their superstar industries and economic growth on the RE market, but NYC/London also has their empty Condo buildings too, and their equivalent of 'wealthy chinese' is 'wealthy russian'.

Ex: https://www.nytimes.com/2017/07/21/upshot/when-the-empty-apa...

https://theweek.com/articles/736313/how-foreign-investors-la...

Yes, there are a lot of bad actors are in the system, which is why punitive measures need to be enforced. We can't pretend that they aren't being sneaky about their finances. China in particular has been notorious in their two-facedness presenting their economies as safe havens while covering up their underhandedness. If they aren't put on the spot and faced directly for what they are under their mask, they'll continue to shapeshift and avert transparency into a system that disproportionately benefits them. Economists have long predicted their economy is in a bubble, but because of the way they prop it up, they are able to inflate far longer than they would in a more transparent world, thus drawing investors into their falsely good looking economy while acquiring foreign assets that have real value with that extra purchasing power.

What’s bad about foreign capital influx? Someone has to plan these buildings, someone has to build them. It creates jobs in various sectors.

We should be glad that the Chinese view our countries as safe and want to invest into them.

The real problem is that our local governments are unable to adjust the supply to the demand. THAT drives up prices and nothing else.

/edit: You could even make a law that foreigners can only invest into new construction which would make it impossible to invest without value creation for the local economy.

The jobs associated with planning and building are clearly a positive in an absolute sense. The counter-point is this positive aspect is very much outweighed by the negative aspects. The housing supply for people who actually need somewhere to live is being limited which drives up the housing prices and rental rates.

Re-reading your comment, it feels like you've missed the point that these units are largely not being made available to the housing market.

Foreign capital influx isn't bad unless the capital that is being traded is bad, which in this case it very likely is.

On the direct trade it's a win for both sides, the side with bad money turns it good, and the the side with the asset converts it into capital (just like every other trade, which is always a win for both sides), but not at a broader level where illegitimate funds enter the system and become legitimate, whereby the one producing the illegitimate funds are the true victors, stealing away with real value while the rest of the market is destabilized for introducing illegitimate turned legitimate extra capital.

To clarify, by not doing due diligence and allowing funds created in a nontransparent shadow banking system to enter the real market, you are giving the power of printing money to a foreign entity.

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