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Culture War Roundup for the week of August 19, 2024

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Does the US need an influx of Saudi royals?

"Need" is a strong word, but rich oil barrons would fit right in in Houston.

Plus you'd be bringing inflation and higher house prices. Australian and Canadian real estate has been rendered ludicrously expensive by rich Chinese buying it all.

My forex is a bit rusty. Wouldn't rich individuals trying to convert their foreign-denominated assets into dollars result in deflationary pressure on the dollar? My sense is that lots of the Chinese demand for real-estate is speculative in nature. Speculative demand will subside once supply catches up. America has much more developable land than Australia or Canada.

I’ve heard similar things about Chinese demand. That foreign real estate is a relatively safe way to store wealth compared to domestic, since it’s out of the reach of the CCP. But I don’t know how credible this theory is. It’s certainly a tidy way to disdain China, which suggests “too good to check.”

Anecdotally briefcases full of cash (which may or may not also get laundered through government-owned casinos) and empty condos are known elements of the real-estate scene in Vancouver. (Canada)

Wouldn't rich individuals trying to convert their foreign-denominated assets into dollars result in deflationary pressure on the dollar?

Increased demand for USD would, ceteris paribus, raise the equilibrium price of USD (that is, the value of USD relative to the foreign currency in question), assuming a free market in forex / floating exchange rates.

This does mean that holders of USD can purchase more units of the foreign currency per dollar, but it’s nonstandard to call that “deflationary”.

If that foreign currency can be exchanged for goods and services that are useful here, that part is deflationary.

In the case of the Saudis, they already denominate oil in USD and there's nothing else to buy with the riyal so yeah. But for Euro or Yen ...