China
China is a major force in the world economy. It has grown to be the second largest economy in the world, second only to the United States.
However, China has some real economic issues it is facing. Consider the following:
- For probably the third time in the last 20 years, China’s banks are basically bankrupt and the Chinese government is going to have to recapitalize them;
- Because it is a centralized economy, they have distorted markets by purchasing far too much of the various commodities, as illustrated by a recent article in the Wall Street Journal that estimated that China now is carrying an inventory of copper 50% higher than normal because they continued to buy last year, even though their demand was actually declining… can you spell BUBBLE?
- They are seriously overbuilt with various real estate products that don’t match their population, and speculation in real estate is rampant.
In the financial markets there is a lot of debate as to whether China’s correction will be a “soft landing” or a “hard landing”. While there is a difference, it is almost a difference without distinction. The fact is China’s economy will decline, which will reduce prices of commodities.
How does that affect land values in Virginia?
We believe that as a result of China’s coming economic dislocation, commodity prices will decline which will boost the economy in the United States. Economic growth will increase the demand for land and the products come from land. As a result, land prices will go up.
This virtuous economic cycle in the USA will benefit those who buy land today. You want to be one of them. But not all tracts of land are created equal.
We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years. Let us help you. We enjoy making our clients look brilliant.