Key points:
- Government drives up real estate prices so that it can profit from real estate transaction fees.
- Government does this by using money printed from thin air to fund real estate loans. Funny money and unkeepable promises far outweigh real money thus driving up prices.
- Corporations buy real estate on credit supplied by state controlled banks.
- Common people invest in real estate using real savings despite the fact that it is bubblized because they believe that government can always keep propping things back up by printing more money.
Lots of parallels to the US but the big difference is a really big difference: Chinese people expect government to prop up housing prices. How can it do that and keep food prices down at the same time? Price controls? That will not work because it has never worked before even though it has been tried time and again. All it results in are product shortages that are even worse than high prices. Chinese leaders better put a stop to the Ponzi soon or they will be dragged through the streets and set on fire when the people figure out that government was conning them the whole time about their "investments" in real estate.
