>ECONOMY: CHINA'S CURRENCY POLICY LEADING TO HOUSING BUBBLE IN U.S.
>JAMES BERMAN, president of JBGLOBAL: "China must buy our bonds to
>peg its currency in order to possess enough dollar-denominated
>assets to serve as a backstop to the Yuan. This gun to their head
>shanghais them into buying treasury bonds without regard to our
>deficits or low yields -- the type of thing a normal investor would
>care about. The artificial buying of our bonds without regard to
>price causes our yields to be lower than they would be in a truly
>rational market, which in turn keeps mortgage rates artificially.
>These low rates fuel our housing bubble in the U.S." (3/21/05)
Not that odd. Not the whole story, but not a small part of it either.
Doug