Interesting article in the Globe and Mail. Here's a quote,
Quote:
China, helpfully, has sent those many of those dollars back to help the U.S. government keep the lights on. But buying the low-yielding T-bills of a high-deficit country with a depreciating currency does not make a wonderful investment. Sooner or later, China and other foreign holders of U.S. dollars will demand something with a little more upside, no?
That may come in the form of higher interest rates that squelch growth. Or it may come through trading some of their U.S. dollars for ownership of some prime American companies. China has tried this before: A state oil company tried to take over Unocal in 2005, then abandoned it because of a wall of political opposition.
But the U.S. has less moral authority with which to block such a move now, especially if China starts to play nice(r) with its currency. And heaven knows that, after the crash, there are a lot of investors who'd happily take the takeover premium and run. The list of big-name U.S. companies whose shareholders have earned nothing over the past 10 years is a long one.
As Mr. Buffett put it that day two winters ago: “The truth is we're selling America to the rest of the world. It's just a question of [in] what form we sell it to them.” It's also a question of when. As the dollar sinks, the era of the foreign acquirer seems to get closer.
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As dollar tumbles, America is up for grabs - The Globe and Mail
I cant count the number of canadians who I have talked to in the past month who are looking at this as a buying opportunity with the Canadian dollar nearing parity. One couple bought a 2004 Beneteau in Florida and while down there were working on a couple of condos. Another is looking at property just south of us in Sandpoint Idaho. A buddy is looking at expanding his business and buying a US company to do it. ( hes into machine shop stuff and feels he can buy one in the US move the equipment lock stock and barrel to a new location up here cheaper than a Canadian startup)