October 21, 2007
I am often in Manhattan where my fiancee lives. She is a notary and her business entails meeting with people who are purchasing a home (typically a condo) or refinancing an existing home and bringing their mortgage docs to them. Her business has continued to be steady and sometimes overwhelming even though the rest of the country seems to be in the doldrums. What we have seen in the last couple of years is that most of her meetings are with people coming from overseas and picking up real estate in the city. The prices in the city are sky high. The reason foreigners can buy so much is because the dollar is in the basement compared to their own currencies. It's a bargain even if the condos are selling in the millions. Just incredible. Below, you'll see that this is true even in the commercial arena.
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Bargain-hunting foreigners are snapping up U.S. companies at a record pace as the weak dollar, a growing trade imbalance, and spiking oil prices spark a raid on America's corporate assets.
Through September, foreign firms have spent $276 billion to acquire U.S. businesses, according to Thomson Financial. At that rate, the 2007 total will easily surpass 2000's record of $325 billion in foreign buy-outs.
"If they're productive investments, foreigners will receive the dividends rather than Americans, but that's the consequence of living beyond your means," says Michael Klein, professor of economics at Tufts University.
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