your friend posts a photo from a vacation you can't afford. and different from. the boss repeats the same old joke of course. your ex-girlfriend still tends to rejection poetry keep count ignore it. we post only what really matters at r.t. to your facebook news feed. there i marinate this is boom bust and these are some of the stories that we're tracking for you today. first up chinese buyers are scooping up tens of billions of

dollars worth of u.s. homes so where and how much are they buying it we'll look into it coming right up then economist and author george magnus is on the program he's weighing in on the possibly be stabilized chinese economy is scary stuff and it's my favorite day of the week here on boom bust tactic thursday today edward harris and i are discussing price wars and where apple technologies i want to miss a moment. with . our lead story today the american dream now homeownership is a staple of the american dream even for non americans in fact the american dream is

that new as big buyer the chinese would have thunk it now according to a survey published by the national association of realtors foreign purchases of u.s. residential real estate jumped thirty five percent last year with chinese buyers leading the way total international property purchases stood at ninety two point two billion dollars according to the and estimates and chinese customers purchased twenty two billion dollars in housing for the twelve month period ending in march now it's no secret that the chinese housing market is a little too hot at the moment so the american housing market is both a haven and a bargain compared to what they can get back at home an area of particular activity here in the us is the law. santal this area between l.a. and riverside now this area is home to several longstanding asian immigrant communities and in fact commercial air traffic between l.a. and mainland china has increased more than four hundred percent since two thousand and three that's a big jump and according to the wall street journal china's buyers are

comparatively big spenders as well they reported median purchase price by chinese buyers was more than five hundred thousand dollars compared to a median purchase price by u.s. fires of two hundred thousand dollars chinese and canadians were followed by buyers from india and the u.k. with investors from each of those countries spending five point eight billion dollars on u.s. homes mexican spent four point five billion dollars making them the fifth largest international buying group now the interesting thing about chinese buyers though is that some of the wealthy chinese have come up with pretty clever ways to evade the yearly fifty thousand dollars per person limit and taking money out of the country so that they can buy u.s. real estate and it's been reported that methods include money laundering through macau casinos and cooking the books of import export companies the bottom line is whatever the means of acquisition may be for this real estate it's obviously worth the risk in today's globalized society.

sticking with the theme of china china's rise over the past decade has been tremendous but some analysts see problems on the horizon and some analysts argue that excesses have built up possibly destabilizing the chinese economy so to get an update on what's happening in china and in the property markets and shadow banking sector i spoke to george magnus economist and author of the book uprising will emerging market shape or shake the world economy now i first asked him to explain why he believes that china's property downturn has barely begun to take a look at what he had. in terms of you know residential real estate prices in commercial land prices they they have been dropping since the end of last year and they're still up in terms of year over year comparisons but the sequential changes since the end of last year have clearly indicating that something new is is just

starting and you know you wouldn't expect it to end after three or four months so it really is against the background of two things which actually have never happened in chinese property cycles before in the last you know ten twenty years are one that the over supplies is often an extreme nature and secondly the leverage which we've never had with the chinese and never had before so i think this is just the beginning of the you know what could be a protracted. decline in the the leading edge role that the construction at sector has played in the chinese economy that probably accounts for twenty five percent of capital investment in china so how can the chinese economy continue to maintain its growth rate if a market that is one fourth of total investment is welting. yeah that's a good question and i had this discussion with lots of people in china and out of

china about you know how they envisage the evolution of the chinese economy as it transitions from double digit growth you know we've had a decade or more in which china has grown at ten or eleven percent per annum and it's now growing at around seven seven and a half and my guess is over the next three or four years it's going to transition into a growth trend that's closer to around four percent but none of us really know to be honest whether that's going to be dumb you know well or managed you know nobody gets hurt kind of way or whether it's going to be more disruptive it will just drop a more violent and i think the problem is that because construction is such a high proportion of total investment spending and therefore of economic growth that. the danger is not so much that we get a price collapse in china or a banking collapse which is what we had in the west in two thousand and eight two

thousand and nine but that you just get and i got a nasty kind of bump in terms of economic growth and the government of china has to basically provide capital to banks and make sure that interest rates you know reduced to levels which in which people won't go bust too quickly now couple years ago as well as increased about sky high prices in china a lot of people were saying the difference between china and the u.s. in terms of property bus is that the chinese were massive savers and americans were not so if it is really true that china doesn't have a debt problem to contend with. that's not strictly true it doesn't have an external debt problem because it's up until relatively recently it hasn't had to borrow from foreigners because it runs and has been running very large current account balance of payments surplus everybody knows about china's infamous

four trillion dollar war chest of foreign exchange reserves at the people's bank of china and so on and so forth so the idea of debt in china has a different connotation it's much more akin to japan in the one nine hundred eighty s. than it is to the united states in the two thousands because in those days of course japan piled up huge amounts of domestic debt and subsequently after the bust and that's what china is doing now having said that a lot of chinese non-financial companies private companies and state companies have been borrowing in foreign currency of brought in the last two or three years so china's debt problem is starting to go external but it's not a big deal yet i think georgia what about saddo banks what's going on there. well the shadow banking system in china is depending on how you measure it unfortunately

of course the whole problem about shadow banks is that they're opaque and very difficult to measure and we don't know you know who they are what they do and what their exploit their vulnerabilities are but by by the broadest definition china's shadow banking probably has about half of its g.d.p. so that's pretty big. and of course the difference between china's shadow banking system and america's will britain's shadow banking system for example over here by comparison is that of course pretty much all of china's shadow banks are owned by state backs it's not all state controlled but much of it is so it's very difficult you know to to differentiate in the way that we do and we know we say well the hedge funds a part of shadow banking and you know there are some money market activities and asset management companies that are part of shadow banking in china it's pretty much all part of the state sector it's just that it's moved off balance sheet for reasons to do with the national innovation and regulatory changes in the recent

years and in the demand by state don't companies and local governments to to borrow money when they were restricted from doing so under normal arrangements with their bankers so it's a it's a murky area it's from will be not as you know implosion prone as a lot of people make out but there is no question that there are serious financial difficulties in months some of the lenders and borrowers and defaults will happen not just yet because the government is taking measures to make sure that things are on an even keel for the time being but they almost certainly will happen in the second half of this year in two thousand and fifteen. now george when we spoke to you in february you told us there is an emerging markets crisis happening but things that died down a little bit since then the damage has been limited so is the crisis over. well the crisis that we had in january and february of this year was was very much about

countries known as the fragile five so india indonesia. thailand mexico brazil you know if these countries were clearly suffering large capital outflows and that crisis clearly has passed along with the recovery of nerves in financial markets in the united states and and elsewhere. but i think that. the crisis in emerging markets although that part of it may return if and when u.s. interest rates go up eventually will wait tapering comes to end later this year what i'm really concerned about in emerging countries is a crisis of growth that everywhere you look whether it's in latin america or in developing asia or in eastern europe the problem is that growth estimates over the medium term a big being scaled back by the i.m.f.

by the world bank by private for costas all the time it's not just a one off cyclical change this is something to do with growth models that have run out of steam it's to do with the need to reboot the way in which countries. achieve economic growth and the old models i think are. being shown to be rather floored and not fit for purpose. that was economist and author george magnus. time now for a very quick break but stick around because when we return ishwar personified author of the dollar will be on the program no ishwar sat down with me to discuss asia and the emerging markets and then in today's big deal edward harris and i are looking into the world of output driven transportation i'm talking about over with and hill and the other ones out there and remember you can see all segments featured in today's show on you tube a you tube dot com bust boom bust or two and on hulu as hulu dot com slash boom

down bust now before you go here are a look at the mere closing numbers of the bell on top of. you like me who want your comedy news and some t. want your comedy news to be a bare fisted no holds barred fight to the dad. like a vampire fighting into the next of the corporate elite billionaire freaks while they're going. well that's what you get with my new show projected in night.

welcome. the show now in the dollar professor. wrestles with how the u.s. dollar has retained its prominence despite the great financial crisis now in his view believed to believe in the safety of the u.s. dollar means the dollar will remain the world's reserve currency and i want to get you shores take on what's happening with asia and the emerging markets especially given the monetary experiment undertaken by central banks around the world right now i first asked him if there is a looming currency war in asia right now here's what he had to say asian emerging markets are caught in this very difficult bind because even though the u.s.

has announced it's putting all positions and interest rates at the short end are likely to rise in the u.s. conditions of stimulus and money is flowing from the u.s. to emerging markets including asia japan is freeing up monetary policy the e.c.b. as indicated once the util to depreciate so they're going to be putting money into other emerging markets and china is not a living its currency depreciation emerging markets like thailand indonesia korea feel stuck and what are they going to do they're going to keep their exports completed thereby accumulating the reserves and intervening in foreign exchange markets so i suspect currency tensions certainly on the scorecard ok now is far it seems a little bit perverse to me that in the last crisis the dollar strengthen a little bit perverse but even more that our capital often first from emerging markets to developed ones what's going on with that what's the story with us now this is something very strange in principle capital should be flowing from the richer countries to the poorer ones but the problem is that the poorer countries don't have enough capacity to absorb all this money coming in and also they don't

want to cut and cease to appreciate because if they couldn't see this work to appreciate just what would happen if capital flowed in that would make their exports less competitive and many emerging markets feel that having exports is going to be very important for their growth strategies so they're trying essentially to export capital which is what china has been doing for instance in order to keep that in mindy from it but he. waiting and this is led to these very strange flows of capital but the additional problem is that any time latest turmoil any of it in the world in the u.s. in the eurozone autumn emerging markets people who own safety and they want safety where they come ultimately they come back to the u.s. dollar speaking of christmas in general because you can focus in on a lot whether it's currency or some other form you know some of our guests are skeptical about the benefits of financial complexity in general and you know do you think that financial deepening meaning that an increase in sophistication in finance the world of finance is

a good thing or does it need to have more systemic risk it depends on where you're starting from if you think about emerging markets like china and india they need financial market development they need a broader set of markets like corporate bond markets right even better at those markets i mean we speak with shit about it it is markets because in the us and perhaps in europe in the u.k. they've gotten out of hand but there is a real need for david just markets for traders who want to hedge their risk on exports and imports so in fact i think we will come to a somewhat happy a middle where there is. restraint of finance in the advanced economies and the development of finance in the emerging markets which really need better financial markets which need better access to the financial system so i hope that there will be a meeting somebody in the middle ok now is our current monetary system flawed in that you know. if it is in fact fought how do we make it work how do we fix it so that it can move forward i think the biggest issue of that i know is that there is too much dependence on monetary policy if you look at the u.s.

fiscal policy was not supporting that it covered in that and many reforms we need in the us even tax reforms that instance none of that is happening some monetary policy is getting the entire burden of trying to support. maintain inflation a reasonable range prevent the stock market from getting to fight ahead of itself and this is true at all in the world the bank of japan the european central bank and even emerging markets central banks are being asked to do too much and monetary policy because you have more financial integration on the world it has spillover effects which is unavoidable so i think that's the key problem we need to fix in every country you need a better mix of policies especially structural reforms and we also need to do forms to the global financial system better for instance emerging markets don't feel they have no alternative but to self insure that is accumulate currency reserves to protect themselves from all this capital flow volatility now as how do you think the present system compares in terms of robustness to other monetary systems error

in monetary systems and pass no many people have argued that perhaps we should move back to the gold standard i don't think that's going to happen because as we learned from the previous crises if you don't have the ability to provide a lot of liquidity in a time of crisis which is what a central bank like the fed can do it very effectively that can make things worse and a gold standard would constrain liquidity if you think about fixed exchange rates which some have argued would work better on a single currency and their reality again is that with lots of capital flows that on the world the exchange rate actually access a very useful shock absorber so giving that up would not be a good thing especially for emerging market economies so i think that real focus should not be on trying to fix the monetary system but in terms of trying to get better financial markets better financial market regulation and structural reforms in these countries so that the burden gets taken off. monetary policy in particular now in your book that dollar traffic goes into some detail about you know the backdoor scheme mean basically that has happened in the monetary system era and an

heiress past as well so could you give the audience your take on one of the more colorful episodes of scenery well the g twenty meetings that only see interesting to think about and in fact there was a period when french president nicolas sarkozy felt that it was very important to try to become friends with the chinese by arguing that in men be should become a major currency in fact that was a confidence that the french had proposed to the chinese which they resisted but which finally they put together and which a few academics were present at a slow but lots of the most powerful finance people in the world and nicolas sarkozy was pushing very hard saying that and we should become a dominant kind of the sort of the chinese on the other hand was saying look we think this is a good idea for this article but hold on because we think that this is both costs and benefits and we don't want to rush ahead with this is it is very strange that the chinese saying let's take it slow it and president sarkozy saying let's go full steam with it and when be internationalization. that was the

author of the dollars shop time now for today's big deal. time with edward harrison and today is my favorite big deal day because it's thursday which means it's tech thursday today and word and i are discussing hoover and a price war and wearable technology but the logic for now before we get into current problems i want to quickly touch on something kind of funny but also kind of scary story that happened here in d.c. now apparently a guy got kidnapped kidnapped after getting into an over and in fact he tweeted about it because you can't get kidnapped about tweeting about it. was what is the say here and we're here to help is so basically where is crisis management they're really they were going to say that they're saving rioter of the u.s. a lot said you've got to know so edward here's the question is regulation kind of

good in something like this i mean if you're if you're going to get driven off to no man's land with your driver you kind of want to regulate or around to save you from saying that no so i mean the general question is is regulation good i guess and the question answer i think is there always there's always going to be regulation the real question is whether you follow the regulation and whether it's over regulation from my perspective is going to be some regulation of some level like for instance just the other day. in barcelona they came down on air b.n. b. because people were reading up their place do you want that kind of regulation or. regularly but at the same time when you deal with large for a small firm say that large firms are benefiting from that and basically a large firms are not getting you know you're not following the regulations ready so all these banks basically run roughshod over mortgagees and what do they do they paid money which comes to their shareholders pocket no one went to jail you know

it's a complete shambles so there's got to be a balance not shut up or some process essentially don't like weed out the dangers and while i agree with you air b.n. b. went a little too far you know i think it's called what i think the regular went too far and that's i meant the regulator went too far on air b.n. b. but it seems like there should be some some regulation somewhere in there now i think that there should be should be regulations and you should stick to those regulations but the key is that we usually would we see is regulatory capture and that means the regulator basically is in bed with the regulate and they get a benefit as really from keeping competition in the market and that's what we see with as an example yes and i actually want to get on to that because on the business side of a very you know over is apparently getting a lot of a lot of competition but from serious competitors like clifton hello other ride services so can you give me an update on what's happening here and basically what we can expect from her and all these other services moving forward well here's my personal take my take is that the internet is a price discovery mechanism so we're basically what happens is you have prices all

over the in various places and they come together in one in the internet and as a result of that that means it drives prices it creates good deflation so called good deflation. is valued at eighteen billion dollars yet you have all these other competitors coming in and they have no barriers to entry in that market why they did eighteen billion would in fact now they're in a price war as a result of trying to drive out competition with lift inhaler right i think it's completely over i think lived in a halo going to get in there can the price you can. when you go down it's going to benefit but you know we're going to see later on that they're not worth eighteen billion dollars so you're bearish. now i want to get on to this wearable section because this is something i really want to touch upon you know zinah roberts rossi she's one of my favorite fashion bloggers and she tweeted out a picture of one of the new wearables called ring lee and ring liza technology

unable to bring that apparently alert to when certain things are happening on your phone so you can configure the ring to the actual physical ring to blink or vibrate selectively when calls texts or e-mails come in or whatever else you you want to be alerted to but you know really is interesting because it targets the fashion minded one and said you think this have a workable shows a degree of maturity in the wearable space because i do you know very good for my. family members in the fashion industry and i think that in truth we should definitely have more fashion on the show but i sort of retail types. on that and you know so i think that wearables it's showing you know maturity in the market it's a great thing that we're seeing this kind of thing where you know it's not just a big. technological computer or a gadget on your wrist but rather something that's pretty sleek and spoilt for that and that shows you that unlike what you were saying before where boys could be it

is that i mean i actually think this ring is is pretty cool and it's pretty too it's like a big cocktail which i think is really nice statement piece if you look you know here's the thing it's a learned to mind your phone's doing something but none of the selling point is that the ring is less intrusive ensure a life because your ring is telling you that your phone is ringing is it really the more technology we have is it just keeping us more more distracted to what we're doing in the present definitely so are we getting so called the productivity benefits out of this i don't really think that we are done studies of what they found is that the whole idea of multitasking is total nonsense. that we can't really multitask at all in that we're much less efficient and that our mistakes increase when we try to do more than one thing in the time so when you have the email when you have that costly type of mentality that's always going to be different you know if you're going to be less effective as a result of right something's going to suffer all to make a difference but this is the fun as always a lot of talking there is

a love to hear from you give us some ideas to talk about tech thursday so please drop us a line of facebook facebook dot com slash boom bust our t. and please tweet us send us more ideas there at any of them at edward and it's from all of us here at boom bust thank you for watching i'll see you next time. well. it's technology innovation all the developments around russia we've got the future covered.

please. please. please come and watch n.b.c. news all the face time peter's. mother.

a pleasure to have you with us here on t.v. today. i would rather ask questions to people in positions of power instead of speaking on their behalf and that's why you can find my show larry king now right here on our t.v. question for. i'm

. a society. i think. kind of can. do and the bank and all that all about money and others that actually fix the politicians write the laws and. there's just too much. i. feel. it's illegal. elude. to. feel each.

that i'm such. a much bigger cut. that i am sure that. the touch. out of touch israeli air bombardments of gaza have now led to the deaths of more than ninety palestinians among them many children we hear from those who are right in the midst of a shell. functions between the u.s. and to germany reach a new low as berlin kicks out a top cia official in retaliation to the latest spy scandal. plus the jihadist offensive in syria and iraq attracts fresh recruits from western countries as the self-proclaimed islamic state calls an all on all muslims to join the fight there.