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The housing sector in Irvine, California is booming, partly because of an influx of funding from China. After I ask Chinese language acquaintances the place the cash comes from, they counsel that it’s transferred to the US by means of mysterious channels.
Commenter Ahmed Fares directed me to a Each day Mail story that sheds mild on one such channel:
First, [Mexican] cartel money-men within the US organize to ship an amount of money with a courier working for the triads, who message their bosses to verify when the drop has been made.
As quickly because the message is acquired, Chinese language gangsters switch the identical sum of money in Mexican pesos to the cartels – which they’re then free to spend as they like.
On the identical time, the triads organize for a rich individual in China to purchase the drug {dollars} by transferring the identical quantity of Chinese language foreign money into accounts the gangsters management.
There’s large demand for this service in China, as the federal government prevents individuals from transferring greater than $50,000 in another country annually in an effort to cease individuals offshoring their wealth.
This will get across the system as a result of the cash by no means strikes throughout a border. The Chinese language foreign money solely strikes between banks in China, and the {dollars} by no means go away the US. . . .
As soon as the rich purchaser has management of the {dollars}, they’re free to spend them as they want inside America – sometimes on school tuition or actual property.
The US tries to ban medicine, whereas the Chinese language authorities tries to ban giant foreign money outflows. Each sorts of restrictions on freedom have the impact of making black markets. I’d count on varied governments to reply with even additional restrictions on freedom. And I count on individuals to search out methods of evading these extra restrictions.
Governments will then reply with even additional restrictions on freedom, and extra black markets will develop.
Rinse and repeat.
PS. The article supplied one other instance of the current surge in anti-Chinese language bias:
US officers consider it’s extremely unlikely that such a big quantity of cash could possibly be shifting by means of Chinese language banks unnoticed by Beijing’s all-seeing bureaucrats, and so purpose they’re both selecting to show a blind eye or are concerned in it.
And but American officers appear to have no bother believing that huge portions of unlawful cash may transfer by means of the US monetary system with out the authorities being conscious of it. I’m wondering why?
The perspective of American politicians (of each events) appears to be: “Why doesn’t China repair America’s drug drawback!”
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