Wednesday 30 May 2007
Source: Daily Reckoning
By Bill Bonner
«Everyone thinks Detroit is dead», says Porter Stansberry. But that’s only because the U.S. auto industry is bankrupt. It won’t be forever. And the endgame — a massive restructuring of Ford, GM, and Chrysler — is much closer than most people realise. Within five to 10 years, Americans will be making the best cars in the world again — at the best prices.
Investors who end up owning the Big Three’s assets (but not their liabilities) will make a fortune. And so will property investors in Detroit. It will be a city reborn.
We’re not so sure. Where’s Ctesiphon? Where is Mohenjo Daro? What happened to Timbuktu? Cities die. Sometimes they are never reborn. Industries disappear — forever, not just for 10 years.
But we have a suggestion. It is a big city … largely deserted. Well, what does China need? Cities … they’re building new ones at breakneck speed. And what does it have? Money. Lots of it. A Great Wall of Cash.
Can you put 2 and 2 together, dear reader? Sell Detroit to the Chinese. Give them a million green cards. Then Detroit will really boom.
And there’s a lot of precedent for this sort of thing. China, once a fading power, granted concessions to the rising European empires — Hong Kong to the British … Macao to the Portuguese. The Portuguese — when they were a rising power — also got a city on the coast of India … not to mention colonies in the New World and elsewhere.