By Porter Stansberry in the S&A Digest:

Just when you think American finance can't possibly get any more bizarre... Our government is now proposing to finance large-scale Chinese government purchases of U.S. real estate. No, I'm not making it up.

China Investment Corp. (CIC), China's $300 billion sovereign wealth fund, is considering buying huge swaths of distressed U.S. real estate, via the U.S. government-sponsored Public-Private Investment Program (PPIP). PPIP, you may recall, was created to rid banks of toxic mortgage assets by luring private investors to buy the assets with financing from the U.S. government. CIC is in talks with BlackRock, Invesco, and Lone Star Funds about buying real estate assets – including commercial mortgage-backed securities. Because most of the equity in these buildings has disappeared, buying the debt and foreclosing is the easiest way to gain control of the real estate.

Just take a minute and think about this... First, for the last 20 years, we've filled China's coffers with our paper receipts (dollars). In exchange for several future generations of savings, we got cheap furniture, children's toys, and electronics we didn't deserve. Now, we're going to finance – with future generations of taxes – China's purchases of our trophy properties.

What can I tell you? I often feel like I'm the only sane man in a world gone mad. My wife tells me I'm the crazy one. But this? How will I possibly explain this to my children and grandchildren?

Crux Note: The S&A Digest comes free with a subscription to Porter Stansberry's Investment Advisory. In his latest issue, Porter warns about the serious wave of inflation he sees coming – and tells you exactly what you need to do to prosper from it.  To learn more, click here...

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