By Porter Stansberry in the S&A Digest:

One of the strange things about the world economy is the way Federal Reserve policies end up influencing other economies all the way around the world. The Fed is pumping as much money and credit as it can into the global financial system. In America, which is drowning in debt, this hasn't yet caused any significant inflation. But what about in other parts of the world that are better run and better managed?

Take, for example Hong Kong. Hong Kong outsources its monetary policy to the U.S. Federal Reserve via a currency board that pegs the local Hong Kong dollar to the U.S. dollar. Wonder what's happening over there? Real estate is going through the roof, thanks to the Fed's ongoing inflation. Two new luxury apartments in Hong Kong have been listed at a record $9,640 per square foot. Sun Hung Kai Properties, the world's largest developer by market value, hopes to sell the three-story apartments – on the 91st to 93rd floors of twin 270m towers – for nearly $39 million. Luxury real estate prices in Hong Kong have risen 26% since just before the collapse of Lehman Brothers (in September 2008).

The Hong Kong market is a warning of what will happen here if the Fed and Congress keep going with their current massive inflation.

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