And what if China buys a million houses in the USA?

Sir David Hale follows a quite plausible story line in his “There is only one alternative to the dollar” January 6 but he arrives to the wrong conclusion. Clearly if the confidence in the dollar drops demand for gold could go up but it is really hard seeing gold reassuming in today’s world its traditional role in backing currencies and many other developments, no matter how crazy, might be in store for us.

For instance what if China decides to buy one million of the actual stock of American houses to better guarantee their somehow shaky dollar exposure and to prop up the US housing market that was a main pillar in a business model that seemed to be working quite well for them?