China could buy US auto makers – with petty cash

China could buy US auto makers – with petty cash

Guess what years and years of record trade deficits and more recently, record exports of debt have got us? I’m not a huge fan of bailing out the automakers. They’ve been entrenched in poor performance for years – and it’ll take a big shakeup to get them out of their doldrums. But this could be the beginning of socialized corporations in America – just much differently than anyone anticipated…

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion dollars would barely dent China’s more than $2 trillion in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.”

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