October 13, 2008
China Should Now Purchase the State of Alaska
“Emperor Alexander II decided to sell the territory to the US and instructed Russian minister to the United States, Louis Baydalal, to enter into negotiations with Seward in the beginning of March 1867. The negotiations concluded after an all-night session with the signing of the treaty at 4 o’clock in the morning of March 30, 1867 with the purchase price set at $7,200,000 (about 1.9¢ per acre).”
$7,200,000 in 1867 is the equivalent of around $106,000,000 today (according to this calculator). Let’s say the Chinese are willing to pay 10,000 times as much for the improved piece of property: $1,060,000,000,000. They can afford that since they have around $1.8 trillion pieces of colored paper lying around. It’s high time they exchanged their rapidly depreciating paper money for some real assets.
Alternatively, they could buy up all the land in the American midwest, but relocating the people now living there is more problematic than shipping out the 600,000 residents of Alaska.
The Japanese are famous for paying stupid prices for various American assets (Pebble Beach, Rockefeller Center, etc.) in the 1980s, but the current financial panic presents a golden opportunity for the Chinese to deploy their hundreds of billions of paper dollars by snapping up all prime Alaskan assets at firesale prices: farmland, forests, mines, fisheries, etc.
Here’s looking forward to China’s 23rd Province: 阿拉斯加! (Hank, pick up the phone when the Chinese Investment Corporation calls you soon.)
October 13th, 2008 at 1:47 pm
You mean the same CIC that just got caught in the Reserve Primary Fund? I guess they figured they’d go for something more conservative after their adventures with Blackstone and Morgan. Until they get the hang of how this game is played, they should stick to Treasuries.
October 13th, 2008 at 3:28 pm
@Ollie: Yes, the very one, and of course the Reserve Primary fund debacle (and Blackstone and MS) are excellent examples of why they should stick with hard assets. :)
“CIC may be allocated as much as $1 trillion of China’s foreign exchange reserves.” ALASKA, BABY!
October 13th, 2008 at 11:34 pm
I am willing to cast my vote in favor of the transaction as long as they keep Palin when they get Alaska.
October 14th, 2008 at 4:18 am
Hmm, why sell your land when you can just print the money?
October 14th, 2008 at 9:18 am
@Armin: Printing money has its own problems as we’ll soon find out. (Dramatically weaker dollar on the horizon.)