Wednesday's Top 10 with NZ Mint: Are Chinese buyers supporting property prices here?; America's money printing hooliganism; Debt ceiling chicken; Dilbert

Here's my Top 10 links from around the Internet at 3 pm in association with NZ Mint.

I'll pop the extras into the comment stream. See all previous Top 10s here.

I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

I love the idea of a hooligan running a money printing operation.

1. Chinese buyers the only ones? - Robert Gottliebsen writes at Business Spectator about how Chinese buyers are the only ones holding up apartment prices in Brisbane and Sydney. HT Hugh via email.

Is that the case here too?

Many rich Chinese are trying to squirrel their money away in assets a long way from the arms of the Chinese government and away from the inflationary effects of China's own money printing.

Is this one of the reasons for the strength in Auckland house prices since March?

In many central Auckland suburbs there has been plenty of Chinese money being spent.

Your experience?

Yesterday, I was yarning to Harry Triguboff, the largest apartment owner and developer in Sydney and a major player in Brisbane and the Gold Coast. He tells me that more than 80 per cent of the apartments he is selling in Sydney are bought by mainland Chinese buyers. There will be a similar pattern in Melbourne. The Sydney apartment market is down about 10 per cent but, without the Chinese buying, apartment prices would fall sharply leading to a significant decline in eastern states dwelling prices.

The Chinese have made a lot of money in China and want to have investment diversification in a stable country like Australia. They normally do not borrow from our banks. The Chinese use the apartments either for their children to occupy while they are students here, or they rent them.

The Chinese are also major purchasers of agricultural property.

2. Who will blink first? - Dylan Ratigan looks at who will win the game of chicken between the Republicans and Democrats over the debt ceiling.

Visit msnbc.com for breaking news, world news, and news about the economy

3. A critical moment - Ed Harrison writes at Credit Writedowns about why the spike in Italian bond yields this week is a critical moment for Europe.

We are now seeing Italy face the music. I think of Italy the way one might have thought of Morgan Stanley in 2008, vulnerable but not the most vulnerable and certainly not undeniably insolvent like Lehman Brothers.

So what you do is you treat Lehman Brothers differently than you treat Morgan Stanley. You treat Italy differently than you treat Greece. And I am not talking about bailouts. Anyone can be bailed out whether they are solvent or not. “At the end of the day, what people want to know is who is insolvent and who isn’t.” And they can only do that by seeing the insolvent defaulting and treated one way and the solvent being treated a very different way.

I don’t think the Europeans get this. Here’s what I think will happen. The Europeans will continue with the extend and pretend approach but add more firepower to their arsenal by buying up Spanish and Italian debt to punish speculators. Reports are that this is already happening (link in Spanish). Willem Buiter of Citi believes the ECB will thus be forced to revive its bond-buying program to protect Italian debt auctions or they will fail.

4. America's hooliganism - RiaNovosti reports Vlad Putin has accused America of hoolaganism over its use of its reserve currency to print money and export inflation to developing economies such as China, Russia and Brazil. Bill English is in good company when he criticises the Fed. They're both right.

"They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations," Putin told a meeting of economic experts at the Russian Academy of Sciences.

5. Here's the sort of thing happening on the ground in America - The video below shows a Florida man's house was trashed by bailiffs even though he's not in foreclosure. This is the sort of thing that starts riots.

6. Watch for a fast Chinese slowdown - John Key is mighty confident that China will keep growing strongly and keep New Zealand's commodity prices high and therefore save us all from rack and ruin.

But what if China slows quickly after jumping hard on the monetary policy breaks to control inflation?

Reuters' Kevin Yao reckons China will have to lean very hard on the interest rate lever to contain inflation.

To date, China has been wary of leaning heavily on interest rate rises to combat inflation. But to tackle what Beijing just called its "most prominent" economic problem, that's likely to change.

China will not toss out other tools in its policy kit but would make rate increases a bigger part of the mix. Authorities have largely run out of room to keep wielding the main instrument so far -- raising banks' required reserve ratios (RRR) -- while imposing lending limits would spark a backlash from commercial banks.

More importantly, it's becoming clear that the Chinese economy needs higher rates to fix the damaging effects of negative real interest rates.

7. How the Bubble destroyed the US middle class - Rex Nutting from MarketWatch pulls together the major details to explain why the US economy just can't get going.

He points out the 30% slump in house prices slammed the leveraged middle classes hardest and now they don't have any money.

The prosperity of the middle class has been the chief engine of growth in the economy for a century or more. But now our mass market is no longer growing. How could it? The middle class doesn't have any money.

There are a hundred different ways of looking at the economy, and a million different statistics. But if you wanted to focus on just one number that explains why the economy can't really recover, this is the one: $7.38 trillion.

That's the amount of wealth that's been lost from the bursting of housing bubble, according to the Federal Reserve's comprehensive Flow of Funds report. It's how much homeowners lost when housing prices plunged 30% nationwide. The loss for these homeowners was much greater than 30%, however, because they were heavily leveraged

8. Short termism and the risk of another crisis - Outgoing US banking regulator Sheila Bair has written a great op-ed at the Washington Post. It's today's must-read I reckon.

I’ve had a unique vantage point during my five-year term as chairman of the Federal Deposit Insurance Corp., from the early failure of IndyMac Bankto the implementation of reforms designed to ensure that no conglomerate ever again is deemed “too big to fail.”

Now that I’m stepping down, I want to sound the alarm again. The common thread running through all the causes of our economic tumult is a pervasive and persistent insistence on favoring the short term over the long term, impulse over patience. We overvalue the quick return on investment and unduly discount the long-term consequences of that decision-making.

Our decades-long infatuation with financing our spending through ever-growing debt, in the private and public sector alike, is the ultimate manifestation of short-term thinking. And that thinking, particularly in business and in government, is actually getting worse, not better, as we look for solutions to put our economy on a sounder footing.

9. What happens when the money runs out? - In all the storm und drang around the debt ceiling debate in America, many have forgotten that many US unemployment benefits, sickness benefits and other bits of social welfare will run out shortly, leaving many destitute.

Here's Motoko Rich at the NYTimes:

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.

In terms of economic impact, that is slightly less than the spending cuts Congress enacted to keep the government financed through September, averting a shutdown.

Unless hiring picks up sharply to compensate, economists fear that the lost income will further crimp consumer spending and act as a drag on a recovery that is still quite fragile.

10. Totally Jon Stewart video - John Oliver explains what Britain knows about dying empires with rotting institutions. He has the best summary of the News of the World debacle I've seen anywhere.