Asset bubbles only pop if the money supply contracts. Housing prices are a result of more money chasing after a finite number of homes. The number of homes do continue to increase as a result of more money being produced, however the ratio of homes to money is unstable. For instance, 1 to 1, 4 to 2, 10 to 3 etc. The number of homes continue to increase because housing prices continue to rise giving the real estate market more incentive to produce more housing. In order for the bubble to burst. The money supply must contract. For instance 10 to 3, 5 to 3, 1 to 3 etc. Now you have more homes than you have money thus property devaluation.
In addition, you will also see fewer homes going up. Because the property developers that wanted to build homes at 10 are going to have less incentive to construct housing now that the money supply is at 1.
The only force that can cause property prices to collapse is the People's Bank of China. If they set a policy to drain more money than there is pouring in. Then you will have the opposite of inflation, which is deflation.
In short, the comment that I previously read about the Chinese economy was terrible. Let us assume China had 100 air craft carriers. How would this ever pose a threat to the united states? A carrier can only launch air crafts with limited combat radius. How would the Chinese strike montana or illinois? China's threat to the us is much greater than that. On any given day, enough nukes can land on the united states to wipe out the american population. Why would China owe the us? It is the us who owes China nearly 1 trillion in debt after the Europeans dumped american dollars.
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