France Part 3


The question is: Is France living on imaginary money?

The answer is in part “yes”. The running costs of France S.A. are greater than the government’s income. They cant print money to pay the difference so they have to cheat. They have already raided various pension funds. Excuse me, but I remember a certain Robert Maxwell raiding the Daily Mirror pension fund. You just dont do that. The French government has done it. What happens when so many hapless French folk retire? They are going to be in trouble.

I’m sorry to say that the French have just voted in a socialist president. That’s the last thing they need. Way back in Part 1 of this saga I noted that capitalism is the system that pays socialism’s bills. We are in a bit of a spot because so much socialism across the western world has made a good attempt at muzzling capitalism. The trouble is, there is no longer enough money to pay the bills. Socialism’s days, in its present form, are numbered. The socialists have run out of capitalists’ money. The trouble is, capitalism isn’t looking too healthy in many parts of the world either. It’s a disaster in America, total chaos in China, and looking dodgy just about everywhere else.

The current way round this problem I noted in Part 2. Think War Bonds in 1940’s Britain. Do any of you remember what your parents or grandparents had to say about them? Does anybody know of anyone who got their money back? Of course not. That’s not how these things work. It’s fraud. It’s theft. It’s crooked accounting. It’s sleight of hand. It’s survival. And that is how France is surviving.
The banking system is bankrupt. Loans outstanding cannot be repaid. Everything hinges on the skyhooks provided by the ECB.

This brings us to one very simple question which no-one dares ask. How much is a euro worth?
Look at a sterling currency note, then look at a euro note. The sterling note is backed by a guarantee. Dont ask too closely what that guarantee is worth, but what’s on a euro note? Nothing, absolutely nothing. Who even issues it? It’s a joke. No-one guarantees anything. It’s just a bit of paper. It is worth what anyone says it’s worth. While people think it’s worth something, then so it is. When people lose faith in it, it becomes worthless. It’s a fib which people in believe because it is convenient to believe it. I would not like to put too much store by it. I think it is dangerous to have one’s wealth denominated in euros.

In this respect France is not much different from any other euro-zone country. On the other hand, France does have a world class economy. It will survive, euro or no. However, I would not buy into France any time soon. You would be buying into a lottery. Buy in Norway, buy in Singapore, but dont buy in France.

I dont know whether we are entering the end game of this particular mess, and I dont know how it will turn out, but I dont like uncertainty, and neither do financial markets. If you are thinking of putting more money into France, then change your mind. You can wait. France wont go away. Wait till the disaster happens, then buy.

There was a second question in that original email that started me off on this rant: why is everything so expensive in France? I dont know. Is it? I was last there about nine months ago and I didn’t notice. If things are expensive it is because the place is falling apart. That’s one of the things that happen. It means no-one can survive at the normal level, so the level is ramped up, and so many people are sucking value out all along the food chain. More evidence that all is not well.

The third question is: Is France falling apart economically speaking?

I dont think so. But it is not a healthy economy. Two points need to be made here. The first is; it’s the government that’s broke not the country itself. Secondly, it’s all very well to claim that France is a socialist country. That is simply not true. It is a capitalist country that spends all the profits of capitalism on socialism. That’s not the same thing at all. Being a capitalist country it runs on capital. That means it can only function properly with a clean efficient banking system. That it doesn’t have. If the banks are broke then the oil that keeps the wheels of industry turning is not available, and industry starts to creak.

France is not that much different from any European state. The tentacles of government have encroached so far into every aspect of life that it is, like ivy up a tree, slowly killing the source of its lifeblood. Things have to change, but I dont see that people are ready for change. After all, what is happening across Europe? Folks are voting for more ivy to suck more lifeblood from a stricken tree.
This thing has to get worse, and it is going to take time. There is a long way to go yet, and most of that journey is, I am sorry to say, down.

One other point. Countries are trying to pay down debt. Make it simple. Think of someone trying to pay off an underwater mortgage. The more money you throw at it the more money you are throwing down a hole. The money vanishes. Why? Because the value of the asset is decreasing, sometimes faster than you can throw money at the debt secured on that asset.

If you print money to pay off government debts what’s the difference? The money goes down a hole It isn’t spent, it was already spent before. You are trying to pay back a debt, not increasing the money supply.

Hold on, that means all this money printing wont bring on inflation. That means inflation wont eat away the debt. Deflation will continue making the debt bigger. Oh shit!

That’s what’s currently happening in Europe. The central banks are hastily printing money to fill a hole that gets bigger with each day. In short, this mess gets worse month by month, and will continue to get worse until someone stops playing silly buggers, and looks out the window and finally sees the massive train-wreck.

The cost of living may be going up, that’s because of taxation — money sucked out of the economy — and some commodities like corn, wheat, sugar, oil, and so on gaining in price, but how much are large items like houses going down? Balance one against the other and we have deflation not inflation.

My survival bill for the year is about £6,000. A 3% rise in that equals £180. My home was worth about £400,000. That’s decreased in value by 5% over the past year. That means I’m poorer by £20,000. Take off the £180: hey guys, that’s some deflation.

Back to France. One final small point. You should also remember that France’s financial system has a nasty habit of crashing. It’s done it four times in my lifetime. The £ sterling has been a reliable store of wealth at least since the thirteenth century. France has had four different currencies in my lifetime. Do you need me to spell it out?

Maybe one day in the not too distant future I will retire to southern France and live a disgustingly self-indulgent lifestyle drinking fine wine and eating far too much rich food. In the meantime I’ll wait until things get much worse. Then I’ll buy. But I wont rely on the French economy to provide me with a pension.

Invest in France -2

Invest in France

In part 1 of this discussion about whether to invest in France I said that money used to be made from gold and silver, and the amount of precious metal in each coin gave that coin its value. Further, the amount of money in circulation stayed roughly the same relative to the goods that could be bought and sold within the community. If the community produced more goods then that store of money was worth more. The money supply could reasonably be expanded to keep goods and money in equilibrium.
Once the money supply is extended beyond the increase in goods then you have inflation: money begins to be worth less. That is what has happened throughout the twentieth century. However, there is a period when you have more money in your pocket and the value of that money hasn’t yet dropped. There is a delayed effect to inflation. The usual theory is that inflation is generally 2/3 years behind the increase in the money supply. That means that the money gets into your pocket before prices go up, and you always feel more wealthy despite the fact that the value of the money is decreasing.
There are problems with this. The first is that in order for the wealthy feeling to persist inflation has to be continuous. Once the vicious circle stops, people start to feel poor. This is why we are always told that a little inflation is a good thing. We are continually feeling more wealthy, and in order not to allow inflation to have it’s real effect on us we spend our increased money supply buying things before they rise in price. They then rise in price, but we’ve already bought them so we feel even more wealthy.
Obviously there are times when the whole system comes adrift, and there is a crash. That usually happens about once a decade as no-one has worked out how to really manage this form of economy. Often the crashes are minor adjustments. Occasionally those adjustments are of a more serious nature. We’ve hit one of those right now.
All of this is down to one very simple problem. Prior to the twentieth century most countries either had no plan to cope with the poor, or they had one based on a redistribution of a certain amount of the wealth of the community. That was in Europe mainly derived from tithes, or the appropriation of a tenth of the wealth created. This was distinct from taxes which were in the old days basically a device for collecting money to pay for wars.
In the twentieth century our whole way of doing things changed drastically. Socialism became a political force. Capitalism was seen as a way of making lots of money. Governments began to see that socialism could be harnessed and used to extend government, and socialism could be paid for from the profits of capitalism.
Unfortunately, that system creates an ever expanding bureaucracy which eventually becomes top heavy and strangles the wealth creating side of the community. It has been the downfall of every state since records began. Once the payouts become too large to be supported by the payers the system implodes. That’s happened in Europe, Japan, and the United States.
There is scarcely a European state that lives within its means. That means deficits just increase and increase. Central banks have found a way to deal with this. They print money. That causes inflation, and inflates away the debt. Let’s go back to my example of the US$. If you had bought US government bonds in 1912 and they matured 100 years later, when you went to the government to get your money back you’d only get 3 cents. The American government would have had 100 years’ use of your money, and returned you only pennies.
That’s why governments like inflation. It’s a form of taxation. It has been rampant throughout the western world for the past 100 years.
Now let’s answer that question I left you with last week. Will the French banks get their money back?
No. They’ve lent it, and it has been spent. It’s evaporated, and wont be coming back.
On the other hand the central bank, the ECB, will issue bonds which will cover that debt with more debt. The bonds will be equal to some of the debt, and those bonds will be negotiable. That means the banks who receive these bonds in return for the debt that wont be repaid can borrow against those bonds at an interest rate below the level of inflation (the ECB loan rate is currently 1%), and invest in something else for a much higher return, and thus re-build their finances.
By the wonders of capitalism money is created out of nothing, borrowed against, and lent out to make more money which can then pay back the original loan, and everybody is happy. I devote a whole section to this method of making money in my book on buying and selling property. I am currently revising this book. If you want a copy, let me know and I will reserve one for you. I hope the revised version will be ready by the end of this month. It is essential reading for anyone interested in real estate and money.
Back to the plot. Let’s now answer question number one. Is France living on imaginary money? It’s taken us a while to get there, but you can now see that the answer is “Yes”.
But so is almost everyone else. Next week I’ll show you what this means, and why it is almost impossible to work out what happens next. And maybe you will find that it doesn’t really matter. What an intriguing possibility.

Invest in France?

Should I invest in France?

“I read your comments about the debt problems of various european countries and the difficulties likely to face France’s banks – it seems according to the blog dates that you wrote this in 2010 and yet a) they seem just as relevant now and b) if this was true in 2010 then how is it that France continues to operate an economy which seems to rely for support on the intervention of fairies or imaginary money.  For example, my neighbours in France are farmers; they grow a few cows, some eggs and a small field’s worth of various veg.  This seems to be the norm in the area.  I find the prices for almost everything in France breathtaking compared with the UK – food is +20 to +70% higher; a USB hub which would be a suitable item for the pound shop in the UK is ¢25; even French wine is looking uncompetitive with imports.  How do they live?  How does the government make ends meet? Do you have any insights?”

I have received the above request in a recent email. First, let me refer you to the article I wrote on France back in 2010:

Now let’s try and break this email down into various slightly simpler questions.

  • Is France living on imaginary money?
  • Why is everything in France so darn expensive?
  • Is France at risk of falling apart economically speaking?

Underlying all of this is the implied question: should one be investing in France?

I have for the past five or six years been saying that France is, in many respects, an enigma. If I had to make an investment decision about the place I would have to say that the pros and cons would just about outweigh each other. Not much help in that. Let’s go back to the original questions.

1    The first question does not just relate to France, but to most of the world. We can go back a little to the nineteenth century and look at the way money functioned. Then we can look at the way it functioned in the twentieth century, and wonder.

If we look at money prior to the twentieth century we find it was always based on some basic concept of wealth. If you live in a country with a lot of diamonds, and other folk want diamonds, then the basic currency would be based on diamonds. If it’s potatoes, then that’s the basis of your wealth, and the country is wealthy inasmuch as it can produce lots of cheap potatoes and export them for good prices.

In the old days that was the way you appraised any country’s basic economic position in the world. You can look at France in that light and see that France has an economy worth approximately the same as the UK’s. It isn’t about to fold up any time soon. In terms of the planet, it’s economy is in the top ten. What would alter that? In the short or medium term, nothing.

In the old days that wealth would translate into a means of barter called money, and that money would be represented by gold and silver. In short, the coins in your pocket would contain silver and gold that were a direct division of the country’s overall wealth. That was the case up until the first world war. After that the world changed drastically.

One other point to note: the value of money stayed pretty much the same over long periods of time. As I mentioned in my 2010 article, John Law introduced a great new concept into the French way of life. It was based on credit. It was based on sleight of hand, illusion. It worked brilliantly while the illusion lasted, and ultimately crashed, bringing the whole French economy and financial institutions into total chaos.

The country recovered. That’s the way things go. A country can be devastated by raging forest fires, and the following year the place is a charred ruin. But things grow again, and the world continues to turn. It’s the same with banking, economies, capital, countries, and so on.

What happened throughout the western world after world war one was that deficits became a way of life. Money became divorced from one form of value (gold and silver backed by the productivity of the nation) — in other words, money became divorced from a tangible base upon which value could be mathematically computed.

Keynes and co ushered in a general view that money could be looked at in a totally different way, and economies and governments should have a relationship much the same way as the Pharoanic tradition of the seven lean years and the seven fruitful years, and an overall economy should function based upon hoarding in the good times, and spending in the bad times.

This eventually became debased into a totally hopeless system whereby governments spent the money during the good times, because good times encourage spending, and everyone feels good about it, and subsequently having to go into debt in order to spend during the bad times. Thus the deficits build and build.

250 years ago the UK national debt was a million pounds. Now it’s a trillion. in 1900 the £ was worth roughly what it was in 1800. In 2000 it is worth about tuppence. It’s all down to the way deficit spending is handled by a government with the aid of a nasty little device called a central bank.

In the US the Federal Reserve Bank was founded in 1913 to help stabilise the economy. There had been a decade of violently gyrating values and a couple of nasty encounters with bankruptcy. However, the dollar had roughly maintained is value throughout the previous century. Now, 100 years later a 1912 dollar is worth 3 cents. If a bank had handled my investments in such an appalling fashion I wouldn’t sack the directors, I’d lynch them.

But, there is a corollary to this.

Americans are a hell of a lot better off in 2012 than they were in 1912. Since their currency has crashed so spectacularly, how is this?

Another point: not only has the $ and the £ crashed in value, but so has just about every other currency. If only one currency had crashed that would be a serious state of affairs for that country, but with everyone in the same boat, does it matter?

Okay, France is in a similar state. It’s currency has fallen and fallen in value over the years, and now it’s banking system is in disarray. France is technically bankrupt. Frightful amounts of money are owed to its banks by the Greeks the Italians and the Spanish. The banks aren’t going to get that money back. Or are they?

Let’s leave this discourse on a cliffhanger. Answer next week.


The Landes

We drove south from La Vienne, down the A10 to Bordeaux, and then onto the old N10 where it cuts a swathe through the pines in the Landes.

This is an unusual area, with very few towns, and villages hidden in among the trees. There is a long coastline of dunes stretching from Arcachon right down to the Spanish border. Mostly these dunes are deserted, except for a couple of months in high summer when they are deluged with bodies soaking up the sun.

Holiday beach in the Landes

Inland are the pines interspersed with hardwood forest and a few fields. The main industry in the Landes is logging and the production of charcoal. The villages sleep their way through the year to burst into activity during August, when you can hardly move along the roads for walkers, cyclists, and a line of cars making for the nearest campsite and beach.

Chalet in the Landes

We stayed in the charming little village of Mazos. There is a late medieval church built to withstand a siege, with a charming wooden spiral staircase up to the belfry. There is the only shop for miles, and a huddle of houses. Opposite the church is a restaurant where you can collapse under spreading trees to savour a rather nice cuisine as the evening gradually gets cooler.

Chalet in the Landes

Living in the Landes presents you with a different way of life. You are secluded, you are almost cut off from the rest of the bustling world. It’s a major operation to get into the nearest town. You can walk, dream, commune with nature, and maybe make a few euros every summer by renting out the spare room to a deluge of tourists.

La Vienne

South to La Vienne

South of Tours the road climbs a steep hill, and at the top is a large industrial estate. There are several cheap hotels hidden away at the back of the retail outlets, but they are not easy to find, but they usually have rooms to let when all else fails.

The Bridge at Vienne

It’s so much nicer to drive that little bit further to the delightful town of Montbazon on the River Indre, The square is small, but then so is the town. But the trattoire is certainly worth a stop, and so is the patisserie next door. You can while away an hour visiting the 9th century donjon if that turns you on, or follow the river downstream through delightful woodland.

And then you are over the border into La Vienne. Properties here are reasonably priced. The climate is good, warmer than England, yet with plenty of rain to make the world look green and pleasant. You aren’t far from the sea. The rivers are fun and picturesque, and the things you can do are legion.



You’ve got the Futuroscope just north of Poitiers, this is a futuristic city which is part working business park, and part modernistic extravaganza. I’ve only wandered around the outside so I dont know anything about the wonders within. I’ve promised myself to go and spend a couple of weeks in the region specially to visit all these places next spring.




Then there are the various animal sanctuaries. There’s Crocodile Planet, Monkey Valley, and Snake Island. There are the pigmy Bonobos from the Congo, only discovered in 1929. There are chimps, marmosets, and capuchins all running free.

Crocodile Planet is set under a glass dome with 100 plants and 200 animals from crocs, to alligators to caymans. Snake Island is home to 250 reptiles; and in the ruins of Chauvigny’s chateau there are eagles, vultures, falcons, and more.

There’s horse riding, canoeing, cycling, and pretty well anything available. Once again, this is a great place to open any kind of holiday venture from hotel to gite. There are nature trails, and the latest gimmick, tree walks.

And if that doesn’t interest you, there are the various forays into the past re-enacted as spectacles at several of the local historical venues: A medieval fair in the village of Chateau-Larcher; knights’ tournaments at Nouaillé-Maupertuis, and many more.

Montmorillon specialises in bookshops, with thirteen in the middle of the old town dedicated to various genres. There are also paper, typing, printing and calculating shows at the various museums.

There are Michelin starred restaurants in Poitiers, and vineyards galore that date back to Roman times; so how about agneau du Poitou, or Belle de Briande.

I am particularly drawn to the ancient city of Poitiers, because it was the home, and power-base of my favourite heroine, Eleanor of Acquitaine. The old quarter, half-timbered, is fascinating with its medieval squares and clock towers. There are also the amazing romanesque ceiling frescoes in the eleventh century Saint Savin Abbey church

Chauvigny is one of France’s most complete medieval cities dating back to the fifteenth century, with fortresses, romanesque churches, and a maze of old streets hugging a rocky spur overlooking the river Vienne.

Good grief, I give up. If you want to live in France you’d be hard put to find a more interesting and charming place to live, and make money on the side. My latest members’ bulletin on the Unique Property Site gives a short list of some interesting places to buy at reasonable prices.

Next week, pretty well worn out with all there is to see, I shall move further south and venture deep into the “unknown”. You’ll see why I use quotation marks when I load the article.


France Loire

The Loire Valley is known as the Garden of France. But that’s not all. Let’s have a look at the plusses there are for this region.

1    It’s beautiful, with a very attractive river-scape, pretty villages, and ancient historical towns. This is la belle france at its best.

2    It’s famous for it’s chateaux. There seem to be hundreds of them, from the small and charming, to the massive and downright ostentatious.

3    There are masses of things to do, from walking holidays, fishing in the countless lakes in the region, visiting the major aquarium near Amboise, visiting the chateaux, and watching the various son et lumiere spectacles, and getting stuck into some excellent cuisine. All of this makes this part of France ideal not only for somewhere to live because there is so much to do, but as an ideal place to run a small guest house, as during the summer you will always be full.

4    Not only is this region beautiful and busy, but it is also close to Paris, Orleans, the amazing medieval glass in Bourges cathedral, the wines of Vouvray, Chinon, Saumur, and more, and also just a whisker away from the Vienne which is also an amazing place to stay.

5    The weather is similar to that of Southern England, only better, with hotter, longer summers.

6    From Southern England you can easily drive here in a day. The TGV goes to Tours, and there are flights to Poitiers using RyanAir.

If you fancy buying a genuine chateau there are several for sale. I list a few in the current members’ bulletin.

If that is too grand or too expensive, there are plenty of bourgeois homes for sale. But what is really interesting is that there are plenty of cheap ruins for renovation, or barns for conversion, with prices starting at about £15,000.

I’ve decided I’m going to have a fortnight’s holiday here next year in the spring. I really like it. I’m sure you will too. Just for the record, we stopped on spec at many places along the route and only managed to find one place to stay, and then one of us had to sleep on the floor.

I think this is a good place to be. I dont think you could go far wrong investing here. Check it out.

Loire Valley

I have just returned home from a short trip across western Europe. I have been saying that there are all sorts of places where buying property would be a disaster. Yet there are small pockets of interest which would repay a closer examination.

I am going to concentrate on France and Spain in the next few bulletins.

First, a warning. France is both politically and economically on the edge of a volcano. It is one of the top ten economies in the world, roughly on a par with the UK. It is a socialist country with massive government control and interference in all aspects of life. It is also becoming less and less able to juggle all the governmental aspects of life, and the financing of this great behemoth is becoming untenable. This means that over the next few decades it is likely that socialism will be dismantled in part as unsustainable.

There is also the problem of irresponsible bank lending. France is seriously at risk from the cross lending of banks and is likely to suffer as a result. The largest French bank is insolvent, and if the banking system was allowed to unwind in the normal way the whole system would collapse.

That is what ought to happen if the principles of capitalism were allowed to run their course, but that will not happen in a socialist country. The banks will be protected, and the tax payers will suffer for years as a result, and the economic life will be strangled. Those who made serious mistakes will be protected, and the whole country will be made to pay for the mistakes of a few. That’s the more unpleasant face of socialism: collective guilt, collective protection, but the suckers at the bottom all pay.

What this means is that France will not be a great place to do business over the next decade or so. However, life does go on, and I’m not sure that anywhere in Europe will be great for business in the near or medium term.

Having said that, there are still great places to live.

I am very impressed with the Loire Valley. There are several reasons why, and I have a few suggestions to make. I’ll list those reasons in the next bulletin.

Investing in France

Hello Shirley, and everyone else…… but Shirley asked for this one. But several of you have an interest in France, so here goes.

“What do you think about France?” she asks. Hey, that’s a difficult one. France is a bit of an enigma. In a sense the French run an unsupportable economic model. Socialism works when there is spare cash about. It goes down the pan rather fast when the money runs out. As the dreadful Mrs T used to say: “socialism is fine until you run out of other people’s money”. France has run out of other people’s money, so what’s next?

French banks are on the hook for rather a lot of Greek debt ($75 billion). They are on the hook for even more Italian debt ($511 billion). And how much is owed by Spain? $220 billion. And Portugal, that other disaster zone, owes $45 billion. In short, you have a French banking crisis.

The French were particularly keen on a Greek bailout. If they hadn’t been so insistent I dont think there would have been a bailout. Why were they so keen? I suspect they are looking at a possible hitch further down the line with Italy. Contain Greece, and maybe Italy will survive. I, like most commentators, dont see any possibility of containment. This is going to spread. Pull down one pin, and it knocks over the rest.

It’s all a terrible mess, and very complicated. Things will be better with a lower euro. Europe was getting very expensive. France is a tourist country. It needs a lower currency. That will be good. It unfortunately means that in international terms any assets you have in France will be worth less, but then you’d be hard put to have assets anywhere that aren’t losing value at the moment.

You need to be quick on your feet to make money these days. Houses are slow moving objects.

One thing now has to be considered. Is the euro going to survive in its present form? A lot of commentators take the view that the currency is deeply flawed. As I mentioned in another blog, the notes are just pieces of paper. There is not even the pretense that they are issued by any competent authority or backed by anything. The currency is held up by political will. In today’s kill or be killed markets that is not worth much.

I cant see the euro going out of existence. Too many people use it and need to use it. But it is heading for very hard times. I would not invest in anything euro based until we can see a bottom.

So, what’s the question?

I am already invested in France, should I do a runner?

No, stay put. France will survive. Anyway, where would you run to?

I’m thinking of investing in France instead of some other euro-zone country.

I wouldn’t invest in any euro-zone country while things are this shaky. I dont know what I’d invest in. I still like Brazil, but I certainly dont like what happened last week, when two Brazilian bond auctions failed. You could do worse than invest in solid Indian companies. India always seems to survive disasters. I dont have the knowledge to suggest what to buy, but I suspect it could be the safest place to put your money.

I’m currently invested in the UK, would France be a better option?

I can think of a dozen reasons to say ‘yes’, and a dozen reasons to say ‘no’. Ha ha. That’s a lot of help! One thing does keep nagging at the back of my mind. The French have had three different currencies in my lifetime. They default rather a lot, even if one of the most spectacular defaults was partly due to someone from north of the Channel. (If you are interested in these things, look up John Law when you have a moment to spare and fancy a good read.)

I am not aware that the British government has defaulted since reliable historical records have existed. That has to count for something. There have been a couple of close calls. But sterling as an adjective still applies to the currency. I suspect the British economy is too large and too well organised for a government to completely destroy. It’s the British government that is broke, not the British economy.

I hope that helps. If it doesn’t, and you have a specific question, try me.


Keeping a foot in the old country

3    Should those moving abroad keep a leg in the home country?

This is the third part of my blog on moving to France (or anywhere abroad).

I deal with this question in my book on property investment, which you can buy online from the Unique site. (

Let me go back to my own experience here in Portugal. I am witnessing a mass return to northern Europe by the English, the Germans, and the Danes. Basically, it is difficult for people used to a high standard of living to make the grade in Southern Europe. You have to take a big drop in income. You get a more relaxed way of life (that is, if you dont live in the Costa del Sol megalopolis), and everything is more local. But that does mean you tend to find the more modern inventions dont actually make it to your doorstep for some time.

I am also finding that older folks are increasingly worried about medical matters. Some medical deals seem to be much better abroad. Others seem to be much worse. I can’t discern a pattern.

Older folks are also more and more concerned about not seeing the grandchildren, and miss their friends. You need to be able to make friends easily. That can be difficult when the culture is different, and you are not fluent in the local language. Dealing with the local authorities is also a bit fraught when you cant gabble off the correct legal language. The minute you start to fumble you start to lose authority, and the other fellow immediately has the advantage.

There is also the matter of relative property prices. If you should ever want to return you could find that the prices in one country have moved so far out of wack with the other that you cant afford to go back. If you keep a property in the UK, then you have to rent it out, which does at least produce you an income stream, but you have to manage the place in absentia.

The other problem is, especially if you are a pensioner, or are approaching pension age, the matter of a problem caused by a drop in the value of the currency in which your pension is paid. When I first came to live in Portugal the exchange rate was €1.50 to the £. It is now €1.25. That is one heck of a drop. A drop of that magnitude puts extreme pressure on your standard of living. On the other hand that means the value of your European home goes up compared to assets kept in the UK. Countering that, however, it means you can probably forget selling your now more expensive home to the English. You will need to think about selling to locals, or at the very least, to people from the euro zone.

Since writing the above the euro has started to nose-dive. Now, of course, things start looking different. It now means your house in the eurozone is cheaper for the Brits to buy, so more folks can actually make an offer. On the other hand you will be putting less euros in your pocket after a sale, and if they have to go towards buying a place back in the UK, then you are in trouble again.

So, do you keep a place in the UK and rent it out? That’s a difficult one. How do you keep an eye on the place when you live 1000 miles away?

It’s taken me a long time to get round to saying that I cant answer the question. However, with those points on the table, maybe you can.

Buy land for food

This is part two of my reply to a question about moving to rural France.

2    What is going to happen to food prices? They are going to rise.

First: a bit of school stuff. Malthus, as you all remember from school days, (alright, I know, you were mucking about during history) said that populations always outgrow their ability to sustain themselves. The counter view is that technology always advances sufficiently to counteract that tendency.

So far technology has been kind to us. The combustion engine brought us tractors and a major advance in mechanisation. The technology used in industry brought us further advances in ploughs, threshing machines, etc, and a totally different infrastructure. Then there were the advances in biology; what came to be known as the Green Revolution of the sixties, which raised crop yields quite phenomenally.

However, it is difficult to see where the next revolution is likely to come from. There is nothing on the horizon. In fact, we seem to be edging towards a reversal of things. The more you want to get out of the ground the more you have to put in. Nowadays to keep yields up farmers have to dump vast quantities of fertilizers into the ground. These are made from products that are getting more and more expensive, and so the input costs of food production are rising.

We also have a rising population. We are rapidly approaching crisis conditions. In fact, I suspect we have already reached crisis. Let’s have a look at a few simple facts.

The world population of human beings was 1 billion in 1800. It took till about 1930 for that figure to double. It only took forty years for the next billion to be added. Since then the population of the world has more than doubled. Quite clearly this trend cannot continue without reaching a complete breakdown within a decade or so.

We are told by people who are obviously certifiable that we need more people to support us in our old age. Well, let’s look at another set of figures. The world food production is rising by less than 1% a year. World population is rising by over 10%. Do you really need me to tell you what is going to happen to food prices?

There are two choices. Prices rise, quite considerably. Alternatively more people are going to have to starve.

Already there have been food riots in twenty countries around the globe. Already basic food stuffs have been taken out of the world market. More and more countries are choosing to ban the export of basic food stuffs and basic commodities. Rice stocks are being hoarded by the rice producing nations. That means, quite simply that both alternatives come about. Those who have the money pay more, so prices rise. Those who cant pay more, starve.

It does not help that the US government subsidizes the cost of ethanol, thus encouraging more corn to be diverted from food for people into food for cars. Expect the price of bread and beer to keep rising.

What we have here in terms of food is a very simple situation. Because we started from a low population base the theories of Malthus seemed ill-founded. In 1800 there were a billion of us. We had medieval technology. By 1900 we had considerable mechanisation and not yet two billion of us on the planet. By 1970 there were three billion of us, but we had then had the green revolution. We have since had a doubling of the population and no further technological advance. In short we have a convergence here. The world’s population is growing seriously faster than technology can cope with. The theories of Malthus now look as if they are about to be proved within the next decade or so.

Okay, the food situation is heading for chaos. But what about water? We have a serious water shortage. Odd, since most of the planet is covered with water, and most of it is a mile or more deep. But salt water wrecks the human body, and you cant live on it. Like a lot of things, there is probably enough water, but it isn’t where it’s needed.

It is easy for somewhere like Gibraltar, that has no water, to import it from Norway. But China cant do that. More than half the large cities in China are operating with unclean water. The Gobi desert is lurching towards Beijing at a breakneck pace. I understand that northern China loses an area the size of the state of Maryland every year to the encroaching desert.

In short, you cant go on increasing the world population while the usable landmass is decreasing, the cost of farming is rising, and technologies are producing lower yields. Please note that GM is not the answer as the average yield using GM crops is down 7%. To compensate, there is less loss of crop due to insect ravages. The net situation equals about a 1% increase in recoverable crop.

I am not selling my few hectares of land with a stream running thru it. I will continue to have a home where there is a small population, with plenty of usable land, and a good climate for growing things, and plenty of water. I honestly think urban life is going to get a lot more expensive over the next decade. And I think we are going to be forced to focus a lot more on the important things in life, such as survival.