Auction Prices

I’ve been receiving several bulletins telling me about the state of the UK property market. The general view is doom and gloom. Prices are going to tank with a vengeance. Apparently we can expect a 25-30% drop sometime over the course of the next year or so.

This is an interesting view of the market. In theory prices ought to be dropping more, but during a recession people dont tend to move around so much so the market is quieter. It’s not that prices drop, they simply stagnate because not much is going on. You have to have an active market for prices to rise. You also have to have an active market for prices to fall. Prices will only fall when interest rates rise. Then the buy-to-let mob will be squeezed, and there will be a rush for the exits. That’s when prices will tank.

Those who want bargains will then sit back and smirk for a couple of years, and then go out and buy. But I’ll let you know when the time is right. We aren’t there yet.

Meanwhile I did promise a couple of weeks back that I would do a quick calculation on the auction index to see whether I thought prices in the real market place (by that I mean where money has changed hands, rather than prices asked) were still above where they should be.

My conclusion is that prices are seen to be too high by the general public, and there is undoubted price resistance.

The index should read somewhere between 11-20 to indicate a normal market. Anything above 20 represents an expensive market. Anything above 30 represents ridiculously high prices which are unaffordable.

The average across the country for July came in at just over 22, so prices are, in general, slightly higher than perhaps they should be in a normal market. Given that we are in a depression prices are too high. Those figures do include an insane figure from the Bristol area of 42.85, and one anomaly in the South of 0.

The most reliable figure is for the North of England where I used the most results. The overall average was 28.36, which is very high. Prices obviously have to come down from these levels.

The lowest reading was in East Anglia where I found a figure of 11.76, which is about where I would expect it to be for the kind of economic situation we are currently in.

If I am right and rents begin to waver and fall by the middle of next year, we will have the scene set for a resumption of house prices drifting down. However, as we have a largely stalled market, I dont think the falls will be great. Prices will only begin to fall seriously when interest rates go up. That could be some time yet as the whole fragile mess of the world banking system is only held in place by low interest rates

Unfortunately low interest rates stifle business, as it becomes uneconomic to lend money; and in a capitalist system, without credit, enterprises dont get off the ground, and economic life just stagnates.

Almost all economies are now managed economies, and they are managed for political not economic ends. That means the mess goes on. That also probably means interest rates will stay low all next year and maybe the year after. We only get a crash when they go up.

Meanwhile, prices in the eurozone seem to be holding, although the euro itself is not. Expect more falls against other currencies as it hits more head winds. The trouble is, Europe is the UK’s biggest trading partner, so any fall in the euro will affect the economic life of the UK, and that will also act as a drag on sterling.

Now isn’t the time to be looking for bargains. They simply aren’t there.


Unique Property Bulletins

The latest members’ bulletin on the Unique Property site lists some interesting items, but what really interests me is the way prices have come down for certain types of property.

I have over the years been featuring barns for conversion in Wales. I dont know why it is, but there seem to be more barns west of Oxford than there are to the east. For a while Devon was riddled with barns for conversion, and the number turned into an avalanche after the last foot-and-mouth scare. There are still barns available in Wales. The trouble is I think they are going to be available for a long time as they are priced well over the odds.

Some of the barns available in Wales cost £200,000 in their unconverted state. That is a ridiculous price. Compare that with a barn in Kent with a massive roof that looks to be in pretty good condition which is on the market with a guide price between £50,000 – £70,000.

There used to be a shortage of woodlands for sale, but that has also changed. There are woods for sale in the south all the time, and once again, prices are keen. A small site of approximately one hectare, again in Kent, is up for auction with a guide price of around £10,000.

There is even a double available. Half an acre of woodland with a barn shelter which might be developable.

Churches are on the market in ever growing numbers. When I first started the Unique property site there weren’t that many churches for sale. In fact, back then, everyone wanted a church they could convert into a home. Now the churches for sale are those that have already been converted. However, there is a rather nice Methodist chapel in Kent that is for sale at a very reasonable price. It looks rather nice, with some nice timbered beams, and would make a lovely home.

I am constantly being told that prices are still rising in London and the South-East but I cant see the evidence. In fact the latest Unique bulletin shows just the opposite. I think it is time I dusted off the old Auction Index to see how things are going. I suspect we may find that prices are at last sagging their way to a more affordable level. I’ll keep you posted.


Cheap Property for Sale

Cheap Property for Sale

Everybody wants cheap housing at the moment, so where is it?

First, let’s have a look at the regions.

In the North-East one of the cheapest areas is south of the Tyne, with Sunderland coming in pretty cheap.

On the other hand, if we come further south to the East Midlands the cheapest area is apparently the City of Nottingham. Everywhere else nearby is significantly more expensive.

Cheaper still is the North-West with Blackburn apparently the cheapest area.

Wales is cheaper still, but if we then move east into the West Midlands prices move up again, where they are slightly more expensive than the North-West.

Humberside has come up in the world with prices similar to those of the West Midlands.

I am skeptical of these figures. They certainly dont compare with what I see on a daily basis. That is borne out quite obviously when we come to East England. Maybe the prices in Peterborough are well up on most of the previously mentioned regions, but throughout East Anglia house prices are static, or dropping, and they do not represent value for money.

One of the big problems with all these figures is that they have to relate to something. Most people think I’m being silly when I say that the most important concept in maths is the equals sign. But when it comes to valuing something, money has no value on its own. It only has value as a means of exchange, in short, to get a deal, you have to have both sides happy with the equation. The equals sign is what joins the two sides. If there are inequalities then you dont have a deal..

So if there is not much well paid work in a region then there are not the pay packets to justify high house prices. In places such as East Anglia you also have large distances between big centres so that travel to work is expensive. With the current price of petrol that counts. Translated into simple maths that comes out as [not much money = low house prices].

As we come further south prices go up. However, that is not the whole of the story. The cheapest flats in the country are listed as being in Wales. The cheapest terraced houses are also listed in Wales. That of course is rubbish. There are terraced houses all across the north of the country with prices barely above £50,000, and such houses can be picked up for £30,000 without much trouble. And if the cheapest price of a terraced house in Rotherham is £69,000 then all I can say is someone isn’t looking.

These stats are not just wrong, they are plain silly. If you want cheap housing it can be found, but at a price represented in other ways. You wont find much well paid work about, or indeed much work at all, in cheap areas. Lincolnshire remains cheap, so does East Anglia. Wales is far more expensive than it should be. You can buy a derelict barn for £200,000. That’s insane for Wales.

Meanwhile there are bargains all over the place. You just need to be patient and to be clued up to the auction situation. I shall be looking into cheap deals in the auction market over the next few months. I may even start a cheap-as-chips section to the Unique Property Site. We’ll see how things turn out.

In the meantime I still maintain one of the cheapest ways into the housing market is to buy a de-commissioned pub, especially in the North-West. Some of these pubs have three-bed accommodation above, and some even have six bed flats upstairs. That means the pub could turn into a very big house or four reasonably sized flats. It’s a good way into the housing market and your pension at the same time.

In the last few months there have been several pubs advertised through the Unique Property Site at figures below £100,000. Many could have been turned into four flats. Even if you spent £10,000 per flat you could end up with four dwellings for less than £140,000 or £35,000 a flat (that’s cheaper than a flat in Merthyr Tydfil which is supposedly the cheapest area in the UK). You can live in one and rent the other three. After 25 years the mortgage is paid (by your tenants) and you have the equivalent of £1,500 a month coming in to live on.

In the meantime I will check out the bottom end of the market and get back to you.




The latest craze in Spanish property is the development of Murcia. Traditionally, this region of Spain has had a very low profile. It is the one region of Spain that other Spaniards tend to forget exists. It is not part of a larger grouping. It isn’t part of Andalucia, or indeed any of the other more well known departments. It also has a feel about it that is different from any of the other regions.

It has a very small coastal zone which they call the Costa Calida, or the Warm Coast, and there is an arm of land curving round in a crescent and sheltering a stretch of sea that is more like a lagoon and is called the Mar Menor (the little sea). The region is not well known, but it is getting built up like the rest of Spain’s Mediterranean coast. However, the guts of Murcia are the inland areas.

Traditionally it has been a very fertile vegetable and fruit growing region, and the whole of the flat plain that stretches from the sea due west is laid to truck farming. You drop down from the mountains that act as the boundary between Murcia and Andalucia, and you can see almost all the way to the coast across this vast plain.

Up in the mountains there is snow often beyond easter. When we drove through the area a week or so before easter earlier this year there was a scattering of snow all along the main highway, with great swathes of it covering the flanks of the peaks to the south and east.

In that respect Murcia is a miniature Spain all to itself. One is reminded of that little phrase Quien dice España dice todo, which means, he who speaks of Spain, speaks of everything. From snowy peak to warm sea; from rock to rich black loam; from backwoods shacks to glass and concrete high tech skyscrapers.

Like most Spanish cities, the town of Murcia is very modern. The building has been growing apace over the decades, and the town is ten times the size it was when I first wandered through here in the dark sleepy sixties.

But things are stirring in other ways. Paramount Pictures has chosen the region of Murcia for the construction of a new theme park and entertainment complex in Spain.

The theme park will take four years to construct and will open in 2015. It is to be built on 108 acres of land in Alhama de Murcia just 20 minutes from the new international airport at Corvera which supposedly opens in 2012, and 20 minutes from the beaches of the Mediterranean and the Mar Menor.

The first area called “City Adventure” will include three major attractions. One of them will be based on the film Titanic and will feature a huge reproduction of the ocean liner. This area will also host one of three roller coasters to be built in the park based on “The Italian Job” and a virtual reality feature entitled “Mission Impossible”.

The second area, “Lost Valley”, will feature a water ride recreating a trip down the Congo river along with a recreation of the crypt from Tomb Raider and a rollercoaster based on the legend of Beowulf.

Especially designed for children is the “Woodland Fantasy” area. A more tranquil offering, dominated by a large tree and featuring magic workshops and interactive adventures including one based on the “Spiderwick Chronicles”.

Plaza Futura is the cutting edge technology area which will feature Star Trek and a spectacular recreation of “War of the Worlds”. Not for the faint hearted this area will feature a passage of terror based on the feature film “Paranormal Activity”.

The centerpiece of the park will be an avenue flanked by hotels, restaurants and a shopping centre with a pavilion focusing on the attractions of the region of Murcia and Spain.

Over one billion Euros is to be invested in the park which will employ in excess of 10,000 people during the course of construction. The park will also contain an auditorium with capacity for 15,000 people and the largest convention centre in the region of Murcia capable of accommodating over 3,000 people in its main hall.

Great things to come, and this will obviously pull in the crowds. However, to the north of the city there is an interesting culture. It’s quite fascinating to look down on the broad growing zones from the hilltops, or from a low flying aircraft. At easter the countryside looks like some college scarf unrolled across the ground. You have the different colours of the crops coming into flower. There are the different coloured blossoms of the fruit trees. There is a wide swathe of red, then a swathe of white, then pink, then cerise, as almond changes to plum, to greengage, and so on.

And then there are the wines. They used to be pretty average, and not well known. However, things have changed quite drastically since I first stopped at a bodega on main street Jumilla. Back then I filled my goatskin with the local red, and it was a pretty nondescript drink which suited me well, but certainly had no class or finesse to it.

Some of the old styles still persist here, and one of the reds is still made in the traditional style. It is most definitely an acquired taste. I find it has a kind of mouldy taste to it. Apparently the younger folk in the area dont like it that much either. It is drunk mainly by the older people, who give it a special term which is not usually used in wine parlance – rancid. They dont mean it is going rotten, but that it has a slightly “off” flavour. Most definitely an acquired taste.

Move to the more modern vintages and the quality of the wines is in my opinion very good indeed. There is a clean sweet white wine which I was drinking only the other day. Curiously it is made from red grapes. Unlike so many white sweet wines it is not sickly or mucky in the mouth, but has a clean tang to the sweetness. I have several bottles in my cellar at the moment, but unfortunately I dont have my tasting notes from the rest of the wines I tasted on my last visit to that big bodega on main street. What I can say is that if you are a wine buff then this dusty country town with a definite hick feel to it is a place you should mark in red on your travel map.

Then you should journey north through a veritable Mondrian of orchard colours, pretty in spring, and delicious in summer.

I am beginning to get a taste for Murcia after all these years. I shan’t be settling here, but I will jump at the chance to visit again. It’s also a cheap neck of the woods. The coast is cheap nowadays with the sea-view business firmly lodged in crisis mode, but the countryside has always been cheap.

I also noted that this region is embracing the crisis in useful ways. Town after town has restaurants boasting not just the menu del dia, and the tasting menu, but also a super cheap (7 euros a three course meal with drink) menu crisis. I haven’t tried one, but if the meals back out in the wilds of the valleys in the north of Cadiz are anything to go by you cant go wrong.


Property Markets-2

Property Markets

Let’s start part two of this Property Market update with some figures.

In the first place I keep saying that rental costs and mortgage costs are roughly in equilibrium in the UK which means house prices are not about to collapse. That means, in the short term, house prices will remain roughly where they are. By short term I mean less than eighteen months.

On the other hand, if wages relative to inflation keep falling, then less money will be available for housing costs, and rents will come under pressure. That pressure may well start to show itself next year.

If rents come down, mortgage costs will start to look expensive. That will put pressure on house prices. If interest rates rise that will put more pressure on house prices. The medium term outlook therefore for house prices is for them to fall. By medium term I mean anything from 1-3 years.

The long term? Oh come on. Dont ask silly questions. Armageddon; the fairy Tinkabel arrives; take your pick.

Long term is a bit dubious owing to the fact that there are about 4,000,000 interest-only mortgages out there in the UK, As it happens, I have one myself. When the term is up (admittedly some considerable number of years away) what am I and my fellow unit holders planning to do? Redeem the darn thing? I should coco. We will all have to roll it over. And what terms will we be offered? At least my interest only mortgage represents less than 30% of the value of the house. In fifteen years time I hope it will represent quite a bit less. On the other hand, how many out there will be hovering close to the actual fire sale value of the house? Nasty!

According to figures published by various organisations the average buy to let (B2L) investor is getting between 4.5% and 7% gross return. Let’s say the general average is therefore 5.5%. If that’s gross then you have to take off insurance, maintenance, breakages, etc. The Inland Revenue, not noted for its generosity, allows 10% to cover all this. Hold on, if you are only getting a 5.5% return on the investment before taking off 10% for expenses………

Yikes, these guys are running on empty. Now what happens when the Bank of England raises interest rates by 1%? Suddenly you have several million mortgage holders going bust at a rather nippy rate of knots. What’s that going to do to the housing market?

Anyone looking to start a business in buy to let needs to take a course in therapy first.

But interest rates aren’t going to rise any time soon, are they? In fact, there is talk of lowering them still further.

Hmmm. Let’s move forward to 2014. Isn’t that when the Bank of England next needs to do some serious refinancing? If the UK is still limping pretty badly this time next year there is a serious risk that the UK will lose its AAA credit rating. That will put a nasty dent in the low interest rate scenario. It could very well lead to the UK having to raise interest rates to at least 1%. That’s enough to do damage to property businesses that are already running at next to no profit. That would lead to at least the worst B2L businesses selling up, which will naturally lead to more downward pressure on house prices.

We already have few first time buyers in the market. If the B2L buyers dry up, and instead become net sellers, then we have nothing driving the bottom end of the market.

With prices continuing to fall the whole scenario of 90% mortgages will also dry up. What sensible business is going to offer 90% finance on a commodity that is losing value by even 5% a year? In twenty-five months the deal will have gone negative.

90% mortgages are likely to disappear if things continue the way they are. The industry is looking at mortgages ranging between 50%-80%. That’s going to seriously impact on the number of buyers.

If the situation develops along those lines you are looking at a serious house price collapse.

Those of us who bought back in the early nineties dont care. We bought cheap. Our mortgages cost us peanuts, and the rent is still coming in. Even if rents drop 20% and mortgage costs double I still have a comfortable business model. But how many people bought property when I first put out my book on buy to let in 1993?

Nobody asks me to join any think tanks on this problem, but here is a thought.

The banks are going to have to set up some kind of arms-length businesses which will buy repossessed properties, and rent them out bringing in an income to service the debt that has built up on the under-water mortgages. I dont know how this would be affected by the regulations they are bound by, but I’m sure a very simple business situation could be legitimately set up to deal with the huge load of non-performing mortgages. I’ve even got a snappy little name for the new scheme: Rent to Redeem. Is that going to be the next property fad?

As you can see things are set to get much worse. After all, you simply cant have a situation where no-one’s making any money out of the real estate on which the country depends for its wealth. The UK no longer exports to the world. We have to rely on some sort of intrinsic wealth. If that is leaking away, we are all in big trouble.

Next week I’ll cast a gloomy eye on some other countries.


Real Estate Update-1

Real Estate Update-1

We are halfway through the year. How are things turning out?

I said at the end of last year that I expected house prices in the UK to stay much the same, or drop about 5%. So far, that’s how things are going. I dont envisage any change over the next six months.

I said that prices in Spain would drop between 10% and 15%. Once again that is what has happened. It’s happened slightly quicker than I expected, but that pattern will continue. Those of you who read all my stuff will know that I expect the price of an average 2/3 bed flat on the Spanish coasts or the Algarve to stabilise at prices in the €60-70k zone. Anyone paying more than that is throwing money away. I have noted that prices have already dropped to €75k for two bed flats in some of the tourist destinations. We still have a way to go.

I have also suggested that there has been a change in buying habits and I expect a severe contraction in the holiday home market in Europe. I dont think the retirement home market will change, but holiday homes have become a liability rather than an asset. It’s a market that is over.

I said I had no idea how the euro situation would pan out, and I still dont know, except that I did foresee politicians hanging it out (kicking the can down the road — extend and pretend — or whatever terms you prefer). That is how things are going. How long this mucking about can go on I still dont know, maybe another year, maybe more, who knows.

One thing is clear, things are not getting better, they are getting worse.

At the end of last year there were rumblings that Italy’s largest bank was on the verge of collapse. It’s been propped up, sort of. There have been worries that France is bankrupt, and Spain is too. However you look at it the whole thing is a total mess. That is not a good basis on which to do business across frontiers, or to get involved in property dealings.

The UK is no better off. The country’s debt equals its entire annual output. That’s suicidal. The traditional view is that once the figure goes above 90% you are on the road of no return. Maybe the country can work its way out of the mess. Unfortunately, the trading partners on whom we depend are broke. You cant increase sales to people who have no money. That spells a long period of languishing economic patterns. We are dependent upon the people using that pesky currency the euro, and the euro is losing value on a daily basis. As it loses value so the UK loses export cash, and so the £ looks more and more frail. In this situation we all go down together.

Let me go back a bit. The average boom period for the UK property market is about seven years. The average hiccup period is about 2/3 years. The average full-on property crash lasts 7-10 years. This situation is worse than that, thus we are looking at more than ten years to get things back on track. At one stage I suggested 2015-2020 as a likely period for the return of a positive housing market in the UK. That’s a guess and so isn’t worth much, but if asked to guess now I would say that is looking increasingly optimistic. A return to the good times much before the end of this decade is unlikely.

Let’s have a look at some simple maths. You all know I love trying to make figures stack up.

Because of the abnormally low interest rates set by central banks across the world, savers are having a hard time. That means money is being taken out of banks and put into other areas to get better returns. That is causing bank assets to drop drastically at the same time that their securities (mainly real estate) are losing value. That means the whole banking system is on skid row.

Remember we live in a capitalist society which rests upon a solid banking system. That means our whole economic way of life is threatened. That is not an academic matter, it’s serious.

The entire developed world’s banking system and currencies are flying by the seat of their pants. Put another way, we have no security of value anywhere in the western monetary system. We are all betting blind. It’s fun late at night playing contract whist and bidding blind, but it isn’t much of a way to win tricks.

I cant possibly deal with this whole question in one short blog, so next week I shall bombard you with a whole list of frightful figures. I dont want to frighten you, but as I never tire of saying, the bad news is more important than the good news. If you have the bad news you can at least prepare yourself.


Paris -2


We were supposed to be visiting the Eiffel Tower at night so we could see it lit up. That went also for the Flame of Liberty, a copy of which became the Statue of Liberty in New York Harbour.

It’s a long time since I went up the tower, and surprisingly it seemed bigger this time round. It does look impressive with all the lights ablaze, and even more so when they flash on and off, and the crowd bursts into applause as the lights run up the metalwork.

It’s a lot of steps. And then we’d only arrived at the first balcony. To be quite honest the view isn’t much better the higher you get. Paris is largely a low level city.

It’s a lot more steps up to the second balcony. For those who are clapped out at this stage there is a lift, if you’ve previously taken the precaution of paying for it and have the requisite ticket. Good luck.

It took us over an hour to get back down again because the girls refused to use the steps, and millions of us queuing for the lift down was not fun. By the time we hit the metro the darned thing had closed so we had to flag a taxi home, and arrived back at quarter to two.

Now you know why last week’s bulletin was a bit delayed.

The bridge of locks is back close to Notre Dame.

We tried to see the Flame of Freedom the following day, but it was dreary and misty. Also, lunch was a bit disappointing because I couldn’t find a restaurant selling a meal of frog legs. Somehow a KFC isn’t quite the right alternative.

Next week I shall be back in my beloved Spain, travelling through that largely unknown area of Murcia, and getting stuck into some serious wine tasting.

Paris -1


I’ve just got back from a jaunt around Paris and the Pas de Calais. I was taking two teenage girls to see the delights of France, and they walked me off my feet.

I must admit to finding their view of life to be frighteningly different from mine. When I was a kid we made fun of the typical American tour, which maybe took in six capital cities in a week. I remember a couple of comedy sketches about that particular phenomenon.

“And there coming up on the left is Florence. That’s Florence in Italy…… Yes ma’am, we crossed over into Italy last night….. You didn’t notice? That’s because it was dark madam. And now we are heading for the capital city of Rome. Florence? Oh, that was back there. You missed it.” And so on.

It seems that’s no longer funny, that is how things are. When I was a kid we used to go to Stonehenge and the girls dressed as white witches, and we had mystic rituals on the sacred stones. Now you walk round the outside close to the barbed wire and take photographs to prove you’ve been. Stonehenge? Nowadays it’s just a photo. We used the place for its original purpose. Life has changed.

The girls had a list of things they wanted to see. I think I ought to rephrase that. They had a list of things they wanted to photograph. Rameses II, the girl without her arms, the Mona Lisa, the Eiffel Tower at night, and so on.

Armed with a metro map, I thought we should get through quite easily, but I’d forgotten just what a tangle the Paris metro is. They need a better map, and they need a better way of highlighting the interchange stops.

The Louvre has changed a bit since I was last there. We didn’t have the central Pyramid before, nor did we have a rush-hour of tourists. I remember ambling around the place having the rooms almost to myself. There certainly wasn’t another soul in the snuff-box room. I’d warned the kids that it was large so they had this list of things to photograph. That means painting was ‘done’ with la giaconda. By the way can anyone tell me what the big attraction is? I cant see it at all. It’s just a boring old bat with no eyebrows who looks as if she’s just farted at someone she doesn’t like.

Anyway, after miles of corridors and staircases we managed to cover all the essentials on the list and the requisite number of photographs was achieved while I sneaked views of some very nice cuneiform writing, some especially old and brightly coloured Egyptian artwork, and some ancient coffins. I didn’t see anything from my hero Aknaten, but then I have visited the Cairo Museum and Tel el Amarna, so no worries. But I have to admit that every time I see that amazing stuff from four or five thousand years ago I’m blown away.

Next we went across the road to the Cathedral. I was going to hire a pedal taxi but €20 to go a mile is a bit steep. He brought it down to fifteen, but I wasn’t buying that either.

Once again it was like the metro at rush hour. I cant see what the attraction is. It’s just another church with columns and a few stained glass windows, but not particularly special. The rose window was nice, but…. when you’ve seen six hundred and forty two rose windows, this one is just number six hundred and forty three.

I lost the girls, and had to sit in the cold outside the exit waiting for them to finally appear. Then we went up to Monmaitre to photograph the Moulin Rouge. The metro runs under the main road, and there are grills which give a nice updraught, and you can stand on the grill and do a Marilyn Monroe, that is if you’re wearing a dress. All the girls were wearing trousers. How boring can you get? This is bohemia. This is fun country. This is sex city. Huh, trousers!

We were too tired to climb up to the Sacre Coeur but no problem, the pictures from the road up the hill were just fine.

That’ll do for one day. Part two next weekend.



My daughter lives in Fenland, which is boringly flat. I like to see a bit of undulation, but in Fenland there is none. It’s the home of agribusiness. The fields contain rich black earth, and food grows everywhere on a large scale. Large tracts of land are owned by the Coop, and there is a brisk turn-round in trucks on every road in the area. Wind turbines dot the landscape, and remind me of that concrete poem by Iain Hamilton Finlay:

The Horizon of Holland is all Ears

He is, of course, referring to the blades of the windmills sticking up. Obviously we must think of the ears of hares poking up. I’ve tried to find a photo of the construction which has the words reaching upwards like windmill sails, but cant find one. My own copy is in storage back in London. (By the way, it’s worth visiting his home in Scotland, where he constructed his concrete poems in the garden.)

Somewhere to the east is the lost treasure of King John, sucked down into the Wash. The wind races across the vast open spaces from Siberia, and in the winter the temperatures sink seriously low. My daughter tells me they hit -17C last winter. That is colder than I was one awful february night in Bulgaria when we were walking from the hotel to the local night-life all of 200 yards down the road. Half-way there we stopped, so cold we were seriously thinking of turning back.

Inside the rather nice little club we eventually reached we were served by tall thin girls with ridiculously short skirts and socks, with long bare white legs showing. I have never before noticed how cold legs can look. But I digress.

The only point of interest for me is the river Nene and it’s so-called valley. It must be the flattest valley on the planet. But it’s a charming little river. And somewhere running along the valley is the old railway line, once used by dear Freddie and Queen to record one of their singles while riding the wagons. Nice base line, guys.

Just to the south of this table-land is the town of Godmanchester and on the other side of the river, Huntingdon. The towns straddle one of the many rivers in the UK called Ouse. Quite why so many rivers are called Ouse is probably due to downright laziness. Apparently the name derives from the Celtic word for water or slow flowing river.

It’s one of the rivers that has been constantly altered and treated almost like a canal, with navigation being possible right the way to Bedford. The river was first modified way back in 1236. After the coming of the railways traffic on the river declined and by the end of the nineteenth century the navigation was virtually non-existent, and the river was subject to continual flooding.

Godmanchester is an old settlement dating back to pre-Roman times. Apparently there are 130 buildings there listed for special architectural interest, so if that is your baby, you really should drop in and wander around. The place is very picturesque.

The town is situated at an important crossing point, where the Via Devana and Ermine Street cross the Great Ouse. The Romans called it Durovigutum, but it changed to Godmundcestre in the 11th century, and the spelling moved about a bit until it settled on today’s version.

Just across the river is the more industrial town of Huntingdon. This is another of those places plagued by government boundary commissions. The town was once a county town, but Huntingdonshire no longer officially exists. Maybe things will change again. I note that Rutland is back again despite once being amalgamated with Leicestershire.

Famous (if that’s the right word) as being the birth-place of Oliver Cromwell, it was also for a time where Samuel Pepys was secretary to the Earl of Sandwich. However, I prefer the other side of the river.

The property market out here is very slow. It’s a rather depressed region of the UK. There is very little work about, and what there is happens to be poorly paid. With petrol prices so high it also means that if you live in an outlying village it costs a fortune getting to work. That all tends to depress house prices in the villages.

I had to make a trip across country, first to Somerset and then to Birmingham, which meant I escaped the fens along that great artery that runs from the East Coast ports to central England, the A14. The route goes through some interesting countryside but the road itself is clogged with trucks.

I shall be driving west next week.


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.