This week’s Unique Property site property bulletin contains my annual roundup of re-purposed water mill buildings for sale in France. As usual there is a significant list of such homes, set in idyllic settings alongside a substantial river or stream. Not only are they attractive homes, but they are substantial buildings set on substantial plots, and they are available at what Brits would consider to be cheap prices.
The only snag is the current political chaos that has engulfed France. Each property for sale is a piece of what really is la belle France, despite the fact that politically speaking la France seems to be anything but belle at the moment.
Sadly, that is also the situation across Western Europe. Everywhere is in turmoil, and it looks as though the turmoil is set to continue. This does not bode well for property prices.
The cost of living is rising across the continent, but industrial output is tanking, which means that wages are not scheduled to rise anywhere near sufficiently to counter the cost of living. It also means that government spending is set to increase when budgets are already bust. Result? Western Europe is becoming a major debt trap region.
As discussed in previous blogs a debt trap economy is one where the government borrows money in order to increase debt, which is a recipe for financial destruction. Borrowing to invest to expand an economy is fine, but borrowing to fund previous debt is suicidal. Unfortunately that is the case with most of the European countries. It is a situation which can only lead to poverty. It certainly does not presage the coming of good times.
I live in what appears to be an anomalous zone with property prices still rising, though at a reduced rate. I suspect this is because of a large exodus of people from other parts of Europe who wish to escape the chaos at home for what appears to be better prospects and better weather down south. I cant see that situation continuing.
I am trying to see a way forward, but I have also been saying that it is very difficult to second guess the future when it depends so much on the vagaries of politicians who appear to be complete morons.
What on earth is the rationale of Washington politics which has seen several trillion dollars wasted in a war in Afghanistan, and more trillions on a war in Iraq, and almost as much on the destruction of Ukraine, and what appears to be a start-up follow-up in Georgia?
The good news (if it happens) is that Trump as president will dial down all these wars and concentrate on trying to rebuild America’s industrial base. Let’s hope that does happen. Europe needs a break.
The real problem is that Europe also needs to concentrate on rebuilding its economies. Unfortunately, the current crop of loonies seem hell-bent on continuing the destruction of the continent’s economic base.
As I say above, that will ultimately show up in a gradual erosion of property values.
If the BRICS start to bring gold back into the picture as a base for valuing cash, then poor old Europe will be in an even worse state. First because the euro cant very well be backed by gold, and secondly because the BRICS countries are the ones with all the commodities which Europe will need to buy from them. They will be paying in a weak currency to get goods from countries with stronger currencies. Sounds to me like a recipe for further disaster.
I have likened the state of Western Europe to a slow motion train wreck. Perhaps the photograph below may be an appropriate image for what is to come.
…although I hope not.
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