London House Prices Shock

A publicity seeking company that you have never heard of, have released a story (they call it a report) saying that if the eurozone breaks up, it will see expensive houses in London halve in price. Here is their reasoning; property has been bought at the top end primarily by rich foreigners looking for stable assets away from eurozone Europe.

There has been a surge in this activity they say. If the Euro goes kaput (which is like asking will the sun come up tomorrow) then there will be a brief uplift again in London prices, but as it all settles they will leave and prices could fall by 50%.

This didn't seem right, so we asked a six year old what they thought. Did house prices double in London due to all this buying by fearful Euro avoiders? No. Why did they buy in London? Because it has fine houses, in a much less volatile economy. Will this change after the Euro crisis settles? No. What will a 'settled' Europe look like when the Euro has become history?. A mess, with many countries vying with each other for trade by devaluing currencies and protectionism. Possibly a bit of fighting (you know, the thing the EU guaranteed to prevent).

How long will this last? Perhaps a decade. With a much poorer Europe resulting. If you thought London was a good bet now, why and when would you leave? For where? This is stark evidence, actual empirical evidence of the way Britain can weather the storm and come out clean. By being independent, getting as far away from Europe as possible, increasing industry at home and trading widely. We could ask the Queen what all this Commonwealth stuff is about, perhaps.

Does Cameron realise any of this? The six year old says he doesn't expect Cameron to move up to his class any time soon. Apparently, his attentions are held by a very disreputable gang that is hanging around at the moment. They call themselves the European Union I gather. They have some interesting, metaphysical ideas such as black being in fact white etc. I think Cameron does have a back up plan though. Whilst generally he believes that if something is absolutely, provably broken, it may not be. But, if you stick with it, the fairies will come and mend it while you are asleep.