Am I exaggerating when I say that the world is, in fact, in
revolution, or am I just gullible in a world of endless media coverage? I don’t
think anyone can deny, however, that the 2010s seem to have started with a bang
– the West in financial turmoil, the Arabs in political turmoil, and both have
seen people on the streets, accompanied with heavily varied levels of violence,
to say ‘Down with the status quo’, although one doubts whether a new order is
ready to take over, or even existent. Indeed, this makes the United Kingdom, a
grey, grumbling, uppity group of countries full of likewise people, seem rather
tranquil, despite a sudden flair of disorder in the hot summer of 2011, perhaps
so tranquil that they thought London was tranquil enough. The proof for this is
in the sticky, rich plum pudding that is the British economy, not embedded
within a sixpence, but various dollar bills, euros, roubles, and Yuan. As the
rich tycoons flock from angry mobs encamping themselves in town squares, from
the feuds of oligarchs, or from full-blown all-or-nothing civil war, this
country seems attractive, looking in all directions of the globe, luring those
whose earnings make up for their hearts as blue as the way they prefer their
steak.
But disorder is not permanent, and when I say not permanent
I mean that it will cease for a long enough period of time to allow money to be
made again. They will resist the strong magnetic pull, perhaps because they
realised how bad the weather is. And in a globalised world, where the freezing of
bank accounts is like using a mousetrap to catch bears, the money will follow.
The moons of money rotate around those human planets which rotate around the
great sun of stability. And when the great world recovery picks up, what will
remain? Will the designer shops manage to keep customers in London, as they may
do in Moscow and Shanghai?
The more pressing issue is property. It is only with such
low interest rates, the lowest ever in the history of the Bank of England, that
people have managed to remain in their houses, and perhaps that is more of the
case in London, where prices are more than double the average, and where
£500,000 is not a figure that renders surprise. Why are they so high, even when
the UK’s economy was, and currently still is, in the doldrums? Not only is
London a safe haven, but the big elephant in the room is speculation, as London
was alike with the rest of the country in spending coffee mornings and office
chat about figures for property, and in the obsession of Location Location
Location, for a country with relatively poor infrastructure makes London look like
a jewel.
But those two factors are under threat by those interest
rates, at 0.5%. It is only a certainty that interest rates will have to rise
beyond the current level. With the new governor, Mark Carney, about to step
into the shoes of the Bank of England, we can also only see an end to the catastrophe
of quantative easing, of the printing of money. And what happens when lots of people
can’t pay their mortgage at the same time? The answer is a property slump,
where millions are wiped off the property market in London. Indeed, this is not
new. Paris, during the Great Depression, went through a similar cycle, as 1929
saw ever higher property prices, before there was a great slump, as a result of
the revival of the American economy in the mid-1930s. And this is not all bad – the best advice for
young earners who want their place on the property ladder is simply ‘If you
can, keep saving for that deposit’, and wait for the boughs to break on a
heavily-inflated market.
In no way do I condone the death of hundreds of innocent
people across the world. Nor do I give my backing to far-right movements springing
up in Greece, or Islamist movements in Tunisia and Egypt, but the fact of the
matter is, despite the meddling done by the current government, Britain’s
economy has been ticking along, but only just. The influx of foreign tycoons
from unrest is simply the vapours from the fuel tank of the British economy. As
a result, Britain must act slowly and steadily like the tortoise, until the
petrol pump that is investment and global prosperity is on the horizon.
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