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A look at the Property markets in Europe, with some thoughts on where they are going in 2018

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Looking Ahead to 2018 in the EU -- Part 4

The final aspect of the property market I want to look at is simply money.

There is a problem with money and banks. Banks screw up, then are bailed out by governments with tax payers’ money, and also via the bail-in legislation, with the money on deposit. If you don't know what bail-ins are, then I suggest you check out the rules. You may well be shocked. Your bank deposits are at risk. However you look at it, that’s theft. In no other business would that be allowed.

I have all my life invested in wine. My stocks are labelled, and if the warehouse company went bust, my wine would not be sold to defray their debts. So why are depositors’ funds which are kept in the bank’s warehouse used to defray bank losses?

Governments screw up, and spend like irresponsible teenagers, and tax payers are ultimately hit with paying interest on these debts. In order to get out of the mess they have created they print more money which devalues that already in circulation. The general public loses whichever way you look.

Okay, we all know this, but things are taking an interesting turn at the moment and until we can see how things will turn out I am not keen to take more risks than necessary.

The first problem is what happens when we have this great financial re-set. How precisely will SDRs affect us? They are about to become far more widespread than in the past. Formerly they were used in times of extreme emergency as liquidity of last resort. Now there are moves to used this form of money as the world reserve currency. How will that affect probably every aspect of life?

More immediately there is the small matter of banks which are insolvent, and that covers almost every bank in the EU. Obviously things are getting worse in Euroland because Brussels is about to put a support plan in place. And who will be supporting these bankrupt banks? Do you have to ask? Just look in the mirror. Let me simply quote from a recent article.

“The safety threshold that protects bank customers’ cash when banks go bust is under threat from Brussels.

The first €100,000 of a customer’s savings currently is protected across the European Union if the bank gets into trouble.

Brussels is now backing a change in long-established rules, to prevent customers getting hold of their money for months, instead of the present seven day period.

Those affected could apply to be advanced small amounts of their own money to meet living costs but even these funds will be delayed by five days during which their accounts will be frozen.”

I hope you read the above quote twice, and think about it. Shortly, I mean within weeks or months, if you hold money in an EU bank you are at risk. When the bank gets into trouble, which it is likely to do as hardly any bank in Europe is properly solvent, the bank can hang onto your money for as long as it likes, and if the bank needs propping up, the first money to be used for that purpose will be yours under the current bail-in rules.

You have been warned. Hold money in an EU bank at your peril.

Guys, this is getting ridiculous. The more I hear about matters concerning the EU the gladder I am that I have an exit route. Buy a house in the EU if you must, but if you do buy, then for pity’s sake don’t keep more than a couple of thousand euros in a European bank account.


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