A few years ago there were three key European countries labelled the property hotspots; countries with the fasted rising house prices:

England (UK), Spain and Ireland. This was around 2005. Of course other countries from the Baltic's to the Adriatic were in the same league, but these were new, emerging markets. In those days the experienced investors made a quick calculation:

Take the rent for a property per year and relate it to the property value - what is the yield.

If the yield is below what you get in any secure investment then there is little incentive in joining the so called "buy-to-let" market. Some people pointed out - don't let it - just buy and sell it the rising market and you can make a profit just in the time it takes to do the paperwork. In Spain people were buying of plan on green sites and sold along the way as the buildings started growing into the sky making good profits - while it lasted. Slightly more restricted but along similar lines many projects shoot up like this in Ireland and the UK.

Why do I think that?

First let's be clear - I am not discussing statistics and numbers. They will prove anything we want them to.

I am looking a what will happen and how real people will feel it. Statistics may prove my view wrong and I would be more than glad to find I was wrong in a year's or two time.

The reality we can all see, read and hear repeated up and down the high street of our governments is - we need to save. They are right - we need to save.

We are not discussing how we got here - that's another, important lesson.

This is about the need to save, to cut the deficit and there is no way we will save later by spending more now. We need to save now. All employers do that, all households do that, the local councils have to do that and regional and national governments as well.

... building up even more?

Good question, and there is a simple answer. It might be building up a little more, but then it will burst. This is as certain as the outcome of life.

All and every bubble in the world's economic history has burst. To know exactly when that will be is difficult to predict.

There are several reasons why this is going to happen. One is the phenomena of truth. The truth will always come out. Bubbles build up over time fuelled by economic progress and eventually this upwards trend is only sustained by money chasing the opportunities that have long gone.

Just as on the roller coaster on the right the economy will go down a bit more again before we will see modest improvements.

This prognosis can be underlined with a lot of statistics and bankers "science" - but it is also common sense and the milkman, the butcher and the baker down the road can tell you that (if you still have them). Otherwise you can take out a subscription for the FT (Financial Times) or the Times as provided for now by Rupert. The bottom line will be the same.

House prices in the countries with strong historic real estate equity growth (UK, US, Canada) will remain flat for a while to fall back in line with the more logical rate of doubling the value every 10 years which suggests an annual average increase of well below 10% - far more realistic than 25% on equity.

Stocks slip amid evidence economy is slowing - NEW YORK - Investors cashed in some of their recent gains Wednesday after the Federal Reserve gave them more confirmation that the economic recovery is slowing. The Dow Jones industrial average fell ... [BN-Net Economy News]

The mixed news continues. The double dip recession looks very likely just as this data from the US indicates.

Look at Japan and the good news is close to the bad one. Greece is still digesting the reforms and "fires" flare up here and there. In Spain the Prime Minister cancelled his August holidays and stays in the office to boost moral and to prepare legislation that could still spark trouble when the temperatures cool for the autumn.

Pessimissm spreading through marketplace - A European Central Bank executive has said that all developed countries could face a Greek-style debt crisis. [BN-Net Economy News]

Retail, factory sales rise steadily - WASHINGTON — Retail sales rose in April for the seventh straight month, factory production surged and businesses restocked their shelves. The trio of government reports Friday pointed to an econ... [BN-Net Retail News]

UK households £6 a week worse off than last year - The average UK household was 3.8% worse off in February than a year ago as weaker earnings and inflationary pressures hit discretionary income. [Retail Week - News]

Do people really feel the difference of £6 a week and stop spending or do they stop spending even more because they worry about being worse off?

In 2007 at a conference in Moscow I talked about the few certainties we have in life. The other one I discussed in more detail was “Recession”.