'Blood on the Streets' and Buying Property.

Baron de Rothschild once voiced the opinion; ‘When there's blood on the streets, buy property’. A somewhat distant response, to say a historical event, which was disturbing so as to have ‘blood on the streets’ would bode well in an Oxbridge entrance exam, as the film ‘History Boys’ would have us believe. In recent years we have seen academics seek to reconcile Hitler with Plato, Genghis Khan with St. Thomas Aquinas and so on. Although it is beyond the limits of this blog to explore these very interesting academic attempts, it seems unique, emotionally isolated interpretations are favoured over all else, even accuracy and utility. It should be stated here that the aforementioned historically important names bar none, occupied a position within an argumentative framework (Collingwood) and engaged in the discourse of their times (Skinner). Their work, be it print or action, were emotionally charged and were a response in line with their convictions and prejudices. Therefore to separate the emotion from a calculated business decision, although held up as somewhat of a Platonic ideal form, is not only unachievable but should be undesirable. How one can possibly argue that the four Aristotelian virtues and platonic morals have not been embedded in capitalism from the start and formed an important part of its functioning is beyond me. A basic understanding of Smith (The Adam-Smith Problem or Paradox) would evidence this.

Now to business. Real Estate in emerging markets does offer an investment opportunity without ‘blood on the streets’. In particular, commodity rich countries from the ex-soviet bloc such as Mongolia offer significant potential capital appreciation and excellent rental yields. Mongolia has a young banking sector on the cusp of a European derived mortgage loan system. Although interest rates are currently14%, they are expected to decrease periodically over the coming years as GDP growth of over 7.5% pa continues. Increasing domestic wealth of course means increasing domestic demand. The first Asian country to ratify the International Criminal Court (Amnesty International - Mongolia) and considerable commercial legislation in place to support and protect foreign investment means that Mongolia has the right balance for the more conscientious or indeed prudent investor.

For further information on Real Estate in Emerging Markets (including Mongolia) see Property Frontiers. For further information on Mongolia go to the Mongolian Development Gateway. For information on how to structure your investment Contact Us at ATC Solutions.