How many Million pounds do you walk past every day?

Despite the credit crunch and the recession, property prices have held up remarkably well in Mill Hill. This could be down to low interest rates, it could be down to the area. Given that several of our largest financial institutions technically went bust, it is amazing how little real damage seems to have been done. I bought my house in 1987 for £40,000. It is now worth in excess of ten times that amount. Assuming every house in my street is of a similar value (they aren't, most are worth more), my road is worth £48 Million pounds.

Just think how much all of the property in Barnet is worth. It is a huge, mind boggling sum. Now consider this. Most people don't actually really own their house. The bank/building society do. Until you pay off your mortgage, they have a charge on your property. What happens if they go bust? If just one Bank/ Building Society goes bust, another company or the government would pick up the loan book. If however they all go bust and the whole house of cards collapses, what then?

If there were no companies to lend us money for mortgages left, no one could buy houses and property prices would also collapse. We'd all be left with huge debts, no means to pay them and no assets to cash in. Given that there is no way the whole country could be evicted, what would happen?

I am just asking this because as best I understand it (and I'm no economist) the party most likely to form the next government of Great Britain has a policy of letting banks fail, if they can't meet their commitments (please correct me if I'm wrong). Now I'm not criticising this policy (as I said I don't understand it). I'm just wondering if the most prudent thing to do is sell every asset I own, buy gold bars, hide them under the bed and wait for the economy to fail. That way I'll be able to buy my whole road for next to nothing. A friend who knows about such things tells me the price of gold is the only true way to tell how the economy is doing. The higher the price, the worse a mess we are in.

According to Goldprice.org it's up 21.72% on the year and 159.2% over five years. If I'd sold my house five years ago and bought gold with the cash, I could own my house and the one next door today (along with a flat on the other side). What does this really mean? If gold is "real money" it means that your house is really worth approx on third of what it was then. How does it feel to find out that you've lost two thirds of your biggest asset in real terms and no one had the decency to tell you? You may think that "oh it will be alright, things will recover". Well sadly it isn't that simple. To make up for this difference between what you think your Pound is worth and what it is really worth, the Government has taken out a huge mortgage on all of our behalf (it's called the Deficit). What happens to Mortgages? That's right, we have to repay them or we lose the house. That is why the next few years will be rather difficult for us all, whatever happens. Enjoy your breakfast.