Once upon a time, specifically 1884, John Peirpont Morgan saved the United States of America from a financial disaster. The Sherman Silver Purchase Act of 1890 has the effect of overvaluing silver over Europe, causing merchants to ship gold to Europe in return for silver which they would sell in the U.S. for a tidy sum. The efffect was to severly drain the reserves of the federal government were. Morgan convinced President Grover Cleveland to issue 30 year bonds in return for gold from Europe. It worked.

In the year 1907, Morgan was instrumental in preventing a bank run that had its roots in the stock maniplation of United Copper Company gone sour. The brokerage firm involved and counterparties went belly up starting a contagion that threatened to take down the financial system. Morgan oversaw a bailout of banks and a liquidity infusion into the stock market to prevent a closure of the NYSE. He even went as far as buying bonds issued by the City of New York to bridge a funding shortfall.

Sadly nearly 100 years after his death, the house that Morgan built - investment bank JP Morgan - carries little of the honour of its co-founder.

"Reuters) - Financial markets are gripped by the role derivatives have played in Greece's debt crisis, but Italy also has a derivatives time bomb, and hundreds of cities are in the 24 billion euro blast zone.

Italy

Many local governments eager to cut financing costs for years rushed to sign up for complex derivatives contracts, even when the terms were in English. But some cities, facing big losses when interest rates go up, are now trying to pull out of derivatives and suing the international and local banks that arranged the deals......."

Read more:

http://www.reuters.com/a...e/idUSTRE62A2SB20100311

An unfolding situation that could provide a blueprint for a One World Currency backed by gold, whose issuance would be tied to global money supply or GDP.

" BERLIN, March 13 (Reuters) - Germany is considering the possibility of euro zone countries using their central banks' gold reserves to back a European Monetary Fund, German magazine Focus reported on Saturday.

The German Finance Ministry declined to comment on the report by Focus, which did not specify its sources.

"A proposal from the finance ministry suggests pooling the gold reserves of the former central banks of euro zone countries in a stabilisation fund," Focus wrote...."

Read more:

http://af.reuters.com/ar...s/idAFLDE62C05A20100313

@ Scubidu. The One World Currency is a suggestion by the following (inorder of mention) Jim Sinclair, Martin Armstrong, Dmitry Medvedev and Nicolas Sarkozy.

Martin Armstrong just gives historical precedences for such an occurence:

Daric - Gold of Darius (Persia)
Tetradrachm - of Alexander the Great (Greek)
Denarius - Roman Republic (silver)
Solidus - Gold of Byzantine Empire
Ducat - Venice
8 Reals - Spanish silver "dollars" (Piece of 8)
Pound - English (Post Elizabeth I)
Dollar - United States

The Dollar hegemony is being called into question in many circles and yet the Euro and Yuan are not worthy heirs to the throne which invites the conclusion of an entente arising on a One World Currency managed by a Global Central Bank.

Moody's reprimand points politicians' gaze to the writing on the wall: social unrest.

"The US rating agency said the US, the UK, Germany, France, and Spain are walking a tightrope as they try to bring public finances under control without nipping recovery in the bud. It warned of "substantial execution risk" in withdrawal of stimulus.

"Growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion," said Pierre Cailleteau, the chief author...."

Read more:

http://www.telegraph.co....ent-austerity-plans.html

The current phase in the ascent of gold will witness active participation amongst institutional funds and sovereign states. The final phase will attract Joe and Njoroge Investor. Interestingly, central banks were stocking on gold amidst the worst global downturn since the Great Depression of 1930s. These actions speak of the role of gold as a hedge against instability.

"March 18 (Bloomberg) -- Central banks added the most gold to their reserves since 1964 last year amid the longest rally in bullion prices in at least nine decades, data compiled by the World Gold Council show.

Combined holdings rose 425.4 metric tons to 30,116.9 tons, an increase worth $13.3 billion at last year’s average price, according to the data. India, Russia and China said last year they added to reserves. The expansion was the first since 1988, the data from the London-based council show. ..."

Read more:

http://www.bloomberg.com...ve&sid=amBRPzwyB9SY

@ MV Ufanisi. The One World Currency would be a reserve unit to replace the U.S. Dollar as the world's reserve currency. It would also serve as a unit of exchange for international settlements.

Each nation will be responsible for its own monetary and fiscal policy. Each nation will issue its own fiat currency.

It would free the world from importing U.S. domestic fiscal and monetary policy through the Dollar.

A choice may be made by a nation state not to hold it as a reserve currency.

@ Scubidu. Inorder to understand his predictions and solutions, you will have to read all his articles inorder of release. Otherwise, you'll end up with a shallow understanding of the argument presented.

@ Tonicasert. I haven't made quantitative studies into the real estate cycle in Kenya. Nevertheless, it exhibits all the hallmarks of a frothy market.

My wish is that you excercise caution in this market.

All markets have their inherent cycle patterns. An example of a real estate market that has been quantitatively mapped out is that of the U.S. Each up-cycle lasts 5.5 years while its down-cycle 3.14 years.

Read more of Martin Armstrong's analysis:

http://economicedge.blog...-forecast-for-real.html

@guru267. I aggree with your ascertion that property prices are being fueled by Kenyans in the Diaspora and foreigners. It is that which characterises a bull market.

Booms and busts are brought about by the inherent human nature to speculate. In a free economy, capital will seek to profit in either of the five asset classes: stocks, debt, technology, commodities and real-estate. A concentration of capital in any one sector leads to a boom cycle whilst a dissipation of capital results in a bust. Rarely do two asset classes boom at the same time as was the case in Japan's real-estate and stock market booms of the late '80s.

"That the free enterprise economy is given to recurrent episodes of speculation will be agreed. These — great events and small, involving bank notes, securities, real estate, art and other assets or objects — are, over the years and centuries, part of history. What has not been sufficiently analyzed are the features common to these episodes, the things that signal their certain return, and have thus the considerable practical value of aiding understanding and prediction.

Regulation and more orthodox economic knowledge are not what protect the individual and the financial institution when euphoria returns, leading on as it does to wonder at the increase in values and wealth, to the rush to participate that drives up prices, and to the eventual crash and its sullen and painful aftermath. There is protection only in a clear perception of the characteristics common to these flights into what must conservatively be described as mass insanity. Only then is the investor warned and saved."

A Short History of Financial Euphoria (1990) by J.K. Galbraith

All the reasons you've given for a 10 - 15 year appreciation are correct. But even then, the market at some point may choose to cool over a 3 - 5 year period as in the case of South Africa. The Rainbow nation had the best performing real-estate market in the world from 1995 to 2007. It is a developing market whose prices have corrected since then.

On the Hyman Minsky's seven stages of a bubble, our real estate is transitioning from Stage 3 to Stage 4.

Read more:

http://www.notesbit.com/...9s-seven-bubble-stages/