Cover of MoneyWeek magazine issue no 577

Surfing the money wave

24 February 2012 / Issue 577

What to buy as central banks keep printing


  • Fenner - a great growth stock to buy now
  • This is not a financial crisis
  • The downfall of Britain's most-wanted fugitive


A slow-motion tragedy

In all the excitement about the new Greek bail-out, something important is being missed. A slow motion human tragedy is unfolding across the peripheral nations of Europe.

I spent half-term on the Algarve in an almost-empty hotel. In the fields surrounding it, the oranges are rotting on the trees. I’m told they aren’t being picked commercially because the market price isn’t high enough to cover the labour and bureaucratic costs of selling them.

So they’re only being picked by those desperate enough to try to sell them on the roadside. But while oranges are all but free on the Algarve, not much else is. Golf enthusiasts told me that the price of playing a round has doubled in the last few years, while the prices in cafés and restaurants seem to be near central London levels.

Raising prices in the face of falling demand is clearly unconventional. But there is, we were told, a crazy rationale behind it. Service providers say they can’t cut prices and stay solvent (labour costs, taxes and bureaucracy again).

• Read the full editor’s letter here: A slow-motion tragedy.