RE, RECORD Price: Global investment giant buys Blackburn Cathedral Quarter office block for £9.1m.

This is good news, and it’s really grand to see a positive news story about Blackburn.

I do have an inkling of concern in as much as there is no attempt in the story to offer readers an alternative narrative or perspective. I say this as my experience has led me to consider, develop and seek-out different viewpoints in order to gain some additional context to events.

As I understand the situation the regional commercial property market generally is experiencing a lift in asset values, which has been attributed in part as a reaction to the high valuations in the capital. So, while the news in the story is a vote of confidence for Blackburn, it is to some extent a manifestation of wider trends and events evident throughout the country, or so it seems.

While there are many reasons to explain the rise in the prices of prime commercial property as an asset class I suspect that government policy of financial repression including QE – quantitative easing – and ZIRP – zero-interest rate policy – has played a significant part here as investors desperately seek out yield.

In other words, one could just as easily argue that this story demonstrates the way in which the prices of hard assets more generally have increased in value markedly, thus distorting the economy and re-ordering wealth in society very significantly.

If history is any guide we can be pretty certain that in the fullness of timethe human propensity towards herding and optimism will produce gross over-valuation of an asset class, otherwise known as a bubble.

Kevin Colne (via web)