A letter this week from London, where the only topic is money.

For the past few days, I have been attempting to buy an apartment. Having set my sights high, my initial foray into the market was depressing. Today, however, I discovered that I may have an outside chance at achieving the location I wanted, in a much smaller space than I had hoped for. I made an offer that contained a larger number than any amount I have ever spent before, an amount close to equal to everything I have spent in the last 15 years. These shenanigans have produced a giddy feeling, which is either excitement at the possibility of becoming a property owner or final proof that I have lost my marbles. Time will tell.

During the week, two things happened of note. This afternoon, I bumped into Sir Paul McCartney, of whom I shall be a neighbour (broadly speaking) if today's offer succeeds. Later, on consideration, it sunk in that real estate costs in London, Bermuda and the US are dangerously out of whack with the price of everything else.

Three years ago, people were worried that first-time buyers would be unable to enter those housing markets. Since then, prices have continued to roar along. The people I know today who would traditionally have been first-time buyers at this stage of their lives all tell me that they will never be able to buy a house, and so have abandoned that notion completely. That cannot augur well for the future.

Here's a curious thing that I wasn't expecting. Having some money, it turns out, is not all that helpful. (Having enormous amounts, one imagines, must be better.) As a man who can balance his pocketbook and have a little left over for emergencies, I was once the King of England, since the great majority of that country's citizens drink their paycheques of a Friday night and then stay home for the rest of the week, watching telly.

I've mentioned before that to spend time in Bermuda and London was to experience the yo-yo effect of being not utterly broke in London, which was good, while being largely broke in Bermuda, which was only OK at best. Now, I find I am hopelessly broke in both Bermuda and London and, I would imagine, Canada, Switzerland and many other places, too. This is curious, in that I have a little of my Dad's money, which seems to have made me poorer than ever I was before. The flat I'd like to buy would cost three times as much as I have. I suspect that if I had three times as much as I have, I'd want three times more.

I had thought to drop down a postal district to find the flat I wanted, but then discovered that life in the next postal district down exactly resembles life in Romania. The rain; the grey faces; the hunched-over, everything-is-hopeless ambience; the stores selling cheap goods that fell off the back of a truck — yet properties are just about as expensive, and supply about as rare, there too. The nearest property I can afford that would match my original plan is probably in Romania.

One element working against me is the exchange rate for Sterling against the US dollar. The reports all suggest that the dollar is a spent force, and that pretty soon we'll all be spending yuan and renminb> instead, the Chinese currencies. I doubt that, but holding my ground is killing me at a time when, if Sterling were at 1:1 with the US dollar, I could buy Buckingham Palace and the Horseguards' Parade. Everyone loves a parade.

Price inflation in real estate hit Bermuda at about the same time it hit everywhere else. The States was the market leader, starting from a lower average cost base than the rest of us. The outcome there, of late, has been repossessions, which tend not to happen in Bermuda and occur less frequently in the European countries, where a man's home is his castle as much as it is his primary investment. Whatever it is, no one in London who owns a home will shut up about how much money his or her real estate skills have accumulated.

It all has the smell and feel of a bubble, or at least, of a cylinder of the economic motor running out of kilter with the rest of the machinery. Misfiring might be the engineering term. A blow-out would do no one any good, since many have borrowed up to their noses to jump into these expanding markets, and any kind of downturn — now deemed heretical by a new generation who have never known anything but upward motion — would be ruinous.

My earlier comments on the worthlessness of money might stand a small correction. The unbreakable rules of money are that more is better, and what you have really won't quite cut it. The trick is that desire and reach are scalable. All I need to do is to cut back on my dreams and accept that small is beautiful, half a loaf and all that. It seems less of a sacrifice than many younger people will be making.

The weather, by the way, is bad. The outlook is "consistently horrible". I saw a forecast that said it would remain horrible until next year. Ah, London!