London, UK - 16 July 2007, 23:37 GMT

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to:

. Robert McNally, Chairman, London Chamber of Commerce Property and Construction Group, for "Erosion of Commercial Real Estate as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City of London, for "Destructive Creativity, Leverage and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for "The Fear of Central Bankers -- Flight from Illiquidity, Derivatives and Heightened Risk of Contagion;"

in response to, "Are the Currency Markets Warning that there is Trouble Ahead? The Precipitous Decline of the US Dollar and its Impact on the World."

Robert McNally is Chairman of the London Chamber of Commerce Property and Construction Group, a member of the executive committee of the Singapore Business Group in London and a member of the Investment Property Forum. Robert is a Partner in the leading City of London based international law firm, Stephenson Harwood. He is a recognised practitioner in real estate and real estate finance matters with over twenty five years' practical experience of finding solutions to real estate issues. He has a wealth of experience in all aspects of real estate and other property backed financing arrangements. He has also lectured in the UK and overseas on a variety of property related issues including, real estate investment in the UK and contemporary issues in property financing. He writes:

Dear DK and Colleagues

Re: Erosion of Commercial Real Estate as a Solid Asset Class

I trust that you are all well. I have found this ATCA Socratic dialogue particularly interesting since it reflects what I have been observing in the UK commercial property market for some months now. Traditionally UK commercial property has been an important asset class particularly favoured by entities such as pension funds and life assurance companies principally because UK commercial property has offered certainty of income over a long term. As a consequence UK commercial property has formed a vital part of any balanced investment portfolio, providing high levels of income security and also the potential for capital growth, compared to the bond and equity markets, which have tended to be more volatile.

[CONTINUES] [ATCA Membership]

Given the significant investment by UK pension funds in UK commercial real estate and with current general concerns regarding the inadequacy of pension provision in the UK, if there should be a "sudden disruptive movement" in the commercial real estate market this would be a further blow to the pension fund industry and the millions of workers who rely upon decent pension fund returns to fund their retirement.

Watch this space!

Robert McNally