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Luck or foresight?
Nobody paid attention during the 1990s when those familiar with the real estate cycle predicted the Depression of 2008 (including myself, in 1997). Almost all economists, financial analysts, journalists, pundits, bloggers, and armchair cynics will also scoff at this prediction of a severe recession and depression in 2026. They will say there is no way to accurately predict such an event so far in advance. But the cycle exists precisely because people don’t believe it.
There has been one fundamental cause of the boom and bust cycle: massive subsidies to land values. Since these subsidies are a governmental intervention into the market, the cause of the cycle is not “business,” hence the term business cycle is misleading. It is a cycle of economic distortions caused by government policies.
The reason why land is the most important element in the economic-distortion cycle is that much of the gains from economic expansion is captured by greater land rent. Then when speculators observe rising prices for real estate, they jump in, and increase the demand, accelerating the rise in prices. Land values then rise above the prices which those who actually want to use land can afford. High prices for land and high interest rates choke the expansion. As investment falls and workers in real estate lose their jobs, the economy falls into a recession.
By 2014, population growth and demolitions will have reduced the vacancies from the construction bubble, and then the growing economy will pull up rents and land values, attracting the speculation that will generate a ten-year real estate bubble that will peak around 2024.
It's actually much more likely the economy is ripping in 2026.
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Yeah, my guess is we are in a recession now and have been for a while. Gonna get worse and start ripping in 2026. Just a feeling. I'm not an economist. But actually, most economists can't predict the sun rise so...
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I think the Trump administrations plan is to take the medicine early, get rates and dollar down and then later this year do tax cuts and deregulation and have the economy and market ripping into the midterms.
This is Luke Gromen's thesis not mine but I agree.
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Yeah... I hope that is what happens. I think we are long overdo for a recession. A correction. Seems like Trump is TRYING to bring one one to me.
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51 sats \ 1 reply \ @grayruby 3 Apr
Yellen kept things afloat by selling a ton of short term treasuries. I think they want rates down so they can roll the debt to longer term paper at lower yields.
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That sounds right to me.
I remember watching gold bug documentaries in the early 2000s and they were dead-on-balls about 2020-2024 being a tipping point when considering things like debt growth and demographics... what a coincidence a global black swan was manufactured during that time?
Now imagine the intelligence that insider working groups and think tanks have beyond these gold influencers (which may themselves be insider operatives?)
It's unreasonable to think that at very highest levels these things CANNOT be gamed out decades in advance.
A real-estate bear market would be aligned with housing affordability and economic productivity, Eric Trump was just on Fox Business talking about hedging the families real estate portfolio with Bitcoin...
Even more evidence that the the timing and distribution schedule of Bitcoin is not the fairy tale interpretation.
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Interesting. I appreciate the point that cycles like this can only exist (on a predictable schedule) if people don’t generally believe in them.
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Magic ah
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stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.
More than a grain of truth in this analysis. US debt at $36 Trillion is unsustainable. By 2030 debt servicing and core government expenditure will exceed government receipts. The tariffs seek to forestall foreclosure! The empire is facing imminent insolvency. Real Estate is highly debt leveraged and has been over leveraged since the neoliberal 'reforms' of the 1980s which removed all restraint upon commercial banks regarding the purpose to which they issue fiat debt finance. This has led to vast misuse of fiat debt funding to support non productive real estate speculation while funding of productive assets has withered...ie parasitic debt fueled crony capitalism. Trumps permissive 'crypto' stance enables the construction of virtual asset havens analogous to the shadow banking network Britains wealthy elites created as it declined. They were not thinking of the ordinary citizens but solely preserving their elite wealth.
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