How Was the Cycle Discovered?
Continued. A brief History lesson.
We have carefully researched Sydney House Prices since 1967, and related them to the World Real Estate Cycle, and discovered some amazing trends not being reported by the mainstream media. We have entered the figures into an easy to read GRAPH data showing the Sydney AND Melbourne cycle in detail.
These graphs contain never before seen analysis of the market, revealing startling information seldom reported in the press or the media, and contains highly valuable and rarely found information, not available to our knowledge anywhere else.
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After Homer Hoyt, Fred Harrison (born 1944) followed on. A British author, economic commentator and corporate policy advisor, notable for his stances on land reform and belief that an over reliance on land, property and mortgage weakens economic structures and makes companies vulnerable to economic collapse. He is acknowledged as having predicted the 2008 subprime mortgage crisis, laying it out in his books as early as 1997.
How Was the Cycle Discovered?
Harrison has been very active in the UK media, with dozens of newspaper and magazine articles, and many TV and radio interviews. Since 2005, several commentators have agreed that his predictions have consistently proved correct.
As an example, in 2005 there was an almost unanimous view that the rise in house prices would moderate and that any talk of a "housing bubble" was both premature and indicated a false understanding of debt economics.
Harrison warned that there would be a two-year explosive growth in prices and property speculation before the market imploded in the winter of 2007/08 with heavy damage to the financial markets. As shown by the 2008 subprime mortgage crisis, he was essentially correct on all points. His prediction that the problems with debt economics and scaling would contribute to a worldwide economic depression has been borne out. There has been a major recession as a result of the mortgage crisis
The cycle became more well known through Fred Harrison's book ‘Boom Bust’. The first edition of his book was released in 2005 and predicted a house price crash in the USA in 2007-8. We all know what happened next.
Fred Harrison in the media:
Bust will follow boom – but when?
05/08/2005: Many think that the global real-estate bubble has nearly run its course, but Fred Harrison reckons it has another three years to run.
House prices: expect the worst
In August 2005, Fred Harrison told MoneyWeek that the UK property boom would last another three years, before ending in 2008.
When will house prices finally crash?
8/11/2006: Britain has now entered the last two years of the property cycle. In fact, prices could already have peaked. Here’s why – and what you can do to protect yourself against the coming fall.
Is the global property market about to crash?
30/08/2007: We are in the final growth year of an 18-year cycle, says Fred Harrison. Find out why the good times are coming to end – and why the government is unlikely to come to the rescue.
Then PHILLIP J. ANDERSON, an Australian economist, businessman and internationally acclaimed commentator studied all these works and more and published his own book on the real estate cycles, "The Secret Life of Real Estate and Banking" in 2008.
He is widely regarded as an expert on business, real estate and commodity cycles. Anderson graduated from RMIT University in 1985 with a degree in accounting. He is founder and managing director of Economic Indicator Services (EIS), an economic forecasting service operating out of London and Melbourne. Phil also writes for Agora Inc., founded in 1979 and headquartered in Baltimore, Maryland, and one of the largest and most successful consumer newsletter publishers in the world.
"For the first 144 years of real estate enclosure in the U.S., land sales and/or real estate construction peaked almost consistently, every 18 years.The world's worst downturns are always preceded by land speculation (the chasing of the economic rent) fueled by misguided credit creation courtesy of the banks."
Philip J Anderson
Essentially: Anderson has collected evidence that he says proves the United States housing market moves in approx an 18-year cycles. 14 years up, 4 years down. And that Australia follows a very similar, but not identical, pattern.
This prediction is based on a repeating cycle of land values and stock prices that has been proven right — since 1784.
"For the rent collectors, this is a profitable system, not open to question. Now, as China, India, Russia and Brazil, amongst other nations, industrialize and open up their economies more and more to the cabal of Western banking empires and the private collection of their nations’ economic rent, this system of boom/bust can only become global, bigger and even more violent.
"Gann’s methods in referencing these time frames have produced quite accurate forecasts in the past; the cause is still with us so there is every reason to think this will repeat." Phillip Anderson