Feeling overwhelmed with all the news?

Tuesday, 29 May 2018
Jakarta
By Phil Anderson

  • The real estate cycle
  • Remembering the future

Are you feeling overloaded?

Feeling overwhelmed with what’s going on in the world today?

Today’s news cycles now never ends. It’s 24 hours a day, 7 days a week, 365 days a year. The US President tweets relentlessly, shifting markets. He threatens friends and foes alike. And it generates a frenzy of news — right around the clock.

There is an easy way around this mess.

And you can even get an insider’s view of all the news. Sometimes before it happens…

Yes you can. May I suggest that you simply follow all the events from the vantage point of the real estate cycle. It’s really easy to do.

I’ll explain how after a quick look at the market numbers.

Markets

Overnight the Dow Jones Industrial Average closed down 58.67 points, or 0.24%.

The S&P 500 fell 6.43 points, or 0.24%.

In Europe the Euro Stoxx 50 index finished down 32.72 points, or 0.93%. Meanwhile, the FTSE 100 gained 0.18%, and Germany’s DAX fell 74.55 points, or 0.58%.

In Asian markets, Japan’s Nikkei 225 is down 122.66 points, or 0.55%. China’s CSI 300 is down 0.40%.

In Australia, the S&P/ASX 200 is up 9.60 points, or 0.16%.

On the commodities markets, West Texas Intermediate crude oil is US$66.84 per barrel. Brent crude is US$75.57 per barrel.

Gold is trading for US$1,298.41 (AU$1,724.47) per troy ounce. Silver is US$16.45 (AU$21.85) per troy ounce.

One bitcoin is worth US$7,103.22.

The Aussie dollar is worth 75.29 US cents.

The real estate cycle

Every 18 to 20 years (actually every 18.6 years precisely, but that’s is another story), the US goes into economic meltdown. Witness the history: the GFC 2008/2009, before that in 1991/1992 and if you’re old enough to remember, 1973/1974 being the prior collapses since 1955.

Here is how it looks using the Dow Jones:



chart image

Source: Optuma
Click to enlarge


Of course stock markets are going up and down all the time, and can move down for sometimes noneconomic reasons as well — like 9/11.

But the really big dips have been around every 18–20 years.

Living in Australia this is doubly handy to know. That’s because history shows that Australia follows the US in the real estate cycles just one year behind.

So if you see what’s happening in the US, and can understand why is must be so, you can easily plan for the future. You can plan with confidence about how to take advantage of it all.

Remembering the future

Imagine knowing that the events of 2009 were coming. I did. I retired on the proceeds having bought up in the prior downturn of 1991. I detail it all for you in my book The Secret Life of Real Estate and Banking.

Here my real estate clock:



chart image

Source: Cycles, Trends & Forecasts
Click to enlarge


Every 18 to 20-year real estate cycle in the US — since 1800 — has developed in exactly the order shown in this clock.  

After the bust, rents rise. This makes it (eventually) cheaper to build new buildings. So builders and developers do. This leads to a land boom once expanding credit begins again from the newly recovered banks.

All the old banking rules put in place after the downturn to stop another from happening are torn up and deleted.

So no surprises that last year the Republican Party gleefully got rid of all the Obama-era banking regulations.

So it should not have come as a surprise to you that a real estate developer now occupies the White House.

And it is not a surprise then that this said real estate developer passes tax laws that greatly benefit his activity — and the future of his industry.

And it should not come as a surprise to you that his party that he represents are now going to great length to unwind all of the banking regulations — exactly as done by President Clinton in 1996 and the same as was done in early 1980s after the massive tax cuts of the late 1970s.

All this tells you quite precisely what’s coming next. And for the rest of 2018 and into 2019.

I’ll just cut and paste for you exactly what I wrote to my subscribers back on 3 June, 2015…

‘So, if going into 2019 you notice the following…

  • the economy is really booming
  • inflation ticks up a little
  • the oil price spikes just a tad (as it did 30 years prior in 1989)
  • the world’s tallest, longest, largest, biggest building is opening to great fanfare
  • and the yield curve is threatening to invert….

Then you will know exactly precisely where you are on the clock.

Watch for it.’

I can guarantee that you should be able to work your way through the real estate cycle, understand it, know it, see it in action. It WILL ensure you are no longer overwhelmed by all of today’s news.

It’s a clear rhythm. There’s no randomness about it. The news, and the economy just go on like clockwork. About every 18–20 years.

If you’d like to be able to take advantage of all this in a way that is far better than what you’re doing now, then go here.

Phil Anderson,
Editor, Cycles, Trends & Forecasts