Wednesday, Oct 24, 2007
2008 predicted in 2005
moneyweek.com: Bust will follow boom - but when
Here is an Aug 2005 article by Fred Harrison, author of Boom, Bust: House Prices, Banking and the Depression of 2010. He theorises that boom-bust cycles are really driven by land prices or property cycles. Is he being proved right? This article (and many more indicators) has spooked me in 2006 to sell my house in 2007. Although I've cashed in on the sale, I hope Fred is wrong on his prediction about the depression in 2010 for all our sakes - now I am worried about my employment and financial future.
Posted by chris @ 01:19 AM (652 views) Add Comment
8 Comments
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1. Ticktock said...
I have read this this book and found it very interesting indeed. Not quite so sure about is 'solution' to the problem, but his theory of 18 yr. land speculation cycles (or 'business cycles' as we prefer to call them) is fascinating to say the least. Well worth a read, and will be interesting to see how accurate his alarming prediction turns out to be. Looking pretty good at the moment I must say!
2. Davidr said...
The flaw in the argument advanced is that the timing of the crash is predictable through logical analysis of trends. If this were true we could all avoid it, and thus it would never happen. It's going to be a bit like a building being overloaded with weight. It won't subside gently into the ground, it will crash unexpectedly. Analysis with hindsight will convince those who should accept responsibility that they did all they could, they have no responsibility, it is all down to the stupidity of the ordinary man. The crash that we all know must happen will appear to be triggered by something like the consequences of an incursion into Iraq by Turkey or a skirmish with Iran, or selling of dollars by China. This will enable our esteemed politicians to say "and just as we had everything running nicely under control, this comes along and causes a crash". Name any British politician who has put his hand up later and said "yup...it was down to me ...I blew it" Nigel Lawson? Norman Lamont? Perhaps they did and there are others who did, but their names don't jump to mind
3. sold 2 rent 1 said...
The 17-18 year cycle is present in stocks, oil, gold, and property.
stocks PE low: 1948
stocks PE high: 1966
stocks PE low 1982
stocks PE high 2000
Gold/oil high 1980
Gold/oil low 1999
UK Property crashes
1974
1992
2010????
The IR cycle is double the 17-18 years at 35-36 years
10 year US T-note yield low 1945
10 year US T-note yield high 1981
Debt cycle is 70 years but has been extended by the Fed's IR slashing and housing bubble
Debt peak 1933
debt peak 2010-2012?????
By delaying the debt peak the fall-out will only be worse.
Prepare for a depression
4. Davros said...
Of all the commentators, he's the only one who's got is spot on. He got the last crash too.
5. Icarus said...
V interesting, s2r. How do the cycles relate to each other?
6. Techieman said...
absolutely S2R For Asset Prices K Waves rule. The normalised K Wave has been extended.
7. Techieman said...
the Fibo ratio of 1.618 can be applied to the 10 year difference between the two last peaks on the HPC chart on the home page. ROUGHLY (and thats the point!) thats 1980 to 1990 = 10. 10 X 1.618 = 16.18 plus 1990 = 2006.18. Close enough perhaps.All sorts of Elliott relationships.
8. Ejdodson said...
I have known Fred Harrison for over 25 years and provided him with research support on the U.S. economy for his 2005 book, Boom Bust. At the time, my own conclusion was that his forecast of a 2010 economic crash was more certain for the UK than for the US. Ongoing reports on the U.S. real estate markets, on individual bankruptcies and foreclosures, on a skyrocketing federal government debt and other stresses convince me that the U.S is on the same collision course with economic calamity. A year ago I put together a presentation on the U.S. economy based on Fred's analysis. Recently, I updated the data and will be doing so every six months. If anyone is interested in viewing this analysis, contact me via email and I will be happy to send it to you (no cost involved). You need to be able to view Powerpoint files on your browser.
Ed Dodson
U.S.A.