This week has been challenging.
On Tuesday, I had a call from a very close (and physically, very fit) friend who, after visiting the doctor for a persistent headache, received news of a large benign tumour that has been growing for about 20 years.
Brain surgery has been booked within days.
It was a "Tower moment" if you like.
I’m referring to the ancient Tarot deck that is still used by some to read fortunes and forbode future events.
The Tower card shows a lightning bolt unexpectedly striking a tall sturdy tower on a hill - causing it to catch fire and crumble.
When it appears in a tarot spread it forebodes a sudden, powerful force that likely brings a significant change.
Two figures are shown falling from the tower, representing the loss of stability, control, and a fall from security.
Source: Wikipedia
If we are to draw any correlation with the land cycle, it’s a fitting analogy to the 'black swan' moments we observe in the stock market, that trigger unforeseen panic at the mid- and end- of cycle collapses.
The difference, of course, is that as LCI subscribers, you are well-positioned to receive advance warnings of such events!
(I’ll have more on the peak’s timing in coming weeks.)
The cause of the collapse is known – speculation on land and the greed that is produced from the privatisation of land’s economic rent.
In short – rent-seeking.
The trigger for the actual panic (pandemics such as COVID, Oil spikes, war, or banking fraud etc) can be a little more elusive.
Rent-seeking can take on many forms, such as patents and government licences, for example, which cripple competition from smaller industries and produce an unfair advantage.
But undoubtedly, the one that gifts the greatest gains over the cycle always comes from owning the rights to land.
The increase in land price results from several things, including an increase in the working population moving into a region and the development of government-funded infrastructure.
UK Economist Fred Harrison coined the effect of infrastructure spending on the housing market as the ‘Law of Economic Absorption’.
The late, very great, US economist Mason Gaffney took it one step further with the acronym ATCOR — ‘All Taxes Come Out of Rent’.
The term ‘rent’, of course, refers to ‘economic rent’ — the windfall from owning well-located land.