In August 2008 the late, great, American economist, Mason Gaffney published a paper called - THE GREAT CRASH OF 2008.
In it, he unlocked the underlying causes of the 2008 financial crisis within the context of the 18-year land cycle.
Here’s a little of the introduction,
This crash is The Big One; it has the signs of becoming a Category 5.
How do we know?
We’ve “been there and done that” so many times before, roughly every 18 years over the last 800 or more.
Major wars and, rarely, plagues have broken the rhythm, along with the little ice age, reformation and counter-reformation, political revolutions and reactions, the rise of nation-states, the enclosure movement, the age of exploration, massive European imports of stolen American gold, the scientific and industrial revolutions, the Crusades, Mongol and Turkish invasions, and other upheavals….
Yet, the endogenous cycle keeps returning, as soon as we find peace, and economic life returns to its even tenors.
What President Warren Harding famously called “normalcy” soon evolved into another boom and a shocking bust, as so often before.
Calm and routine prosperity has never been man’s lot for long: it somehow leads to its own downfall, cycle after cycle…”
The paper has many nuggets of gold buried within the research.
It’s a landmark piece of writing – and a must read for every student of the land cycle.
Included in the research, is a revised version of Homer Hoyt’s 20 stages of the land cycle.
Rising rents, lavish government spending on infrastructure, population growth, excessive land subdivision and redevelopment in outer regions, rising mortgage debt service overtaking the inflow of new capital … so on and so forth.
We’ve already travelled through most of these stages in the 2010-2028 land cycle.
Still to come is the point at which,