There are valuers and real estate agents who understand much more about the future direction of the economy than economists do. Unfortunately, as high priests for the status quo, the gift of forecasting has been given to economists.

I’ve long argued that the real estate market leads and directs the economy through boom and bust and that we could eliminate the boom-bust cycle and have ongoing prosperity. My real estate colleagues tended to consider the cycles are something we simply have to endure.

To achieve my annual 20 CPD points to remain professionaly updated I was required each year, amongst other things, to squirm through a “The State of the Market” presentation by one of the big four bank chief economists’ – i.e. their opinions and charts demonstrating why the prospects for the economy looked pretty good. These included rosy forecasts for the years 1991 and 2008. At one of those two professional sessions–I believe it was the latter–I was actually moved to pose the question to the speaker whether the rampant real estate market might bode poorly for the economy. The premise of my question was not accepted. This is not to suggest that bank economists never get it right.

Unlike the USA, the Rudd/Swan government in Australia proved able to pump the real estate market on the advice of Hank Paulson to avoid recession in 2008/09, and as we had no ‘correction’, so the upcoming Australian collapse promises to be a doozie. In this respect, I’m on board with ‘Avid Commentator’.

Now that governments and their central banks are locked into supporting the current land price bubble (excellent work on this front today, BTW, Martin North! And as for regulators!) I’ve locked 2026 in as the world’s crunch year on the basis of the 18-year Georgist cycle.