My brief summary of “where we’re at” for those following this website.
Once it’s understood that when land rent is NOT captured publicly (as advised by classical economists including Adam Smith, David Ricardo, John Stuart Mill, Henry George), then the private capture of land rent creates (a) monopolies–especially in banking, which morphs from servant to master–and (b) asset bubbles. These have the effect of reducing wages. American real wage levels have not yet returned to those that existed in 1972. So let’s confirm where we are, keeping in mind that the 18-year Georgist property cycle has gone (and will go) pretty well like this: 1954; 1972; 1990; 2008; (2026):
- President Nixon was forced to take America off the gold standard in 1971 when French President Charles de Gaulle called the US bluff, exchanging US dollar holdings in France for US gold during the Vietnam War.
- The brakes were off, so it became easier for banks to ‘financialize’ land and asset markets …. at repetitive times with gay abandon.
- At the outset of the 1970s the world experienced an enormous real estate bubble, which peaked in 1972-3 and burst into recession.
- There was a mid-term land boom in 1981, and another bubble in 1988-9, both of which broke into recessions.
- From 1996, the bubble of all bubbles developed. It broke across Europe and America in 2007-8. On advice from Hank Paulson in the US (to Australia’s Treasurer Wayne Swan to try to keep the bubble inflated) Australia’s Rudd government spent more than $50 billion in doing so ….. and it ‘worked’.
- As Australia hasn’t had a recession since the early 1990s and has had an ongoing real estate bubble since 1996, I therefore expect a serious mid-term recession by the end of 2019, followed by worldwide financial depression from 2025.
That’s about it, folks!