How Skyscrapers Predict Market Crashes

People visiting the Empire State Building often ask if the 360,000-tonne giant is causing the tower to sink.

It’s funny they say that.

In the very early 1800s, a Manhattan carpenter named Lozier came to the startling conclusion that the city was dangerously lopsided. Too many buildings on one side meant that the land was in danger of sinking.

If any more went up, he said, the island would sink into the Hudson River.

Somehow he convinced the city’s mayor to cut a chunk of land off. Tow it down the Hudson River and reattach it to the Southern tip. Telling anyone listening that it would ‘redistribute’ the island’s weight.

Clearly impressed with Lozier’s ingenuity, the mayor wanted the work to commence at once. Wads of cash went from the City Treasury to Lozier.

Lozier sought workers to help him with his plan. More than 500 showed up, braving the winter cold to wait for the boss.

They waited a long time. Lozier never showed. Instead, he ran away with the city’s money.

Phil Anderson, editor of Cycles, Trends and Forecasts, says that tall buildings can tell us an awful lot about the stock market and real estate cycle.

He believes the current currency cycle began in 2010. However, what’s unusual about this cycle is how many tall buildings are on the drawing board so early into it.

Which means we could be seeing an incredible building boom across the world.

Take a look at some of the record tall buildings due to open by 2020:

  • Kingdom Tower in Saudi Arabia (world’s tallest, due to open 2020)
  • Suzhou Zhongan Center (China’s tallest, due to open 2020)
  • 1 Vanderbuilt, New York (second tallest in New York, due to open 2020)
  • Vista Tower, Chicago (third tallest in Chicago, due to open 2020)
  • Australia 108 (Melbourne’s tallest, due to open 2020)

There are plenty more major developments due around this time too.

However, what we are starting to see is a mid-cycle peak. Phil explains that this has happened all throughout history. But most people are likely to mistake it for a market top. When, in reality, it may only be a half-way point.

It’s an example of history repeating itself, says Phil. We’re now getting all the classic signs of an economy starting to overheat, just as in 1999, the late 1970s, and all the times before that.

An example of that is the ridiculous prices paid for luxury goods.

Paul Newman’s Rolex Daytona sold for $17.8 million last month. That’s a record for a wristwatch at auction.

Paris Hilton is making a comeback. She was all the rage back in 2007 when everyone wanted a piece of her.

Ms Hilton, the celebrity famous for being famous, joined the initial coin offering (ICO) bandwagon a couple of months ago. She announced on Twitter that she was the proud owner of a new cryptocurrency called Lydian.

There are a couple of exciting new initial public offerings (IPOs) coming to the market over the next year. Uber, the US ride-sharing company is one. The Saudi Aramco is another.

Believe it or not, these things are an example that we are only half-way through Phil’s real estate cycle.

The real danger, as Phil explains in Cycles, Trends and Forecasts, is the peak, which he says is due around 2026.

Let’s take a look at some projects either under development or proposed that are due around 2026:

  • Melbourne Metro Rail Tunnel (due 2026)
  • Tower 1, Basra, Iraq (world’s tallest, due 2026)
  • Japan’s Tallest Building (due 2027)

Keep an eye out for more ‘tall buildings’ and mega developments. Once you see the cycle at work, you will never look at the world the same way again.

Kind regards,

Shae Russell,
Editor, Markets & Money

Shae Russell started out in financial markets more than a decade ago. Working with a derivative brokering firm, she helped clients understand derivative markets, as well as teaching them the basics of technical analysis. Since joining Port Phillip Publishing eight years ago, Shae has worked across a number of publications. She holds the record for the highest-returning stock recommendation, in which a microcap stock returned over 1,200% in six months. Ask her about it, and she won’t stop yapping on. For the past two years, Shae has worked alongside Jim Rickards as his Australian analyst, translating global macro trends for Aussie investors, and how they can take advantage of these trends. Drawing on her extensive experience, Shae is the lead editor of Markets & Money. Each day, Shae looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

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