Why You Should Stop Worrying About a Collapse

Editor’s note: Your regular Markets & Money editor Katie Johnson is ill this week, so Phil Anderson, editor of Cycles, Trends & Forecasts will be filling in.  

In the late 1800s, European and American cities had a major problem. They were drowning in horse manure. Literally.

It’s one of the things that led to the ubiquitous adoption of the newly invented motorcar.

In SuperFreakonomics, the 2009 book by economist Steven Levitt and journalist Stephen J Dubner, the authors describe how the streets of rapidly-industrialising US cities were congested with horses.

The authors suggest there was something like 200,000 horses in New York City alone, most of whom were pulling a cart or a coach. They trotted one after the other, in some places three abreast, each horse depositing manure at a rate of roughly 15 kilos per day.

It piled high in vacant lots and ‘lined city streets like banks of snow.’ Houses were built to allow homeowners to ‘rise above a sea of manure.

In Rochester, New York, The Department of Health suggested that the city’s yearly horse waste, if collected on a single acre, would make a 175-foot-tall tower.

Salesmen selling the newly invented car were quick to point out the obvious ‘environmental’ benefits of the now ‘horse-less’ carriage.

But there was still one problem with the new contraptions. People didn’t know how to drive them.

Upon getting into a new car, prospective buyers would immediately look for the reigns, instead of gravitating towards the ‘steering wheel’.

And once the vehicle got moving, as you would with a horse, the beginner driver would impulsively shout ‘whoa’ to stop it.

So here we are today with car companies like Ford and General Motors.

General Motors, in January, showed images of a self-driving car. One without a steering wheel or pedals, and one that’s already applied for regulatory permission to be put on US roads by 2019.

It’s the new Cruise AV self-driving car. And it’s coming to a public road near you.

The world is not going to collapse any time soon

You can bank on it. There’s just too much happening in the world presently.

For starters, driverless cars are going to bring unimaginable benefits to all of us. And that’s not to mention how many jobs will be created in the process.

Technological developments aren’t the only indicator of economic strength.

Black Rock, the world’s largest money manager, took in an average of $1.4 bn every single working day in 2017. $1.4 bn every single day. That’s $367 bn for the year.

Do you really think an economy can crash when all of this is happening? More than a third of a trillion going to just one fund manager.

The Financial Times reports two of the largest US Banks — Wells Fargo and JP Morgan Chase — have vowed to share the spoils of recent US tax cuts ‘holding out the prospect of higher investment, better pay and cheaper prices for their services.

Other international banks are enjoying so much prosperity that they’re buying back their own shares to boost returns.

In January, 2018 Swiss investment bank and financial services company UBS Group, the world’s largest wealth manager, has committed to repurchase up to 2 billion Swiss francs worth of its shares.  

And whilst you were reading about all of Facebook’s data breaches, the company quietly committed to train 65,000 French people in digital skills in on-the-job training. The training is aimed at helping women set up businesses and getting the long-term unemployed back to work.

65,000 people. In one go.

In Thailand, the government has announced plans to direct more than AUD$1.4 billion into upskilling programmes, as it tries to revitalise growth and prepare the country for sharper global competition.

That’s in addition to all the other construction announced by Chinese firms, other South East Asian nations and ASEAN in general.

Why do people continue to think with their fears?

Why do we continue to listen to so-called ‘economic experts’ telling us a collapse is imminent? The debts are too high they tell us. There’s not enough growth to keep the global economy moving they tell us. And China must collapse soon too they tell us.

All the things I’ve described for you here have, above all else, one thing in common. They’re all going to increase land value.

By a lot.

This helps make everyone feel far more wealthy. They see the value of their home go up. And the higher up it goes, the more ‘wealthy’ we all feel.

So they buy another, then another…

It will eventually produce yet another boom, followed by another bust. The timing of which isn’t hard to guess.

If you’d like to know just when this is going to happen — and yes this can be forecasted — then click here.

This week in Markets & Money:

On Monday, Selva took a look at Google’s latest endeavour: A virtual assistant. It’s able to take care of life’s banalities, like booking doctors or hairdressers appointments. But Google’s Duplex programme is just their latest AI development. And there is even more advanced AI to come…

To read more, click here.

On Tuesday, Selva delved into what some have called ‘rat poison square’ cryptocurrency. But as Selva writes, how poisonous do crypto’s detractors really think they are? To find out, click here.

What would you rather invest in, property or gold? Since 2009, property has been a stellar investment in both Sydney and Melbourne. But with the recent price slumps, property is not the money-maker it used to be. And as Selva wrote on Wednesday, gold might be the way to go…

To find out why, click here.

Wage growth remains at a record low in Australia. Although there has been incremental rises in sectors like education and healthcare, wage growth in the mining and retail industries fell short. A lot of this has to do with the high level of underemployment in Australia, which as Selva explained on Thursday, could be the underlying reason for our stagnant wages.

To read the full story, click here.

You might be sick of hearing about the Royal Wedding. After all, it only serves to make tabloid headlines. But as Selva wrote on Friday, for those living in the small town of Windsor where the wedding is being held, they are set to make a small fortune off renting their apartments to news crews. And this influx of money and tourism is reminiscent of another major global trend that is currently launching off…

To find out what it is, click here.

Best wishes for 2018,

Phil Anderson,

Trader and Editor of Cycles, Trends & Forecasts


Phillip J Anderson is an Australian academic, author and student of stock, commodity and real estate cycles. Drawing on the work of British economist Fred Harrison and American technical analyst WD Gann, Phil developed his own theory about 18-year real estate cycles in the early 1990s. Since then, Phil has been using cycle theory to guide his own investment decisions — crediting the phenomenon with his decision to move to a 100% cash position in July of 2007, just before the GFC wreaked havoc on the Australian stock market. He has also built up a lucrative property portfolio here and in the UK. Phil is currently predicting a 14-year boom in Australian house prices.


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