Phil here…
I love receiving feedback or questions from subscribers… and today, I’d like to take some time to respond.
As always, if you have a question, feel free to drop me a line at [email protected]. Just know I can’t give personalized investment advice.
First up, a reader from the UK notices some parallels…
Hi Phil, I’ve just read your issue of Cycles Trading about how the U.S. banks and regulators have announced they will support the commercial property sector. It’s funny because (I’m sure you know this already) over here in the UK the banks have just announced that they are going to support families with repayment mortgages by allowing them to temporarily move to “Interest only” payments for six months without penalty due to the increase in interest rates. I’m sure they will review this in six months and extend it again. Keep up the great work!
– Robert V.
Hi, Robert. Thanks for emailing in. Yes, you’ve got it there. That’s what I thought would happen and since some of the stuff going on in the distressed commercial sector is not a systemic thing, it will allow the banks to be more supportive of people who are having problems.
This sort of thing happens with every real estate cycle. If it isn’t commercial, it might’ve been something else. It always strikes people’s attention, but I’m confident the real estate cycle will run 14 years up from the landmark (in 2012) then four years down. It should take us into 2026.
Next, another UK-based reader writes in asking if the UK markets will crash faster than the U.S…
Just finished the book. Eye opener. I’m UK-based, and due to rising interest rates and borrowers coming off cheap deals from under 2% to over 6% for mortgages, UK government asking mortgage companies (banks) to extend mortgage terms and/or allow mortgage holders to move from repayment to interest only mortgages. With an inverted yield curve as well, do you think the UK bust will be quicker than the U.S.?
– Damian C.
Hi, Damian. Thanks for emailing in. Well, the market to watch in regard to timing is always the U.S. market. And I think it’s bouncing back really strongly from a usual, normal year ended in “two.” Reminder – years ended in “2” are always down years in the market.
Based on the 60- and 100-year cycles, it does indicate that the UK and parts of Europe, especially Germany, are more likely to have more difficult issues than what the U.S. will face. (Think back to the 1920s and 1960s.)
So I understand that things can be a little bit difficult in the UK, but since I think this is not systemic and it’s not going to involve too much actual housing, this will allow banks to do all sorts of creative things to support mortgage owners. And I think we’re seeing some of that starting to happen.
There’ll also be situations where I think a lot of English councils will start to work out how to get some distressed commercial buildings repurposed into residential ones. And you mentioned the inverted yield curve …whilst the inverted yield curve can be important, it’s not infallible. The thing you have to do with my view is always overlay everything you see with the real estate cycle.
I’m confident it normally goes 14 years up from the bottom, which was 2012. So that should take us to 2026, especially in the U.S. And if the yield curve inverts around that time, that’s the key one because by then, we’ll already have had 14 years up for the landmark. Again, Damian, thanks for emailing in. I hope that helps with your question.
Finally, one of my favorite questions about the significance of the ancient lunar cycle…
I have a subscription to Archaeology Magazine. The latest issue talks about an ancient lunar cycle which is precisely 18.6 years in length and which strongly influenced the Octagon Earthworks in Newark, Ohio created by the Hopewell people. Does that correspond with your 18.6-year real estate cycle?
– Dale K.
Dale, thanks for emailing in. I love getting questions about the 18.6 cycle and the ancient lunar cycle. Yes, you’re onto it. I recently released a Postcard about this in The Signal. [Readers who aren’t a member of my premium service can check out a subscription here.]
I focus in particular about what happens in the city of Jakarta as it’s built next to the Java Sea. You may have seen already, the Java Sea rises and falls in 9.3-year segments, 9.3 up, 9.3 down. It works very much according to the standstill of the lunar cycle, which is usually the top in the 18.6-year cycle. As far as Jakarta and the Java Sea goes, there’s a bit of work on that.
Ancient civilizations were very aware of this 18.6-year cycle and the north node, the lunar node. The Māori of New Zealand used this cycle for long-term weather forecasting. Some of the Australian indigenous peoples knew that mangroves and the seas would flood at certain times of the year or in certain cycles, often based on the 18.6.
They knew all about this. I haven’t studied it in detail in the U.S., but I would assume that many Indian cultures would’ve understood this as well. Our white forebears (or at least I’m white, my white forebears) often regarded these ancient civilizations as not very intelligent. But I think they knew quite a bit more than we did and it’s a shame we haven’t learned from them.
I hope to put out more information about this 18.6-year cycle, but I enjoy getting questions about the north node. There’s actually a lot more to it, but that is the real estate cycle.
If you want to go and have a look at that, you could also have a look at how the north node – which is an imaginary spot in the sky that the ancients knew about and had measured, which is quite remarkable – that proceeds backwards through the zodiac. The U.S. economy will be different depending on where the north node is in that zodiac. It would be well worth your study, should you want to go down that track… and feel free to ask me further questions. Thanks, Dale, for emailing in.
That’s all for this mailbag edition… if you have questions, send them to me at [email protected]. I’ll answer in a future issue.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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