The 18.6-year real estate cycle shows up in unexpected places.
Seemingly random and disconnected events push it in the exact direction I expect over hundreds of years of data.
Like clockwork, it repeats time and time again.
And now we’re in the phase I call the “Eleventh Hour.”
It’s the most bullish phase of the cycle.
It happens before the cycle turns.
And it’s one of the best times to be an investor…
This cycle there are several events that, on the surface, may seem disconnected… but they’re all pushing the cycle into this “Eleventh Hour” phase.
Geopolitical tensions between the United States and China… Russia’s invasion of Ukraine… the clean energy revolution…
Here’s how all these events and trends work to advance the cycle.
Trade Says: No Recession, Bullish Times Ahead
The events I mentioned above have been transforming global trade.
After the pandemic-related problems, trade is back with a vengeance… As I expect it to be during the Eleventh Hour, which is the period of sustained euphoria.
The Baltic Dry Index, which measures shipping rates, is down 80% since the pandemic highs.
(As a reminder, lower values mean that shipping goods is cheaper and easier.)
As I said over six months ago:
…global trade is booming. It’s flourishing.
There’s no recession in sight.
Both statements have held up.
Of course, they would, since I based them on decades of research and centuries’ worth of data.
But there’s something else going on…
Trade Continues Propping Up Land Values
Back in January, I said that soaring global trade created an insatiable demand for warehouses.
Recently, I received another confirmation that trade will continue advancing the 18.6-year real estate cycle.
From Bloomberg:
Traffic is surging as the US tries to source more supplies from Mexico, prompting officials in the city of Laredo – the port of entry – to push for $40 million of road enhancements.
Ports are connected to the rest of the shipping infrastructure. Like roads. Which are all part of the land ecosystem.
High shipping volumes mean that some roads need to be upgraded. That drives the value of the land they run across higher.
Better roads means more trucks and higher demand for all sorts of infrastructure to accommodate high shipping volumes.
This is happening everywhere.
Don’t trust the people that tell you that the world is no longer global.
It is. Countries continue to trade with each other and watch eachother’s actions to make sure they stay competitive.
Just look at global interest rates. They rose more or less at the same time, they have plateaued this year, and they’ll go down at the same time as well.
I’m not a conspiracy theorist. But you can’t ignore this “convergence.”
Why is it happening?
Because the 18.6-year cycle is all-encompassing and unstoppable.
Seemingly random events make it tick. And right now, I’m more bullish than I’ve been in years.
Are you?
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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