Reverberations between immoderate land-price cycles and banking cycles

c.   This surge of new demand raises land prices

d.   "Investment demand" for land, always lurking, swells into a major element in the demand for land

e.   With higher prices, buyers need bigger loans and longer terms to buy land. Banks create new deposits to lend on the swollen collateral values.   THIS IS REVERBERATION.   There is no corresponding rise of production, just a rise of land prices. These echoes bounce back and forth.

f.    With longer term loans, loan turnover falls, cutting bank sources for making new loans.

g.   Meantime, sprawl floods the land market in a cartel-like price umbrella effect.   Land is fixed and cannot move to the market, but the market moves to newly accessed lands.   Territorial expansion accompanies bank expansion.

h.   Positive Reverberations turn negative; cumulative crash follows.

9.   Why land prices have to fall

a.   The U.S.A. is vast.   It only seems crowded because of institutional bias to substitute land and capital for labor

b.   Land prices based on irrational exuberance cannot continue because land lasts forever and prices cannot, and never have, approached infinity

10.   When did the 18-year land cycle resume after W.W. II?

a.   The normal peace dividend deferred by Korean War, 1950-53, plus the worldwide Cold War, larger and longer

b.   Minor peace dividend after 1953 opens door to mild prosperity and the "Soaring Sixties", ending in rash of urban riots nationwide, flight from older cities, Viet War, draft riots, Watergate, etc.   These dramatic events overshadow and accompany fall of urban land prices about 18 years after peace dividend of 1953

c.   1971-90, land prices head back up, accelerating after victory in Cold War, Reagan tax cuts, Jarvis' victory over local property taxes, etc.

d.   1990, major post cold-war crash of real estate.   Lessons were quickly forgotten, however

e.   18 years later, Great Crash of 2008.

f.    2026?   Probably, because there are no signs of remorse, of lessons learned.

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