Summary
Cathy Stacey addresses Australian subscribers who doubt the 18.6-year cycle’s applicability to Australia. She explains: the cycle is US-centric but Australia follows because it has the same rent-enclosure system and credit creation dynamics. She shows All Ords tracking US markets over 1992-2011, with Australian property softer than shares at cycle end. Uses CEC Group (Cairns developer, 30-year history destroyed in 2008 when CBA pulled credit days after renewing a $161M facility) as a concrete example of cycle-end banking behavior.
Key Claims
- The 18.6-year cycle is US-centric but Australia follows due to shared rent-enclosure and credit systems. — confidence: high
- Australian property index declined more softly than shares in 2008/09. — confidence: high
- CEC Group was destroyed when CBA renewed a $161M credit facility then immediately required 50% paydown within 8 months. — confidence: high
- Credit withdrawal at cycle end is a consistent banking behavior pattern. — confidence: high