Executive Summary
Foldvary’s mid-cycle positioning paper — written in August 2015 during Phase II expansion, explicitly forecasting the next depression in 2026 (18 years after 2008). The article identifies lending regulations, Fed easy money policy, and US governmental “Affirmatively Furthering Fair Housing” diversity subsidies as contributors to the boom. Crucially states Americans now paying >40% of income in dwelling rentals in major metros — a key cycle-phase indicator per Ricardo/George.
Key Claims
- “For two hundred years, there has been a real estate cycle in the USA with an average duration of 18 years.” — confidence: high
- 2026 prediction: “The 18-year cycle is still on track, which will most probably plunge the economy into its next depression in 2026, 18 years after the Depression of 2008.” — confidence: high
- Mechanism: “The basis of the real estate cycle is the fixed supply of land, which causes land rent to capture much of the gains from economic expansion.”
- Lending-cycle feedback: “As banks fail during a recession, the government tightens lending restrictions, but that then delays the recovery. When the economy is expanding again, government loosens the restrictions, but that accelerates the real estate bubble.”
- Evidence cited (2015): rents rising >4%/yr per Case-Shiller; CA/NYC households paying >40% of income on rent; Jumbo mortgage standards loosening (WSJ 5 Aug 2015).
- Ignorance as cycle cause: “Policy makers, journalists, financial analysts, and even economists see only the appearances — the financial roles of banks, insurance firms… They don’t look literally beneath the financial surface down to the land.”
Predictions / Forecasts
- 2026 US depression — ⏳ PENDING. This is the specific forecast being evaluated by the entire Phase 2 Wiki project.
- Rejection of post-2008 “this time is different” narratives.
Policy Prescription
- Land Value Tax replacement for labor/goods taxation as the only structural fix. — confidence: high
Notable Quotes
“The 18-year cycle is still on track, which will most probably plunge the economy into its next depression in 2026, 18 years after the Depression of 2008.” [Source: foldvary-riding-upswing-2015.md]
“Why the economic experts, policy makers, and the journalists who shape public opinion do not realize this is perhaps the greatest mystery in human history.”
Concepts Referenced
- 18.6-Year Real Estate Cycle — 2026 prediction from 2015
- Land-Credit Feedback Loop — lending cycle amplifier
- Economic Rent — rent absorbs growth
- Property Tax as Cycle Stabilizer
- Geo-Austrian Synthesis
Cross-References
- foldvary-depression-of-2008 — original 1997 prediction
- foldvary-depression-retrospective-2009 — post-mortem
- Reinforces Fred Foldvary as primary theorist of the 18-yr cycle in Austrian/Georgist terms
- Matches harrison-moneyweek-2026-interview-2022 (2026 peak)
[Source: raw/foldvary-riding-upswing-2015.md, fetched 2026-05-03]