When the first edition appeared in 2005, the consensus among forecasters was that the boom in house prices would cool to an annual 2 or 3% rise over the following years. As predicted by the author, however, prices continued to rise by more than 10% well into 2007. Basing his argument on a study of property markets over the last 200 years, Harrison warns of the danger to banks, business and jobs of ignoring a remarkably regular 18-year cycle. Recent events have proved the accuracy of his prediction. He accuses Gordon Brown of giving people a false sense of security by his oft repeated claim, last made in his 2007 Budget speech, that 'we will never return to the old boom and bust'. Alan Greenspan in the US encouraged a similar belief which led to the risky sub-prime mortgage spree. The reason for the instability, Harrison explains, is not the housing market itself but the land market on which all buildings stand. Land is in fixed supply - as Mark Twain noted: 'They're not making any more of it'. Therefore, as the demand for land for new homes and offices rises with population growth and economic expansion, market forces, which normally increase supply to reduce prices, have the reverse effect: prices rise. This encourages speculation, with banks lending more against escalating asset values and reinforcing the upward spiral. Under existing government policies, the only way land prices can be brought back to affordable levels is a slump, undermining the banking system and causing widespread unemployment and repossessions. This is what happened with the collapse of US sub-prime mortgages. The author argues that monetary policy and bank regulation only have a marginal impact on land speculation. The only way of neutralising the boom bust cycle and creating conditions of economic stability is a fundamental reform of the tax system.
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Review
'...for anyone seeking to understand the vagaries of the housing market, this is a fascinating read' -- Jeff Howell, SUNDAY TELEGRAPH
'Boom Bust should be compulsory reading for all those in the Treasury and particularly Gordon Brown.' -- Mark Dampier, The Independent, October 2008
'Harrison never wavered from his prediction that the housing boom would end in a spell of mania in 2007, followed by bust in 2008.'
-- Spectator Business, October 2008.
'The man who predicted today's housing woes - ten years ago ... does Harrison really know something we don't?'
-- Mail on Sunday, 20 January 2008
'[Harrison] does make a case for the existence of an 18-year business cycle, which he links to speculation in the property market' -- Samuel Brittan, FINANCIAL TIMES
In 2005 Harrison published Boom Bust, warning that the
property market is subject to a sharp downturn at the end of a regular 18-year cycle. The UK housing market started collapsing in November 2007, followed by the recession Harrison had forecast.
-- Michael Hudson, Professor of Economics at the University of Missouri, in the MPRA Review June 2009
'Boom Bust should be compulsory reading for all those in the Treasury and particularly Gordon Brown.' -- Mark Dampier, The Independent, October 2008
'Harrison never wavered from his prediction that the housing boom would end in a spell of mania in 2007, followed by bust in 2008.'
-- Spectator Business, October 2008.
'The man who predicted today's housing woes - ten years ago ... does Harrison really know something we don't?'
-- Mail on Sunday, 20 January 2008
'[Harrison] does make a case for the existence of an 18-year business cycle, which he links to speculation in the property market' -- Samuel Brittan, FINANCIAL TIMES
In 2005 Harrison published Boom Bust, warning that the
property market is subject to a sharp downturn at the end of a regular 18-year cycle. The UK housing market started collapsing in November 2007, followed by the recession Harrison had forecast.
-- Michael Hudson, Professor of Economics at the University of Missouri, in the MPRA Review June 2009
Review
'[Harrison] does make a case for the existence of an 18-year business cycle, which he links to speculation in the property market'
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Customer Reviews
Most Helpful Customer Reviews
10 of 10 people found the following review helpful
By Foxylock
TOP 1000 REVIEWER
Format:Paperback
I found the predictions contained in this book to be uncannily correct and even a bit frightening. Fred Harrison proves the existence of an 18 year business cycle which coincides with the boom bust phenomenon that sweeps the global markets. With startling accuracy Harrison shows us that this has been happening for centuries and our governments are completely impotent. In the final chapter Harrison puts forward his own solution to the boom bust cycle which would no doubt raise a few eyebrows, but maybe we need boldness in the face of adversity. Economists and politicians take note !!
9 of 9 people found the following review helpful
Format:Paperback
I read this book in early 2006 - Hardcover. In hindsight, it is a horoscope for our future financial wellbeing. It predicted the banking crisis, the fall of banks and corporations previously perceived as too big to fail, with great insight and accuracy.
It is well written with easy chunks that allow the following of threads, historical references, and explainations of financial terms.
Read this now and protect your future wealth.
It is well written with easy chunks that allow the following of threads, historical references, and explainations of financial terms.
Read this now and protect your future wealth.
9 of 9 people found the following review helpful
Format:Paperback
Can't believe this book was written in 2005, it's all come true - why did Fred Harrison know what was going to happen and our Government didn't? or did they...?
12 of 13 people found the following review helpful
By Mimi in London
VINE™ VOICE
Format:Paperback
I read this book 6 months ago, and in the past few months have started to see signs that suggest the author is correct in his suppositions. An essential read for anyone considering buying a property in 2007-2008.
16 of 18 people found the following review helpful
By Valiant
Format:Paperback
A very interesting read. I purchased this book in mid 2006 and so far everything that was predicted has come true. According to Harrison we are in for two tough years in the property market. 2008 and 2009 will see a downturn, however, come 2010 the market will once again turn. Currently I would love to move into a larger house but believe you me until January 2010 I'm staying put.
11 of 13 people found the following review helpful
By Dave
Format:Hardcover
With UK house prices now crashing and many experts now foreseeing falls of up to 40% it looks like Fred Harrison is spot on with his predictions so far. He seems to be one of the few who have got the timing of the bubble bursting just right.
1 of 1 people found the following review helpful
By Michael
Format:Paperback
Very informative and accurate book. As always is the case with books by this author with great intellectual capabilities that must be reserved a place in history among great economists.
It has wide implications too for economics like efficient market hypothesis. Here we find we are regulated by an objective law relating to the internally design of property, We are part of a horror movie where we all make individual subjective evaluations on the market but only to choose different paths that all leads to the same destination. We are always under way to the next crisis.
Remember to pick up his Power in the land (1983). It contains much valuable information too. I liked the part about debunking the so called oil crisis (OPEC) in 74'. It was the land market at the top of the 18 year cycle that gave the full devasting effect to western economies. The western economies were already sliding in to recession well before. Also Marxist ignored this by explaining it was a crisis of wages squeezing profits. The fact that the rents squeezed profits did not conform to their purpose of class antagonism between capital and labour.
It has wide implications too for economics like efficient market hypothesis. Here we find we are regulated by an objective law relating to the internally design of property, We are part of a horror movie where we all make individual subjective evaluations on the market but only to choose different paths that all leads to the same destination. We are always under way to the next crisis.
Remember to pick up his Power in the land (1983). It contains much valuable information too. I liked the part about debunking the so called oil crisis (OPEC) in 74'. It was the land market at the top of the 18 year cycle that gave the full devasting effect to western economies. The western economies were already sliding in to recession well before. Also Marxist ignored this by explaining it was a crisis of wages squeezing profits. The fact that the rents squeezed profits did not conform to their purpose of class antagonism between capital and labour.
1 of 1 people found the following review helpful
By Mrryadair
Format:Paperback
I first read this book in 2006 and have just recently returned to reread it. This should be the "bible" for anyone in the real estate sector. The fundamental loop we have been trapped in for the last 400 years is quite remarkable and set's out the pathway on how to time your run to make millions - or lose them.
Simple, accurate, brilliant.
Simple, accurate, brilliant.
Most Recent Customer Reviews
3.0 out of 5 stars
Nothing New under the Sun (& Moon...)
I could be wrong, but all he appears to be using is an amendment of Louise McWhirter's astrological findings from the 1930s, which predicted a recession in 2008/09. Read more
Published on 17 Sep 2009 by wu-wei
3.0 out of 5 stars
Doesn't add up to much
Nobody seemed to provide any sort of accurate prediction as to when the housing bubble would pop in the UK. Except that is Fred Harrison. Read more
Published on 10 Jun 2009 by Dr Bob
1.0 out of 5 stars
High on opinions, Low on substance - buy something else
hmmm. not an impressive read. The Author alleges to build a case to 'prove' his 18 year economic cycle theory. The 'proof' offered is poor and not convincing. Read more
Published on 9 Mar 2008 by J. Tidmarsh
4.0 out of 5 stars
The coming depression - how low will he go ?
As a prominent proponent of the Land Value Tax it is intriguing to find that Fred Harrison comes down on the side of both private ownership and economic growth. Read more
Published on 21 Aug 2006 by CROISSANT5
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