The one thing we learn from history is that we don’t learn from history.
In his book, The Secret Life of Real Estate and Banking, Phil Anderson illustrates how each phase of the 18.6 year cycle repeats, with ‘nobody seeing it coming’, the only variation being the new ways bankers find to avoid the regulations put in place after each collapse to ensure ‘it will never happen again’.
We’ve seen it in the US with the Dodd-Frank Act being repealed in 2018.
And now, on Friday the 25th September 2020 Australia’s banking regulations also wound back.
Source – Australian Financial Review, 24 September 2020
We have been following the Australian banking and credit regulations for some time.
In fact it was in 2017 that the then Federal Treasurer Scott Morrison told us that ‘easier and cheaper credit’ was coming.
It was in our face.
No-one can say it wasn’t. Did you see it?
If you do not yet understand how the 18.6 year cycle repeats, the events in Australia in this first half of the cycle would have been confusing.
What’s more disturbing is that this confusion would have caused decisions to be made relating to your financial future at precisely the wrong time.
Are you starting to see it now? I do hope so.
Best wishes
Cathryn Stacey
and Your Property Sharemarket Economics team