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The Man Who Called the Last Two Crashes Says Your House Price Won’t Recover After This One — Transcript

by Fred Harrison · 3,268 words · 654 segments · language en · Watch on YouTube

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0:00Fred, you have famously predicted the
0:02last
0:03two house price crashes. Um
0:06very famously in
0:08your amazing book Boom Bust, but also in
0:11the power in the land and some of your
0:13other books. And you have been accurate,
0:16extremely accurate. Some would say the
0:19only accurate forecaster of these booms.
0:22Now the economic indicators are telling
0:25us that we are entering the next house
0:29price bust. It's It's everything all the
0:33the number of mortgages, the lending.
0:35We're about to enter into a horrendous
0:38recession. Once again, caused by that
0:42speculation in house prices and other
0:44monopoly assets.
0:46But we know everybody's talked about
0:49that, but what
0:51is it going to recover? If people are
0:54going to make money and make investment
0:56decisions, all this kind of stuff. When
0:59is this recovery? And will the recovery
1:03be the same as the recovery you've
1:06predicted in our other
1:08boom bust scenarios?
1:11>> No.
1:12This time
1:14it's different in a
1:16historic manner.
1:19The only comparable
1:21period
1:23with the current times is the two
1:26last
1:28economic revolutions. The first one was
1:32the agricultural revolution and the
1:34second one was the industrial
1:37revolution.
1:39What those revolutions did was to shift
1:43the
1:44source and repository of
1:49the nation's net income, the rents,
1:55away from how things had been
1:57distributed previously to
2:00match the new realities.
2:03So, with the Industrial Revolution,
2:06the value of the rents was shifted from
2:10farmland to urban land.
2:14We are now in a period when the value of
2:18urban land is being shifted to a new
2:22sphere.
2:24Well, where is that sphere?
2:27Well, it's where
2:29the
2:30cash-rich investors are speculating
2:34uh heavily, dangerously, and
2:38the sphere is
2:41the concept is the metaverse.
2:44We're now entering the digital
2:46revolution.
2:49The rents will be shifted from urban
2:52locations to
2:54those locations that accommodate the
2:57digital technologies
3:00where the big bucks will be made in the
3:02future.
3:04So, one consequence of that is that
3:07house prices will not recover
3:11uh as they have done at the end of
3:13previous cycles.
3:15They will go down and uh
3:18they will stay down in a in real terms.
3:24Real prices, real values.
3:28Instead, if you want to speculate in the
3:32capital gains from rents,
3:35you have to speculate in
3:37data centers
3:40and those locations
3:42and in the
3:45natural assets that generate the biggest
3:49returns on rents.
3:51The where are they from?
3:53Well,
3:55uh
3:57they are
3:59there are two sources, and they are both
4:03highways.
4:06The
4:08things that make our phones so useful is
4:12the data that we collect, which comes
4:15from
4:19the near-Earth orbit satellites
4:22that
4:23collect the data from Earth and then
4:26transmit them back
4:28to our phones.
4:31Those That highway
4:34is
4:35extraordinarily
4:36valuable and will become more so in the
4:39future.
4:40The other highway is the ocean floor.
4:44>> Mhm.
4:45>> The
4:45The cables that connect continents that
4:49brings the data
4:51from the other side of the world to my
4:54PC in my in my office at home.
4:58These are generating
5:02huge rents.
5:04Nobody No government is collecting those
5:08rents. Therefore,
5:10the
5:12tech companies, the tech barons, thank
5:15you very much, are collecting
5:18that revenue
5:19for themselves, which is why the richest
5:22people in the world today are sitting in
5:24Silicon Valley.
5:26They control the
5:29digital technologies that are able to
5:32capture. They don't own these highways
5:36on the ocean floors or
5:39the communication channels from the
5:42orbital
5:45satellites,
5:47but because governments don't collect
5:50those rents to fund public services,
5:54the tech barons collect the rents.
5:56>> [clears throat]
5:58>> That's where the value is shifting to,
6:01away from urban locations.
6:04And the other
6:06aspect about the urban locations,
6:09I'm afraid, is a tragic one.
6:12As the humanoids replace humans, wages
6:18will continue to slide in real value,
6:21which means that people have less to be
6:24able to afford to fund shelter
6:28and the public services that they
6:30personally need in the their
6:32communities, so the value of those
6:35locations will continue to decline
6:37further.
6:39Uh
6:40as
6:41corporations sack
6:44employees by the thousand in order to
6:48get this cheap technology, the AI
6:50technology, so
6:53people find themselves unemployed having
6:55to take uh
6:57accept lower wages on lower-skilled
7:00jobs, and that impacts what they can
7:04afford to pay for shelter. So,
7:08the housing market is one of the sites
7:12of the biggest shifts that is now
7:15beginning to take place. And
7:20we have to reconcile ourselves to it.
7:23People who felt that they had
7:24accumulated a lot of capital gains for
7:27their old age or to pass to their
7:30children will be disappointed
7:33uh because that is the reality. We are
7:37now in a revolution
7:40uh
7:41unparalleled in the past.
7:44In the past, with the agricultural
7:47revolution when land was enclosed and
7:49people were turfed off by the the land
7:52barons that came into existence,
7:55people could migrate and create new
7:58lives
7:59uh on other continents even.
8:01And similarly so even with the beginning
8:05of the Industrial Revolution, there was
8:07plenty of uh uh underused land in
8:11Americas and in Australia and New
8:14Zealand where people could migrate to.
8:17Which then left uh
8:20the opportunity for house prices to
8:22start rising both
8:24from in the communities they left and
8:28uh in the places where they migrated to.
8:32But that's no no longer the case. Now
8:35there is nowhere no safe haven to turn
8:38to.
8:39Uh
8:41we are stuck
8:43and the prices of
8:45homes will in real terms will continue
8:49to decline
8:51uh
8:51and
8:52governments will just aggravate that
8:54process. I'm sorry to be so pessimistic,
8:57but
8:58we need to be realistic if we're to
9:03somehow force governments to make the
9:06changes
9:08that rehabilitate our communities,
9:11restore the vitality.
9:13>> Mhm.
9:14>> And at present, as we've seen with the
9:17latest
9:18British budget that was published this
9:20week, uh governments do not have a clue
9:24as to the realities or what to do about
9:27them. And
9:29that that is one of the existential
9:33threats against humanity. Political
9:36paralysis. They just don't know
9:39what's happening
9:41and how to deal with it.
9:43Uh
9:44and only
9:45if people
9:48confronted with the reality of house
9:50prices
9:51insist on a new approach, a new clarity
9:56about the future
9:59which could be great
10:01uh if we knew what we were doing and if
10:03we took control of that future
10:06or it could be really bad. And it's only
10:08if people take insist on taking control,
10:12will
10:13politicians
10:15begin to be realistic.
10:17>> Just to just just to put in a nutshell
10:19what you've you've said
10:21and see if I've got it understood right.
10:24We we live in a world where these
10:27economic rents that are created are one
10:30big pool. And it they go to the biggest
10:33monopoly. At the moment, the biggest
10:35monopoly has been the land under our
10:37feet.
10:38After the industrial where workers
10:40lived, where their offices were.
10:42Previously, it was the agricultural land
10:45that produced our food. That was the
10:46biggest monopoly.
10:48And now we're entering this new digital
10:51age of very smart technology.
10:55It's going to move to that technology.
10:57And all this massive trillion-dollar
11:00speculations
11:02is trying to own that monopoly in the
11:04future. And the pie is only so big. And
11:08that means the money from our house
11:11prices, our land values, our business
11:13locations is going to move to these huge
11:17technology companies that can
11:19successfully
11:20create
11:22a monopoly of some description. Um those
11:26monopolies, you can see them fighting
11:28out. Musk trying to own this near Earth
11:31orbit as you say.
11:32Technology companies wanting regulation
11:35cuz they want to ban competition of
11:38their newly created AI. So you they're
11:41all fighting not for productivity, but
11:45for this monopoly
11:47rent income. And
11:50your beautiful solution, of course, is
11:52instead of taxing our wages and our
11:54investments, you tax that monopoly
11:57value,
11:58which reduces the cost, the damage they
12:01do, and gives us all the public services
12:03we want.
12:05>> Yeah. If from the beginning, governments
12:08had said
12:10to those who were
12:12at the leading edge of AI technology
12:16Well, this is going to be wonderful, a
12:18new asset for humanity.
12:21But, we've got to do it responsibly.
12:24Now, you want to use this spectrum.
12:28Without the spectrum, your new
12:30technology is worth bugger all.
12:34We are going to be collecting the rents
12:37of the highways down which you transmit
12:40the data.
12:43Which means that there will not be a
12:45huge boom in prices of tech barons'
12:50properties.
12:51It will be done incrementally,
12:54responsibly.
12:56With people keeping control of what's
12:58happening.
13:00They didn't do that. They just left the
13:03tech barons to collect
13:05the rents that were
13:08going to be gravitating
13:10out of
13:12human communities into the metaverse
13:16communities.
13:18That's why we have ended up with these
13:21tech guys issuing these terrible
13:25warnings about the prospects of AI
13:30killing off humanity. They're scaring
13:32us.
13:33Now, why are they doing that? Why are
13:35they saying governments should regulate
13:37us?
13:38They are transferring responsibility for
13:41what they are doing onto others.
13:45They're saying governments must regulate
13:47us to prevent the possibility of our
13:50robots destroying humanity. Well, hang
13:53on.
13:54It's your technology. You're responsible
13:57for what might happen.
14:00You will pay the price. But, no, they
14:02don't want that because, you see, the
14:05only way to take control of the new
14:08technology is by controlling
14:12the routes through which they transmit
14:15the data.
14:17How is it controlled? Only if people had
14:20to pay
14:22uh the rents
14:24uh
14:26that accumulate on the highways
14:30the
14:31the the cables crossing the oceans and
14:35the
14:36uh spectrum highways, will sanity
14:40prevail?
14:41Think about what might have happened
14:43with
14:46uh the new generation that's now
14:49effectively lost. They spend all their
14:51time gawking at their phones
14:55uh and they're they are beginning to
14:58lose their minds. There's an erosion of
15:01their capacity to think critically.
15:06If the parents had to pay the full rents
15:11uh that were being used
15:14by their kids on their smartphones, they
15:18would clamp down on it. They would say,
15:20"We can't afford you to spend 8 hours
15:23gawking at the telephone because we're
15:26paying the uh the rents that are
15:28clocking up every minute." Oh, so now
15:32the children's
15:34time spent on their phones would be
15:36controlled by responsible parental
15:39behavior.
15:41But that's not happened
15:43because
15:45the rents are being
15:48accumulated by the
15:51the tech barons and there is no ultimate
15:56responsibility
15:58which they the tech industry is trying
16:01to shift onto others as a way of
16:04avoiding any discussion on how sanity
16:08can be brought to prevail in the AI
16:12industry.
16:14So it's a con, this "We want governments
16:17to regulate us." It's their way of
16:19shifting the debate away from themselves
16:23and onto the regulations, which
16:25ultimately don't work. Uh and if they
16:28don't if if they if there are failures,
16:31we we blame the government, not the tech
16:33barons.
16:35>> Mhm.
16:36One of the things we were discussing
16:37earlier was
16:39the the new AI engines, not the public
16:43ones we get to use chat GPT and tropic
16:46and that. But the the the darker AI
16:50engines of Palantir.
16:53Um they are starting to be able to
16:56understand and manipulate humans.
16:59Governments are paying a fortune for
17:00them. Militaries are using them to
17:02predict, you know, battlefield behavior
17:05and social behavior.
17:08If we if we took the rents of that, how
17:11do we control that asymmetry of
17:14information between powerful and
17:17unpowerful people?
17:19>> Well,
17:20ultimately, the only way we're going to
17:22get the shift in the way governments
17:24raise their revenue is if
17:27we we we redefine the that concept of
17:31personal responsibility.
17:34Put personal and social responsibility.
17:38And at the moment in our society,
17:41we are a completely irresponsible
17:45society.
17:46It's an inhuman society.
17:49When I watch the television news on how
17:53the barbarians in Krem- in the Kremlin
17:56are sending drones to smash
18:00uh
18:01family apartments, this is not human
18:04behavior.
18:06Uh
18:06how did we get to this state of affairs?
18:10We need to re-
18:14re-understand
18:16the nature of personal
18:19and social responsibilities.
18:21Once we start talking in those terms, we
18:25now are able to evaluate
18:28uh
18:29what is acceptable.
18:31At the moment, we're accepting
18:34uh the prospect of using
18:37uh
18:38hu- robots to kill people in place of
18:41soldiers, so that soldiers don't die on
18:44the battlefield. Let's send the robots
18:46in doing it. And we're accepting that.
18:49But this is it inhuman.
18:52So, there needs to be a global
18:55revolution in what it means to be human
18:58being. Mhm. It's astonishing, but
19:02it really boils down to
19:05that fundamental issue. What does it
19:07mean to be human?
19:10And if we can arrive at a agreement on
19:14what it means to be human, which means
19:17being res- but held accountable for our
19:20behavior,
19:22then
19:23everything changes.
19:25Uh
19:26and the kind of stuff that you just
19:29referred to would not be tolerated.
19:31>> Mhm.
19:32>> It would be outlawed on a global scale,
19:35and those who abused the power of this
19:39technology would just be ostracized.
19:42But instead of that happening, what are
19:44we seeing now?
19:46The president of America
19:48is
19:49doing deals with the
19:51the criminal in the Kremlin
19:54uh
19:55for oil rents, which he wants to attract
19:58into America,
19:59which licenses
20:02the barbarians in Russia
20:04to continue behaving in
20:06an irrespons- an inhuman, irresponsible
20:10way.
20:11In fact, uh one of the president's uh
20:14diplomats calls
20:16Putin a humanitarian.
20:19That's his concept
20:21uh of huma- humanism.
20:24>> Mhm.
20:24>> The barbarian that's using drones to
20:28murder,
20:29uh, mothers and children in Ukraine.
20:34It's
20:36we go on about the need to change the
20:38fiscal system,
20:40but fundamentally, we have to begin to
20:43rethink what what it means to be a human
20:46being.
20:47>> Absolutely.
20:50Economic rents,
20:52they're available to be privatized.
20:55So, on every level, our politicians,
20:58um, Trump and others, they can make
21:02billions of dollars through this ability
21:05to privatize oil
21:07mineral wealth or land. But, every
21:10strata of us, we we can make a lot of
21:13money by getting a hold of these
21:15economic rents. If they weren't
21:17available, there would be no incentive
21:19for people to behave in these despicable
21:21manners.
21:23So, it's a chicken and egg. How do we
21:25get round the problem that the people
21:28who do terrible things are rewarded?
21:31And the society, if there was no reward,
21:35there wouldn't be the incentive for them
21:37to do these terrible things.
21:39So, how are we going to crack that
21:42problem because their wealth stops us
21:45from changing the system?
21:46>> Well,
21:49nothing's going to stop humans producing
21:52the net income, the the rents. That's an
21:56automatic
21:57part of what it means to be human.
22:00[snorts]
22:01Uh,
22:02we now behave in an inhuman way because
22:06we've all individually lost control
22:10over [clears throat]
22:12that energy, the what which is what
22:16rents represent, the human energy that
22:20we all pull to create the energy to make
22:24us what we are.
22:26In
22:28in the evolutionary period,
22:31every individual in what were small
22:34communities made sure that there was no
22:37cheating.
22:38>> Mhm.
22:38>> They could intervene personally and say,
22:41"Come off it. You're you're not playing
22:43by the rules of the game. Stop
22:46cheating." And anybody who tried to
22:48cheat would be put to shame. But we lost
22:52the personal involvement
22:55uh
22:56once we gravitated to the agricultural
23:00revolution, because now we built urban
23:03areas and we lost contact with the
23:06people who were representing us.
23:09We can't blame people back then for not
23:12knowing how to control their destiny.
23:16Uh and at the beginning of the
23:19Industrial Revolution, there wasn't a
23:22clear uh understanding of what it would
23:25take.
23:27If we all understood that we all have a
23:32share of this net income, it belongs to
23:36all of us. And if we collected this uh
23:39all for the public good, and if we held
23:42our representatives accountable for
23:46their behavior in in a way that we don't
23:49do now,
23:51uh
23:53then things will go wrong. But by
23:56coming to understand that each and every
23:59one of us has a share in ownership and
24:04responsibility for this net income, this
24:08rent,
24:10and that we are personally involved in
24:13how those rents are spent,
24:16then we would be very active in making
24:19sure that the people we appoint to
24:22represent us
24:24are held accountable if they misbehave.
24:28We don't do that now because we've just
24:31separated
24:33ourselves from
24:35that stream of value which we now think
24:39actually just belongs to those who have
24:42who own property rights.
24:44>> Mhm.
24:44>> So,
24:45and during during the last 50 years
24:48since Margaret Thatcher,
24:51those of us who own homes think, "Oh,
24:54these rents in the form of capital gains
24:56to our homes belong to us. It's our
24:58property." Well, no the bloody hell it's
25:01not true.
25:04That that those capital gains from the
25:06location values is the property of
25:10everybody in the community.
25:14But we don't understand that, which is
25:16why
25:19we continue with the absurd politics
25:23and economics that we have today.
25:26>> Mhm.
25:26>> And it's only by coming to
25:29terms with the fact that
25:31actually we all own rents, we are all
25:35responsible for how it's spent,
25:38that we need to be involved,
25:41uh hold the people who actually spend
25:46those rents on our behalf are held
25:48accountable for what they do. Only then
25:53will we
25:54impose the discipline
25:57uh that leads to us having the free
26:00choices on how to live our lives.
26:04So,
26:06the conclude One of the conclusions we
26:08reach is that
26:09a home should be a home for a family
26:13providing security and stability for
26:17every family in the land, not just for
26:19those who happen to be privileged to own
26:22the title deeds to the location where
26:25their houses are standing.
26:31A home is not a financial asset.
26:35It is the the
26:39habitation, the
26:42physical representation of the security
26:47and stability
26:48that a family needs with children
26:50growing up, with
26:53grandparents growing old. It should be a
26:56a place of security,
26:59not financial gain. And if if we can
27:04come to terms with the change in viewing
27:08this asset
27:10as a place
27:13for human beings to live in
27:15in a secure way, rather than to make
27:18money,
27:20then we would be free to go and make
27:23money in those commercial activities
27:27that actually add value to the
27:30uh
27:30welfare of the community, where we can
27:33make profits that are not taxed.
27:37Because we are pooling the location
27:40values where we choose to live uh into
27:44the public purse
27:46for the benefit of the whole community.
27:49>> Absolutely, Fred. We are We are living
27:53in a world of cheats and thieves and one
27:56thief is stealing from the other. And
28:00the only way we can solve it is by
28:02socializing the economic rent, the
28:05profits the thieves search for.
28:07>> Exactly. Exactly. So, the cheating that
28:10began in antiquity, when people didn't
28:13understand
28:15and they didn't have the knowledge or
28:17the institutions
28:18to block the cheating, we now have the
28:21knowledge and the institutions where we
28:24can make sure that with the digital
28:27revolution,
28:28there will be no more cheating.
28:31Because if we allow the cheating to
28:34continue into the digital age, it will
28:38be the robots knocking on our doors. We
28:41will lose our homes, many of us
28:44literally.
28:45Uh and we only have our ourselves to
28:48blame.
28:50>> Mhm.
28:51Well, on a dark note,
28:54let's tell everybody to get active
28:57activating the consciousness. Talk to
29:00friends, develop a knowledge of these
29:05cheaters and AI,
29:07and
29:09there is a solution to the world's
29:11problems.
29:12Yep. Thanks for that.
29:14>> Thank you, Peter.

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