Introduction: The Looming Economic Catastrophe

The prediction of a Great Depression in 2026 might seem far-fetched to many. However, historical patterns and current economic policies suggest that such an event is not only possible but likely. Fred Foldvary, Ph.D., an economist renowned for his accurate prediction of the 2008 economic depression, outlines the factors leading to this impending crisis.

Historical Patterns of Economic Cycles

The US economy has experienced an 18-year business cycle, marked by periods of booms and busts. This cycle's predictability stems from repetitive economic policies and governmental interventions that distort market operations.

The Role of Real Estate Cycles

One of the primary drivers of these cycles is the real estate market. Subsidies to land values, including cheap credit and fiscal policies that favor landowners, create bubbles. These bubbles eventually burst, leading to economic recessions.

Monetary Policies and Their Consequences

Central banks, particularly the Federal Reserve, play a significant role in these cycles by manipulating interest rates through monetary policies. Lower interest rates lead to increased borrowing and spending, fueling economic expansion and eventually inflation.

Fiscal Policies and Government Spending

Government spending on public goods such as infrastructure and services increases land values, benefiting landowners. However, this spending is often funded by taxing labor and enterprises, leading to economic distortions.

Tax Breaks and Land Speculation

Tax policies in the US provide significant breaks to landowners, encouraging land speculation. These breaks, such as deductions on mortgage interest and capital gains exemptions, contribute to rising land values and market instability.

The Impact of Speculation on Land Prices

Speculators drive up land prices, creating unsustainable price levels. This speculative demand leads to high land prices that ultimately choke economic expansion as real estate investments become unaffordable.

External Economic Shocks

Global economic factors, such as the European debt crisis or geopolitical tensions, can exacerbate these cycles. While these shocks can alter the timing of economic downturns, the underlying domestic policies remain the primary cause.

The Debt Crisis and Financial Instability

The US government's continued accumulation of debt is a critical factor in the predicted 2026 depression. As debt levels rise, the credibility of US bonds will diminish, leading to a financial crisis where the government cannot secure funds to stabilize the economy.

The Inevitability of the 2026 Crash

Given the persistent fiscal and monetary policies over the past 200 years, another economic downturn is inevitable. The 2026 depression is expected to be more severe than the 2008 crisis due to the compounded effects of prolonged government deficits and rising debt levels.

Preventative Measures and Cultural Resistance

While there is still time to avert this crisis, societal and cultural adherence to the status quo makes significant policy changes unlikely. Most economists and policymakers remain committed to the existing system, ignoring the warning signs.

Preparing for the Future

The prediction of a Great Depression in 2026 is not merely a theoretical exercise but a warning based on historical patterns and current economic realities. Understanding these factors is crucial for preparing and possibly mitigating the impacts of this impending economic catastrophe.