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Barron's Is Talking Skyscraper Curse

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Tags Booms and BustsGlobal EconomyMoney and BanksU.S. EconomyBusiness CyclesMoney and Banking

01/21/2016

Barron's is writing about skyscrapers and the Skyscraper Curse:

The Bigger Asia Builds, The Harder It Falls: Could the opening of the world’s second largest building in the heart of Shanghai portend a financial crash?

They also quote me on the subject:

Could there be more to so-called Skyscraper Curse than just fun and games? Let’s hope not as this phenomenon –- and the forces that tend to drive it -- goes truly global, as in the entire international financial system. According to the Council on Tall Buildings and Urban Habitat, the world just reached the 100 super-tall-skyscraper mark (defined as buildings 300 meters and higher). That No. 100 is in New York (432 Park Avenue) might not surprise investors suffering deep losses on Wall Street. Most of these projects are in Asia and the Middle East, though, raising many other what-if’s.

Most interesting is how quickly the projects are popping up –- both literally and figuratively. It took 80 years to get to the first 50 super-tall buildings from 1930 to 2010, but just five years to add the next 50. The next 50 of the future could be completed in even less time. What does this say about the state of the global economy today and where it might be heading? Perhaps nothing. Or, perhaps everything.

Efforts to building the tallest tower are as much about hubris and excess as technology. “Of course, the building of record-setting skyscrapers does not cause world economic crisis,” explains Mark Thornton of the Ludwig von Mises Institute, which espouses the Austrian school of economics. “The records are merely symptoms of the underlying cause of world economic bubbles: sustained artificially low interest rates by central banks.”

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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