The US 1807 36/90/90/54 year asset debt valuation cycle.
Cycles of debt expansion occur causing increases in asset valuations until bad debt cannot be sustained, then bad debt liquidation and asset valuation declination synergistically feed on each other.
1932 ended the US Second Fractal 90 year debt expansion and collapse cycle and November 2021 ended its Third Fractal apogee 90 year finale debt expansion and asset peak valuation cycle.
A 1932 first subfractal 10-11/21/21 year debt expansion cycle ended in 1982 with Volcker’s interest rate hike solution to contain consumer price inflation.
The initial cycle of the 1982 Second Subfractal, secondary to the 1932 to 1982 51 year First Subfractal cycle, was composed of a 13 year 3/7/5 year cycle ending in 1994. The second subcycle to this 13 year base is compose of a series of sub fractals: a 1994 16 year 3/7/8 year cycle ending in 2009 and thereafter 2 subseries; 2/4/5 years and 2/4/4 years. Each cycle unit has ended with an underlying trend line containing all of the preceding valuation lows as bad debt was liquidated.
If the asset debt system maintains its previous consistency, a valuation nonlinear low for the SPX will be about 1000, a 75 % nonlinear decrease from the current valuation. From 2009 the two cycles are each roughly 17/35/35 months.
Expect a riveting hard landing for asset owners as asset valuations fall to long term trend lines.
The idea construct for the theory of saturation macroeconomics is occam’s razor simplistic, money under the given central bank expanding and contracting money supply conditions both via fractional reserve banking and since 2009 QE/QT expansion/constraints … flows to the maximum extent into the most advantaged and leveraged asset classes, that is, the equity and property markets. The progression to the maximal extent and peak valuation and subsequent nonlinear terminal nadir values is fractally time based and in accordance with two eloquently simple 3 and 4 phase time based sequences :: x/2-2.5x/2-2.5x/1.5x and x/2-2.5x/1.5x-2.5x.
For the US hegemony the overall long term sequence is a 4 phase x/2.5x/2.5x/1.5x fractal pattern starting in 1807 and consisting of 36/90/90/54 years with a first fractal equity valuation low in 1842/43, a second fractal low in 1932, a third fractal 90 year high in November 2021, with an expected fourth fractal low in 2074.
From the property bubble low in March 2009, US equities have followed a 5/13/10/7 month pattern (x/2.5x/2x/1.5x); followed by a 3/7/6 month pattern (x/2-2.5x/2x); followed by a 8/17/17 month pattern (x/2x/2x), followed by a 10/26/16 month pattern( x/2.5x/1.5x) and finally a 8/18/11 of 12 month pattern (x/2.5x/1.5x), the the latest fractal sequence starting with both unprecedented money expansion and thereafter money contraction in response to, respectively, the Covid pandemic and resulting consumer commodity and price inflation secondary to extraordinary money expansion.
The daily market valuations represent the real status of saturation investment under the changing central bank lending parameters. Does the real market valuation progression data fit an occam razor’s theoretical mathematical fractal constructs?
From the 22 November 2021 secondary Wilshire peak and Nasdaq key reversal valuation day peak 43 days (7/14/14/11)/ 101 days/102 days/ 52 of 62-63 days (x/2-2.5x/2-2.5x/1.5x).
Expect nonlinear lower low valuation declines over the next ten trading days