A 2003 Prediction: a Historical Equity Devaluation in September 2012: The Nikkei 1987: 57/129/114 month Growth Fractal :: x/2-2.5x/2x ?

Welcome to the small alcove for the advancement of cause and effect saturation macroeconomics. This site pursues the hypothesis that the nature of market valuations and economic cycles is both causal and quantitatively decipherable. Valuations confirm to fractal cyclical patterns that can be recognized, interpreted in conjunction with data emanating from the macroeconomic system, and used with short term and long-term predicative power. Information from this site is not intended to be construed as investment advice or as an investment tool. This site has been constructed because of the expected inevitability of a major sudden phase transition to occur at the conclusion of a grand 140 plus-year second fractal cycle starting in 1858. For the masses this phase transition will occur both very unexpectedly and very suddenly. Approaching the global macro economy from such a causal and fractal Weltanschauung may help those considering further debt obligation and those in position of formulating future interest rate and monetary policy.

The cyclical nature of the macroeconomic system operates by causality rather than chance. Valuations of assets are controlled chiefly by interest rates – the cost of money. Lowering nominal interest rates, below asset inflation controlling rates, leads to macro economical disequilibria with excessive money expansion through increased borrowing. This expansion engenders unbalanced forward consumption, consumer saturation, overproduction, and inflation of assets and consumer items. With the addition of ongoing wages of the consumer masses, these oppositional elements are countervailing, and periodic macroeconomic imbalances will self correct.    

Market overvaluation saturation and decay corrections to new lower saturation points occur in a fractal manner. Cyclical patterns can readily be identified on valuation charts denominated in minutely, hourly, daily, weekly, monthly, and yearly units. The transitional asymptote of overvaluation saturation curves are followed by decay curves which bring market valuations to lowered levels where intelligent buyers reenter the market.    

Human psychology is a decidedly lagging indicator and follows as an end effect of the mechanistic saturation and decay evolutions in the market. Market contrarians understand these turning points and anticipate the directional changes of the markets based both on market asymptotic overvaluation saturation areas or decay end-point saturation characteristics and counter intuitively by recognizing the lagging psychological parameters of extreme optimism or pessimism in reaction to the mechanistic respective high and low points.    

Both the degree of valuation and the cyclical time course of valuation evolutions appear to conform to range bound near quantum-like units and quantum related Fibonacci numbers. While the absolute degree of valuation is influenced by the absolute interest rate, the percentage or proportionality changes of valuations from highs to lows and lengths of time to decay and intra-cycle nodal points appear to conform to these range bound near quantum units.    

The ideal growth fractal time sequence is X, 2.5X, 2X and 1.5-1.6X. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x. The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point. The last 1.5-1.6X cycle is primarily a decay cycle interrupted with a mid area growth period. Near ideal fractal cycles can be seen in the trading valuations of many commodities and individual stocks. Most of the cycles are caricatures of the ideal and conform to Gompertz mathematical type saturation and decay curves.  

 G. Lammert

This page was last updated on 15-May-2005 01:21:59 PM .

Fractal Asset Debt Economics: A Proven Patterned Science: The Hegemonic US Bond: The last 21 August to 13 September x/2-2.5x/1.5x Base Fractal Before Equity and Commodity Nonlinear Devaluation

From 1981 the number of US dollars and US dollar denominated sovereign held by the world has exponentialized. US dollar currency and US debt have produced assets – all three of which – have become collateral  for secondary bad  debt which by definition will not be repaid. In growing mass of US currency, US debt, and collateralized assets,  US interests have trended lower and lower with those holding US debt having steady increases in the value of their holdings. After an initiating fractal from 1981 to 1984, a 5/13/8 year base fractal was completed in 2007. This was followed by an initiating curvilinear base blow-off  fractal starting in April 2007 and completed on 21 August 2012 , also in the recurrent base fractal form of 13/32/19 months :: x/2.5x/1.5x resulting in multi year lower and lower interest rates going forward.

The long term valuation growth of held US debt is just beginning.

As the hegemonic currency all the world dollar and US sovereign debt holders have  a vested  interest in maintaining the survival of the dollar as a currency. So many dollars are owned by so many of the world’s population and sovereigns.

And as the US treasury has the authority to issue money, US sovereign debt will always be honored.

US debt is the asset-debt system’s premiere speculator asset as the world in an extremely saturated position of debt, overproduced and overvalued assets undergoing a combimnation of bad debt default and further massive asset valuation decline.

At this operational point of asset debt saturation macroeconomics. the one thing that has high certainty is that US debt will re repaid.

13 September 2012 : The SPX’s 21 August’s 1426.68 Lower High and Commodity-Equity Class Asset-Debt System’s Pre Crash Day

The Hegemonic US’s long term bonds will complete a 21 August 2012 4/9/6 :: x/2-2.5x/1.5x day base fractal on 13 September 2012.  This fractal pattern is identical to a 21 August 2012 completed 4/9/6 month US Long term bond fractal series which composed the terminal portion of a 2007 curvi-linear 13/32/19 month  :: x/2.5x/1.5x base fractal.  The 21 August 2012 completed 4/9/6 month series forms the base for an approximately 32-34 month extension to historically low US long term interest rates. This will match a countervailing similar monthly devaluation pattern for  equities which will approximate the time between the high to low valuation devolutions occurring  from 1929 to 1932 and from 2000 to 2003. The 21 August to 13 September 2012 4/9/6 day base fractal is the incipient part of that 32-34 month US bond second fractal series.

The  US Bond 4/9/6 month :: x/2-2.5x/1.5x monthly first base fractal completion on 21 August 2012 exactly matched the 21 August 2012 SPX’s key reversal day with a minutely gapped high to 1426.68 and ending on the low of the day. 1426.68 exceeds the SPX’s previous highs of 2 April 2012  (but not the composite Wilshire which includes the Nasdaq) and is  final lower secondary high to the SPX on 11 October 2007 with a similar minutely gapped high and ending near the low of the day.

11 October 2007 was prospectively predicted as the final asset-debt system Wilshire Equity Class high occurring  as the 40th day  of a reflexic 20/50/40 day :: x/2.5x/2x Lammert fractal series.

From The Huffington Post …theeconomicfractalist on 10 October 2007

Australian Dollar Hits 23-Year High Against US
Commented Oct 10, 2007 at 22:23:35 in Business
“Generational US Consumer Saturation Macroeconomics – 11 October 2007: the Top Valuation Day for the Wilshire ?; near the final weekly low for the US dollar?

Watch for an opening day trading gap to the all time high for the Wilshire on 11 October with a closing at the low of the day. While the US dollar will likely be lower against other fiats and gold, it is near its multiweekly nadir.”

What is telling about the October 2007 nominal SPX nominal high verses the August 2012 secondary high is that 30 year bond was 200 basis lower in 2012 than 2007. Even so the 31 August 2012 SPX is 150 points  lower than it 11 October 2007  nominal high.

This is a weak Equity market in spite of historically low interest rates.

The 4/9/6 month base fractal completes a larger 13/32/(3)+(4/9/6) or 13/32/19 month :: x/2.5x/1.5x US bond blow-off fractal series beginning in 2007.

The Equity  Commodity crash is expected to occur within a trading day or two of Friday 14 September 2012.

The Wilshire 11 October 2007 Nominal High Was Predicted by Saturation Macroeconomics: The Wilshire’s 11 October 2007 Sister: 21 August 2012


The Wilshire’s nominal high on 11 October 2007 was prospectively predicted by the patterned science of Saturation Macroeconomics  occurring as the 40th day of an ideal 20/50/40 day :: x/2.5x/2x reflexic fractal series.

11 October 2007 had a minutely gap progression to its peak and ended near the low of the day.

Observe Its  21 August’s 2012 identical gapped pattern to a final (lower) high and ending near the low of the day.

The previously predicted high of 23 August lies in the cup of the four day base fractal 21-24 August 2012.

The goal of this website is to prove that the one quadrillion debt-asset system macroeconomy has the self assembly characteristics exactly similar to physics, chemistry, biochemistry, and the more complex self assembly organic science of biology.
The goal of this site is to prove that asset debt saturation macroeconomics is likewise a science with an equivalence and precision in the elegance of its patterned behavior to its sister sciences.
And why should there not be an ideal mathematical quantum growth and decay pattern of the asset valuations of the forward credit based macroeconomy – a debt-asset macroeconomic system  that has such a well known and a long history of operation by  qualitative self limiting feedback dynamics?
Near the debt-asset system qualitative peak saturation area  where the system is replete with asset supply, bad debt saturation, consumer demand saturation, and asset valuation saturation, the following qualitatively has and is transpiring….
Too much credit elaboration(worthy creditor population saturation), too much many asset produced(asset supply saturation), too much forward consumption(consumer population and demand  saturation), too high of asset valuations (asset price saturation), less need for further production, less needed jobs to support previous accumulated debt, debt default,  lower money-credit velocity creation, lower asset valuation, further default,  lower asset price saturation, breadline saturation, lower defaulting population saturation, vanishing bankrupted lenders saturation, bad unrepayable debt liquidation saturation and finally  … the debt-asset system’s  a saturation macroeconomic nadir  is reached where surviving debt will be repaid, asset prices have reached their nadir, new credit demand and new consumption demand appears with positive money velocity, and the debt asset macroeconomic system renews its growth of credit, growth of asset production, growth of needed jobs, and growth of asset valuations.
Next: Predicting the Nonlinear Devolution (Crash) Day for Equities and Commodities by the use of comparative quantitative debt asset  Saturation Fractal Macroeconomics….