27 February 2013: Picking the SPX Peak Valuation … 28 February 2013 above 1530 but (far)below its 11 October 2007 1576.09 all time high…

Look for a new multiyear minutely gapped high on 28 February 2013 for the SPX ending on or near the low of the day.

Why with so much bad news, really really bad dysfunctional US congressional news.. is the SPX making a new high on 28 February 2013?

The answer is: it, the US equity market, must do what deterministically, given the tax advantaged US equity profit laws and in the context and under the umbrella of a one quadrillion Asset-Debt global saturated macroeconomic system – now at its peak US composite equity time, … what it must do on 28 February 2013.

In simple words, the political maneuvering, the contrived sequestration, the outcome of the sequestration compromise, whether viewed positively or negatively for either the working party or the party of the transgenerationally legally entitled has nothing to do with independent operation of the too-big -to-affect One Quadrillion Asset-Debt System’s timed- based asset valuation curves.

(Parenthetically, remember the ease and speed  of the bipartisan passage of the 750 billion dollar Wall Street bail-out which had an estimated value of over 12 trillion in relief. This real-economy-damaging, real-citizen-affecting 85 billion dollar sequester is chump change compared to the 140 times greater boost given to the financial industry with 144 billion dollars in CEO bonus’s given a year after the 12.8 trillion – not too much lobbying power or consideration for  the little people…)

GM’s 6/16/12 of 12/1 of 9 week series (see last posting)suggest there are 8 more weeks until a major bottom.

8 weeks would represent about 38 days.

In this context a spx 10/25/20/15 day is possible with day 20 of the 25 day second fractal on 28 February 2013.

1 March 2013: One More Time .. As The New GM Goes, As KOBE Steel Goes, and As Gold Goes …. So Goes The Dysequilibrium Saturated Asset-Debt Macroeconomic System

… As The New GM Goes, As KOBE Steel Goes, and As Gold Goes …. So Goes The Saturated Global  Asset-Debt Macroeconomic System

The Asset-Debt Macroeconomic System is composed of two major classes of assets: tangible and intangible assets. This is the 2008 breakdown for the US.

Included in the 2008  US 46 T Asset-Debt System’s tangible hard assets are the M2 money supply,  factories, machinery, real estate, automobiles, energy plants, water treatment systems, electrical grid hardware and software, communication systems, military hardware, TV’s, fiber-optic cable system’s, cell phone towers, satellites, cell phones, minerals, precious metals, kitchen sinks, et. al.

Some of the tangible assets: nuclear weapons, satellite systems, delivery systems, and communication systems, which represent a very small amount of total value of the system are worth relatively  much much more in terms of the maintenance of the current form of the Asset Debt system.

The Asset Debt systems intangible assets exist in some form of IOU where the intangible can be traded for and redenominated in hard currency or tangible assets.

There are two types of the IOU intangible elements: type 1: “real and existing” and are more easy to redenominate in hard currency and type II: “virtual counterparty agreements” which are much more difficult and more lengthy to settle.

The type I intangible asset has already been ‘earned’.  M2 equivalent money  has been traded for a derivative of a class asset; equities or commodity futures, or for debt instrument and is undergoing storage.

The storage site owes the “earned and existing intangible Type 1 asset” to its owner and acts as a trader medium to convert the asset into a M2 equivalent hard asset.

Tax laws and system leverage regulations skew M2 equivalent money flow entry into the various Type I intangible elements.

The Type II intangible asset has a  virtual quality in that it only conditionally exists if the following counterparty agreement below is successively fulfilled. i

This  agreement is the exchange of future earnings/tangible collateral/intangible collateral traded against the current use of existing tangible assets ,i.e., M2  often used to purchase tangible assets.

Use of ‘existing and earned’ tangible money becomes caricatured via the private banking system.  The private central bank system and fractional bank lending allows adequate leverage in the system to expand a 10.5 trillion dollar base to 55 trillion of total US debt.

In a manner even the type 1 ‘earned and existing’ intangible assets have type 2 characteristics which are dependent of the viability of the trader medium and the timed based intangible asset class  valuation saturation curves.

After consumer saturation with debt and overvalued assets in the 15.5 trillion base GDP and  after peak equity population involvement,  owners of stock market intangibles can expect nonlinear collapse in M-2 equivalent  returns.

Review the estimated 2008 188 trillion US Tangible/Intangible Asset grid again.

And more recent data on Intangible asset growth by 2010

In December 2012 the Federal Reserve announced a 1.7 T dollar increase over 3 months in household and nonprofit total worth to 64.8 T still about a trillion dollars less than 4th quarter 2008. (see above tables.)

For 2013 a rough estimate of the breakdown of the US 200 trillion worth within the one quadrillion World Asset debt Macroeconomy is:

Tangible assets including the M-2 10.5 trillion money supply: 45 trillion or less (with the collapse of 2008 real estate prices)

Intangible Asset items : 1. total a) US Local ,State,  Federal, b) private citizen, C)corporate, and d) financial industry debt 55T, 2. total US equity valuation 16T, 3. foreign equities 2T, commodities .5T 5. total holding of foreign state and corporate bonds 2T = 75trillion.

It doesn’t seem that the total intangible asset valuations that the official US tables delineate  add  to the probable 170 T (150T in 2010).

Where are the additional 95 trillion of the US financial intangible assets listed in the 2010 table and in what form are they?

And the 55 trillion in debt is leveraged and derived from a 10.5 trillion 2013 M2 base and 15.5 T a year US economy which has been supported by 600 billion year ex nihlio money creation from the US private central bank for the last four years ….

Something is clearly amiss.

This US asset debt system is excessively leveraged with 150 trillion worth of combined debt and financial intangible assets dependent on a 15.5 trillion annual GDP , a 10.5T dollar money base, and a debt saturated, overvalued-asset over-consumed consumer citizen population within that 15.5 T operating GDP economy.

As GM  Goes:                                                                                            So goes deflationary collapse….                                                         Maximum growth: 13/32/32 weeks as of  the week ending 1 March 2013

                                                                                                                   As KOBE Steel Goes…                                                                            so goes the real hard asset steel girder use and macrobuilding growth in the global economy  ….

As Gold Goes ….                                                                             Asset-Debt Macroeconomic System deterministic self assembly deflation and collapse goes… … And the Hegemonic US dollar and Hegemonic  US bond futures go oppositely in valuation ascent. But gold is but one of many asset carts and the Asset Debt macroeconomic system is the horse.






The Patterned Science of Global Asset Debt Saturation Macroeconomics: The Long Term 1988 and Short Term 2003 Nikkei, The 1993 and 2000 Gold, and The 2007 US Ten Year Futures Quantum Fractal Saturation Curves

The Nikkei, Gold, and US Hegemonic Ten Year Futures

Towards a  Naturally Progressing Deterministic Quantitively Understandable Global Asset-Debt Macroeconomic System

In the last posting, a qualitative explanation was provided to understand the current time window of the self assembly global macroeconomic system. The disparity between the rate of US debt creation and the rate of GDP increase to service the debt was reviewed.  From 1980 to 2012 US GDP increased from 2.4 to 15.5 trillion dollars about 650%, while total debt increased from 4.8 to 55 trillion or 1200%.

About 1/4 of the US total 200T asset worth is debt: 55T. Debt as an asset  provides the countervailing counterbalancing linkage to the entire system. Too much debt via leverage or low interest can be produced. Asset can be overproduced and overvalued based o debt leverage and interest rates. If the system does not produce jobs and earnings at its base debt will undergo default, the collateral asset will be assumed by the owner of the debt, placed on the market and, in saturated asset  overproduced environment, a resulting  lower valuation. If there is no real collateral, college loans and asset derivatives, the owner the debt may receive nothing from the counterparty.

In this counterbalancing manner,the Asset-Debt  Macroeconomic System proceeds in a highly organized mathematical self-correcting progression.

With the US dollar as the world’s reserve currency, 55 trillion of debt against a 15.5 T dollar GDP economy, a smaller  work force, and less demand, the system’s will create lower interest rates, which will further deplete the able debtor citizen population.

Even in the 1930’s depression US interest rates have never been this low. This level of low interest rates are an anomaly in terms of the 225 year of the US economic activity but are an expected nonlinear part of the patterned  Science of Asset-Debt  Saturation Macroeconomics.

And the Asset-Debt System ‘requires’ that  US interest rates  go lower -much lower.   This is the time area of a US 1858 Second Fractal Asset-Debt Macroeconomic System Collapse.


The Nikkei, Gold, and US Ten Year Note Fractals:

Remembering that this is a global one quadrillion total wealth asset-debt Macroeconomic system, the combined worth of the three assets element below represent less than 2.5 percent of the global total asset-debt wealth.

The NIKKEI: The Nikkei peaked on 29 December 1989 at 38957. On 6 February 2013 it reach a 4 year new peak valuation of 11498, about 27 percent of 23 year earlier peak. Euphoria abounds.

The 1988 Nikkei  y/2-2.5y/2-2.5y  ::  57/129/119 of 143 Monthly Decay Pattern

The 2003 Nikkei: x/2.5x/2-2.5x :: 21/52/48 months or 119 months within the 1988 3rd fractal 2-2.5y 114-143 month  Decay Pattern.





GOLD: The internet bubble’s mid and late 90’s perturbation on the 1932 to 2013 Gold Valued in US dollar’s Quantum Saturation Curve  Pattern

1993 to Feb 2013 Gold: 45/103/93 month : curvilinear blow-off fractal.                             The competing internet bubble sucked speculative dollars from the gold market; the internet malinvestment bubbles’ collapse sucked further speculative dollars with a basing in 2000

Early 1993 first base fractal 7/17/14/10 months or 45 months                                                       End of 1996 second fractal  15/38/30/23 months or 103 months curvilinear                                           Mid 2005 third fractal 42/53 months or 94 months

From 1932 Gold’s valuation indollars followed the CRB’s 8/20/10 year pattern.  1960 to 1970 formed Gold’s 10 year base fractal with a 1970 to 1993 (7+/18 year) or 24 year second fractal. The third is composed of the 1993 curvilinear 45/102/94 month or 4/10/8 year or 20 year fractal. The US 1960 to 2013 Gold fractal in US dollars is 10/24/20 years :: x/2.5x/2x.

Even with low interest rates, defaulting debt and collapsing asset prices will cause a drop in gold valued in US dollars to  300-400 dollars.

Against the valuation of gold dominated in dollars, the US dollar has began the steep part of its valuation growth curve against other currencies with its first 42 month base fractal from 2008 to 2011 and the 3/8/6/5 month Lammert: x/2.5x/2x/1.6x  19 month  first subfractal of the second fractal growth series completed on 1 February 2013.

An interpolated Gold  fractal began at the low in US dollars in 2001 follows a 27/67/53 month Lammert growth pattern :: x/2.5x/2x and representing maximal growth.


During Asset-Debt system global collapse, Ten Year US Notes along with the US dollar will gain in value against other defaulting debt and declining in value lower quality currencies. US interest rates will reach 150 year historical lows.

The US Ten Year Futures have been a conundrum in terms of the last 25 months of a 13/33/25 of 26-33 blow-off.  This conundrum has recently been solved showing that the 25 months have occurred in two subfractals with the oppositional and tax advantaged US equities having a favored speculative population with exhaustion of that population at the extreme of the 26 month (2x) US Ten Year Future’s Note Blow-off Third Fractal.