The Real Citizen Economy Verses the Wall Street Central Banker Derivative Equity ZIRP Bubble Economy: Toward A Qualitative Understanding of The Global Macroeconomic Quantum Asset-Debt System Collapse

The key to having a qualitative wherewithal about the  large scale functioning of the US macroeconomy is understanding that it is, at its consumer citizen foundation, at its 1:1 leveraged foundation,  primarily a forward consumption based system. In the elementary citizen economy, future earnings of private citizens  are the collateral traded against the real time possession/use of assets or services. Homes and automobiles are generally solid collateral.
In the financial industry world  colluded with former Fed Chairman (who apparently uses the logic that because the equity market valuations  are leading indicators (they are) of economic activity that if the equities are OK, then the economy is OK) the derivative  leverage is 1:10 1:30 and the collateralize assets are murky and amorphous and when the leverage  causes extreme Asset-Debt excessive forward consumption, debtor population depletion, overproduction, and overvaluation, collapse occurs with the above FRED chart consequences.
What are the limitations in the asset-debt macroeconomic system  caused by the total US accumulative debt vice concurrent GDP growth on further citizen based and business based forward consumption growth?  A  look at a window of  5 year periods of history since 1980 of US debt growth cumulativelly relative to GDP growth which services the debt may be  instructive.
The total US debt and GDP growth is in trillions of  same year US dollars.
  Total Accumulative US Debt in 5 year increments in same year dollars

19-                 80       85       90      95   20- 00      05      08      10       12                              Total                                                                                                                                    Debt(T)         4.8      8.6     13.6   18.7     27.2   42.1    53.2    53.2     55.4

%5yr   delta(D)                                                                                08-12D    
 debt growth           80       60       40        50       50               25       03

 US GDP  by 5 year increments in same year dollars(2008 bubble peak included)   1977 to 1985 to 1997 represented doubling of US GDP in same year dollars

 2Q19-       77   80     85      90     95   97   00      05      08      10       12
year $(T)   2.1  2.4   4.2     5.8     7.3  8.4  9.8     12.3    14.4  14.4    15.5
Notice that since 1980, total US Debt in same year dollars has increased 1150% while Total GDP has increased by only 600% and with a smaller base 2.4 vice 4.8T.  While total US debt doubled by about 27T from 2000 to 2008, total GDP increased by only 40% and with a smaller base – by only 4.6T: a 4.6T GDP increase to cover 27 trillion of new debt. Since 2008 total debt has increased by 2T while GDP has increased by 1.1T using the 2Q 2012 as an annual average.
It could be explained that all of the new 1.1T GDP increase in the last 4 years was dependent on ‘QE’ black box, a euphemism for the Central Bank placing 2.5T on its books to keep the real economy alive. Nearly all of this QE money could be considered defacto  as paid out directly in the form of  SS checks, medicare payments, military checks, defense contractor jobs, federal employee salaries, welfare checks, et. al.  supporting directly the real citizen economy.

Otherwise considered,  1% of the interest on the  50T  represents 500 billion. This is about the same amount that the Central Bank’s QE program’s have been lending per year to Congress to continue to fund a non-sequestered,  central bank-maintained,  asymptotically-saturated asset-debt macroeconomy.

The citizens benefit by continued employment and obviously the elite creditors and owner’s of the 50T of debt benefit by continued payment. Concern for the US Bond rating is identical to the concern of honoring the Elite’s 50T of debt assets.

And otherwise considered, all of the net US tiny 3 percent debt growth from 2008 to 2013  could be attributed to congressional incurred debt and the Central Bank’s exhilo creation on their books of 2.5 trillion dollars and likely other  zero sum currency/bond exchanges with other central banks.

This exhihilo creation of money happened because mathematically it had to happen.
System interest rates cannot increase appreciably because the saturated asset-debt macroeconomic system mathematically can not allow it and can not pay it.

Sequestration will not happen because the asset debt system mathematically will not allow the US politicians allow it to happen.

Can the citizen consumer based forward consumption economy grow itself out of this 50 T dollar of system debt – all of which is based ultimately a real citizen consumer economy.

Look at the 1980 numbers the 2008 peak numbers and Q3 2012 numbers of US relative group debt.

Cumulative and Individual group debt.

1980           2008               Q3 2012

Total(T)                        4.8               53   (10x)           55
Congressional S/F      1.1               9.3    (9x)          14.3

Citizen                         1.4             13.7    (9x)          12.9

Corporate                    1.5             11.5    (8x)          12.1

Financial Industry        0.6             17.1    30x)         13.8

Foreign                        0.2              1.7     (9x)            2.3

Who are the counterparties to this debt? Who owns the 55 trillion dollars of obligation?  Those who would like continued interest payments on the principal.

Is the math possible for the real citizen based US GDP 15-16T economy to grow itself out of the shadow of the growth of US’s 1980 4.8T total debt, and, in particular, the Financial  Industry’s bubble contribution, to the 1150 increase in US total debt to the 2012  55T, while the US economy’s GDP in same year dollars has increased from 4.8T in 1980 by only 600%  now at 15.5T in 2012.

And here is the answer, the rub, the paradox, the saturation asymptote of the citizen-based forward consumption Asset-Debt Macroeconomic System ….

… in a forward based citizen consumer economy the only way to grow  the economy is to increase the citizen debt load (or congressional debt load) by further borrowing against future earnings.

That consumer borrowing population is simply depleted…

Even with Central Bank QE assistance, the necessary solution to this asset-debt system conundrum is partial debt default and asset devaluation. 

Part of the default at some point in the future, will be the erasure, the debt jubilee on the Central Bank’s black box holdings.  For those who  think the Federal Reserve’s 500 billion per annum QE action will result in inflation, think of the 55 T total debt sink sucking 500 billion, 1 trillion, 1.5T, 2T dollars out of the system each year at 1,2,3 and 4 per cent interest rates.

In the next weeks and months as the asset-debt system mathematically implodes , the above qualitative information may frame a basis for a better understanding about what is happening.

The Pattern Science of The Asset Debt Macroeconomic System

It is, however, in the asset-debt system’s exquisitely precise  time based quantum valuation saturation curves of the US composite equity, east and west major nation composite equity, and commodity asset classes and, oppositionally, the countervailing US hegemonic debt futures and yes the rising US dollar where the footprints of Asset-Debt Saturation Macroeconomics can easily be observed demonstrating a highly organized quantum pattern of the system’s weaker assets’ devaluations – as bad debt which can not be mathematically repaid in a consumer job-earnings collateral forward based and asset saturated economy – undergoes necessary and inevitable default.


30 January, 6 and 8 February 2013: the secondary peak valuation days for the Canadian SPX, Nikkei, and US SPX respectively: Self Assembly Asset Quantum Valuation Saturation Curves: The Patterned Science of Global Macroeconomic Debt-Asset System

A new patterned science of the global macroeconomic system is observable for those who do observe.

An understanding of the quantum nature of the asset-debt global macroeconomic system will lead to needed thoughtful changes in the global system’s monetary, lending, and asset advantaged and asset disadvantaged tax rules. Rules will be established curtailing the financial industry’s ability to skim money- and more money than the collective of those involved in useful and real economic activity – by purely manipulation of the monetary system, first use of the system’s money, and selling short and long the valuation derivatives of real assets, evaluation valuations now understood to be part of a mechanical self assembly global one quadrillion asset debt system.

An understanding that central bank created money directly traded for goods and services is an important necessary tool to offset the malinvestments, debt, asset overvaluation, and job depletion now present in the asset-debt saturated environment directly created by the union of financial industry and majority elements of both political parties.

A historical 11 week Nonlinear cataclysmic asset valuation deflation lies immediately ahead with silver eventually at 5-10 US dollars an ounce.

30 January 2012 was the peak valuation day for the Canadian SPX. From 4 October 2011 it self assembled in a 12/30/30 week pattern and from its 16 November 2012 second subfractal of its 12 July February 2012 third 30 week fractal, it self assembled in a 9/22/22 day pattern with an exact peak and reversal day on 30 January 2012 the 22nd day of the 22 third fractal of the 9/22/22 days series.

The Nikkei evolving from a 28 April 2003 low will complete a 21/51-52/51-52 month y/2.5y/2.5y decay series in late April 2013. Within this decay series, Nikkei’s third < 51-52 month fractal growth began on 10 March 2009. It has evolved in a 38/92/77 week :: x/2-2.5x/2x decaying growth series within  the expected completion of a 38/90/90 week :: y/2-2.5y/2-2.5 week decay fractal series.

The Nikkei’s final third fractal 77 weeks of growth started on 22 August 2011 and evolved as a 14/36/29 week blow-off fractal. Using the 36 week second fractal as the determinant integrated reference unit, the ideal base would be slightly more than 14 weeks. An ideal third fractal would be 2x or 29 weeks. The second subfractal of the 29 week third fractal started on 13 November 2012 and evolved as a 11/26/22 day fractal series with a peak valuation on day 20 or 6 February 1013 of the 22 day third fractal.


The US SPX has evolved from its 4 October low in a 12/30/31 week extended series with a 15-16 November 2012 9/23/18 day with a 3/7/5 day extension fractal ending on 8 February. Day 18 of the third fractal was the 2nd day of the 3 day base : 3/7/5 days. Like the Nikkei which ended in a 8/17/13 week Fibonacci 3rd fractal  growth series   :: x/2-2.5x/1.6x , the SPX also reached its peak valuation in a 3/7/5 day :: x/2-2.5x/1.6x Fibonacci third fractal to he base ratio.

Notice that the March 2009 third  fractal series has ended at the  same point for the Nikkei and Western Equities but in a different fractal fashion. For the Nikkei there was one 9/21/19 month x/2-2.5x/2x fractal series. Fot the US, Canadian, and European Equities there were two subfractal series :: a 5/13/10/7 month ::  x/2.5x/2x/1.5x first fractal series and a 12/30/30-31 week second fractal series with a deterministic third fractal  blow-off related to the tax advantaged speculative interest in the Equity market and the countervailing competing low yielding interest rates.

With collapsing equity and commodity prices US interest rates will be reduced to historical 150 year lows.

Are the asset debt macroeconomic system’s saturation curve exquisite self assembly  quantum valuation patterns a type I error?





The Mechanistic Deterministic Self Assembly Asset Debt Macroeconomic System: Monday 4 February 2013: The 11 October 2007 Tertiary Peak Valuation: Observe the Minutely Exhaustion Gaps in Global Composite Equity Markets: For the Canadian SPX 22/55/55 of 55 days :: x/2.5x/2.5x

The 11 October 2007 SPX US peak valuation high was a 20/50/40 day :: x/2.5x/2x Lammert reflexic fractal series. It occurred at  countervailing much higher competing  interest rates and before the significant anomalous central bank self purchasing  of bonds and yet absolutely asset-debt systemnecessary money creation.

The 2009-2013 Federal Reserve’s defacto Real Bill Doctrine placing a 3 trillion dollar infusion into the US economy has kept its unemployment rate at 8 percent as the created money has maintained a stream of funding to the military, military contractors, federal workers, the health care sector, the welfare sector, and has met  tax-earmarked and funded obligations to retirees.

What would have been the demultiplier effect on the real citizen’s economy if the US central bank and other world private central banks had not created money ex nihilo to continue the stream of money. In 2008 a financial industry-politician created asymptotic line of malinvestment had been reached and in 2009 and in that and subsequent years there was not simply not enough money profits from the saturated asset-debt system to provide funding via borrowing  from the nongovernmental sector.

What was the collateral for the  Real Bills created money been traded for?
Ongoing Job Maintenance and Civil Stability.

Instead of having 70-90 million on  food stamps and adding to the prison population and disability population, this created money was traded for mostly societally useful activity.  The vast portion of Social Security checks were immediately spent on food, rent, real estate taxes, local services with the money immediately plowed back into the real local economy – as was money distributed to the other sectors.

This deficit funding has allowed some but insufficient time for the real citizen based economy time for system reequilibration,  partial debt liquidation and default and for real estate price contraction relative to the bubbled overvalued and overproduced assets created by the bad rules authored by the owners of the debt-asset global system: the superrich elite and their  financial industry and owned legislatures.

Created jobs in the saturated environment of asymptomatic massive private citizen debt, real estate overvaluation with citizen owned underwater mortgages, and overproduced real estate have been  both inflation adjusted lower paying and fewer in number than the middle class jobs of earlier years.

For the financial industry and equity and commodity owners, this Global Real Bill Doctrine infusion has created a caricatured malinvestment valuation bubble in equities and commodities whose current valuations  otherwise would not have not reached the current levels.

With high commodity prices fueled  by ZIRP financial industry speculation and accompanied with high unemployment in a citizen based saturated asset-debt system environment, the Arab spring unfolded in 2011 collapsing 30 year old dictatorships.

The asset debt system based on the citizen’s money, debt, and asset needs has been taken to its limits and broken by the bad rules of the Financial Industry elite owners. The central bank which is part of the elite system, has the odd role of maintaining the system via the creation of Real Bill doctrine money. While this has sustained system, it has distorted any balance between  the role of private US citizens bank savings which the former Fed Reserve Chairman so bemoaned and the low interest rate forced speculation in the equity and commodity markets.

There is another natural Asset-Debt system mathematical collapse of the equity and commodity markets in the ante room.

The top of the US equity market, which is currently at x/2.5x/2.5x :: 9/23/23 days,  will likely have a few hours or a day or so of extension. European composites are already at 9/23/24 days.

The top of the S and P composite will be marked with a minutely  exhaustion gap as it was on 11 October 2007.

The negative US GDP of the 4th quarter of 2012 is a marker of real dwindling US citizen based economic activity – even as supplemented by the past three trillion dollar Real Bill doctrine infusion  and the new ongoing 50 billion dollars/month ‘purchases’ of US debt by the central bank representing a continuation of  that real bill doctrine.

The coming equity collapse will receive a qualitative assist by the misdirection of austerity and fiscal responsibility measures created exactly by those most irresponsible and most imprudent and most unjailed ideologues who have hawked and  have expanded the bubble- the Wall Street criminals and their political proxies in the majority HOR party,

The September 2011 silver chart is shown: 14/29/30 weeks ::  x/2-2.5x/2-2.5x with the 30 week third fractal composed of 6/12/12 weeks :: x/2x/2x.  Silver is a proxy for the CRB. Both are at  asymptotic quantum growth levels with maximum speculator population participation saturation and reciprocal interested population depletion and alll dependent on the real money available among speculators and the interest in speculative borrowing via the ZIRP interest rate environment.

The SPX Sept 2011 chart is also shown: 14/32/28 of 29 weeks with the 29 weeks composed of a reflexic 5/13/13 of 13 week fractal.

The Canadian SPX is shown with a Sept 2011 pattern of 14/32/29 weeks. The terminal portion of the 32 week second fractal is composed of 11/28/16 days x/2.5x/1.5x with a nonlinear break between day 23 and 24 of the 28 day second fractal, consistent with the characterization of second fractals. The final sequence is a 5/13/13 week reflexic fractal series  with a 22/55/55 day :: x/2.5x/2.5x maximal pattern ending on 4 February 2013. For each subfractal one day from the preceding declining fractal is integrated into the next fractal. The daily series of 22/55/55 days starts on 1 August 2012 and ends on  4 February 2013.

For the technicians: SPX valuation:
24 March 2000          1553                                                                                          left shoulder
11 October 2007       1576                                                                                           head
4 February 2013   1520-1545 (speculator-depleted ZIRP-augmented saturated)     right shoulder

The global asset debt macroeconomic system is a self assembly self organizing entity with natural saturation curve boundaries and has the quantum time based asset valuation curve evolution properties of a highly patterned science.