On 5 Nov 2021 The US Composite Wilshire peaked at 48809.39 trillion dollars. This was the 90th year of a US Great 90 year Third Fractal starting in 1932 and completing a 1807 maximum 36/90/90 year :: x/2.5x/2.5x self-assembly asset-debt macroeconomic fractal growth series. Since 1982 higher high equities valuations have been propelled by cascading lower interest rates and since 2008, by near zero prime rates and outright central bank money creation to monetize the 2005-2008 toxic-asset-debt bubble and to later monetize the 15-20 % unemployment rate created by the pandemic.

Global central banks’ policies have averted a 1930’s type of depression. Since 2020 too low of interest rates associated with mortgage backed securities for too long of time have created Western property and equity super bubbles with 30-40% housing appreciation over two year’s time, transient dr/dt record growth of equity valuations, and ongoing continuing higher and higher commodity inflation with a 60 percent relative divergence of lower equity prices and higher commodity prices since the November 2021 Wilshire high. The higher commodity prices are impactful and have left the majority of consumers on the thinest of viabilty edges. And in principally consumer-based economies, this inflation is resticting purchases and resulting in lower company profit margins and relatively high inventories – the opposite of what is expected in a supply-line limited system. In response to the historical increases in consumer inflation central banks have allowed market-based increases in interest rates of sovereign debt instruments which have far outpaced the central bank prime rate increases. The former rate increases have resulted in 30 year mortgages rates above peak rates for the last 12 years. These rates have reduced the population capable of buying an availble over-priced house to a historically small proportion.

Western countries are faced with the dual prospects of increasing commodity inflation and 15-20 trillion losses in equities. Increasing energy cost and grain shortages secondary to Russia’s illegal action will continue global inflationary pressures.

China, the world’s new manufacturing Hegemony, has unstable and mighty fraility in its 1989-equivalent Japan-like property supper bubble with a 40 times asset valuation to annual income ratio.

Evergrande’s valuation collapse and the Bank of Shanghai valuation collapse are congruent. Expect a transient nonlinear decline for a global equities and commodities at the x/2.5x :: March 2020 33/83 week first and second fractal time units.

Next: Ark Restaurant: A microcosm of America’s service- sector- dependent Asset-Debt Macroeconomic Asset-Debt System

https://youtu.be/sFpTcd_mjtw

The self-assembly empirical laws of of the Asset-Debt Macroeconomic are self regulatory and counterbalancing. After a Buttonwoods agreement in 1792 and an iniatiating fractal series of 16 years the US macroeconomy has expanded from 1807 to 2021 with nadirs in 1842-43, 1932, and peak valuation found in the Wilshire composite in November 2021 for a 1807 36/90/90 year maximum growth series.

While China is the rising new hegemony, its financial system is substantially denominated in a 60 trillion dollar equivalent, over 1/8 of the world’s collective wealth, of often deficiently constructed, bad-unrepayable -debt leveraged and frothy real estate valuations- such that the average cost per unit is 50 times the average wage earner’s annual salary. The collapse of the Chinese real estate bubble is timed with and after the peak of the US’s 1932 to 2021 90 year bubble – propelled in the last 12 years by unprcedented money creation to avoid a recurrent 1930’s deflationary depression.

November 2021 represented the peak valuation for the US Wilshire 5000. This was the third fractal 90th year of a 36/90/90 :: x/2.5x/2.5x maximum year growth fractal series for the great US hegemony. This hegemony has been protected and advantaged by two large expansive east and west oceans, by nonthreatening north and south bordering countries, by abundant natural resources and energy production, and by capitalism – both during the great global wars of the 19 teens and 1940’s. But, as the US’s internal war of the 1860’s clearly demonstrated , the greatest enemy for the US is within itself and its competitive reelecting polarizing political democracy. This divide is manisfested and joined today by political disinformation, industrial global warming, nuclear war, and AI – all also representative of an enemy within ….

The great world economic blocks – the US, China, the European Union, Japan , India, and Russia are at an inflection point of the Asset-Debt Macroeconomic System. The current 420-480 trillion dollar valuation eqivalent of the global asset debt system is in a dysequibrium of great magnitude. Debt facilitated and manufactured for asset creation and valuation are disconnected from the base pf the pyramid’s population ability to repay the debt and principal due and the consumer price inflation created. Default of overreached debt will, of necessity, occur and an implosion of the inflated asset valuation will occur. The asset debt system appears to follow a simple mathematical progression just as the ordered 1807 36/90/90 year progression suggests.