All posts by Gary Lammert

The 15 August – October 2022 Y/2.5Y/2.5Y/1.5-1.6Y Great Global Equity Crash: A Fractal Replica of the 31 January 2020 Decay Series … but without the CARES ACT

Both the Wilshire composite and Bitcoin in USD had an average daily peak valuation on 8 November 2021. By the time of this peak it was apparent that the western central banks’ credit/money creation had caused significant consumer commodity and living expense inflation. This required central bank counter regulatory tightening. For the Wilshire, 2021 was the 90 th peak valuation year of a 1807 36/90/90 year :: x/2.5x/2.5x maximum growth cycle of progenitor US trading stocks with lows in about 1842/43 after the Panic of 1837 and in 1932 after crash of 1929.

Since 1982 credit expansions have been fueled by cascadingly falling Volcker interest rates, Reagan military expansion and deficit spending, a late 1990’s tech bubble, NAFTA et. al. outsourcing of US manufacturing, derivative financial engineering, CDO and CLO tranche financial engineering creating the 2007-8 housing bubble, abandonment of Glass-Steagal laws, and, after the early 2000’s, Ponzi scheme financing of the Chinese property bubble

Credit expansion since 2009 has been facilitated in a historically unique fashion by central bank trillion dollar bail-outs of the financial industry, support for the automotive industry, huge corporate tax cuts, use of those tax gains for buy-backs of stocks which have promoted paper gains for the board members, life support of nonviable industries via low interest rates and extension of loans, and finally a massive social spending program to offset the impact of covid.

Since 2009 the monthly fractal groupings have been: 5/13/10/7; 3/7/7; 8/17/16-17; and 10-11/26-17/16 ending in March 2020.

The Wilshire had a valuation low on 23 March 2020. At the time of the valuation low, the details were known of the CARES Act which was passed on 25 March 2020 and signed into law by President Trump on 27 March 2020. The CARES ACT more than reliquified the economy; many people received more money than they had received from wages earned during the preCovid period. The decay fractal series from 31 January 2020 was 6/15/14-15/10 days with the last 8 days of the 10 day fourth fractal starting a post CARES Act Wilshire valuation growth period. This was associated with a annual 400% increase in the M1 money supply.

The current monthly fractal groupings from the 23 March 2020 low appear to be 3/6/5 and 4/9/9 of 10 months, matching the time period of central bank money/credit creation because of covid and the later central bank tightening because of consumer inflation. From the March 2020 low these two monthly fractal groupings correspond to a 9/25/19 week :: x/2.5x/2x growth cycle followed by a 16/33/currently 33 of 39 week cycle :: y/2y/2.5y. 

US housing valuation prices are at extreme levels with Wallstreet corporations, advantaged with with lower corporate tax rates and cash, competing directly with blue collar Americans. Observable from 15 August 2022 is another possible 6/15/15/10 day decay fractal series. This decay series starts at the end of a 24 January 2022 31/71/41-42 day :: y/2-2.5y/1.5y declining growth aeries. Unlike 2020 the last 10 days of this 6/15/15/10 fractal decay series will not be supported with a repeat of the 2020 CARES Act. Nonlinear devaluation of equity and commodities of historical proportions is highly likely given the excesses of money/credit creation..

THE PERFECTLY VALUED ONGOING EQUITY, COMMODITY, AND DEBT ASSET VALUATIONS OF THE QUANTITATIVE 1807 36/90/90/54 YEAR DETERMINISTIC SELF-ASSEMBLY FRACTAL MACROECONOMIC ASSET-DEBT SYSTEM

Market valuations for all of macroeconomic system’s assets at all times are perfectly valued on a yearly monthly, weekly, daily, and hourly  basis. Debt-as-an-asset class and non-debt asset class valuations are counter balancing and dependent on the system’s prevailing central banks’ interest rate and debt/money creation conditions. The operative central banking conditions are in turn reactive to  the expected outcomes of that expansive debt/money creation activity. Since 1982 in the US interest rates have been dialed down in a cascading fashion by the federal reserve. In the 1990’s American corporations increasingly outsourced American manufacturing in favor of lower-cost labor and netter paper profits with corporate buy-backs of stocks, increasing corporate leaders’ private wealth. The American economy has been shifted to focus on the service sector which includes oceanic and transcontinental transportation of manufactured goods. The federal reserve’s operative activity in concert with private financial engineering/fraud have created boom- bust cycles associated with the Dotcom bubble in 2000 and the housing bubble in 2007-8. Deterministic peak and nadir valuations and self-assembled fractal groupings are, as a subset of the perfectly ordered d(valuation)/d(time) fractal system , likewise perfectly timed and grouped. Central bank operative conditions, especially since 2009 have alternatively caused consumer inflation directly related to both finite world energy, metal, and food commodity reserves and  by the commodity/equity speculation engendered by the central bank’s  relatively low interest rates/money printing programs .

Since 1807 the yearly fractal groupings of 36/90/90 years::x/2.5x/2.5x for the US hegemony are observable with a peak of the composite Wilshire’s valuation in November 2021 and nadirs for the asset-debt macroeconomic system in commodity and equity prices in 1842-43 and 1932.

The monthly fractal groupings since March 2009 are empirically observable: 5/12/10/7, 3/7/6,  8/17/17, 11/26/16, and currently 8/16/8 of 10.

The final 52 years of the 1807 36/90/90/54 year US hegemonic fractal cycle will be primarily dependent on the finite global commodities available to provide energy and feed the world’s population. Cyclical sharp inflation will be controlled by periodic interest rate increases/money tightening which will temporally lower commodity prices resulting in lower interest rates. From a 16.5 percent rime interest rate in 1982, the federal reserve, over the next 50 years, will operate in a negative to 1 – 2.5-3 percent range. Commodity inflation in this central bank interest rate range will be destabilizing. The commodity inflation will be exacerbated by competing geopolitical strife, continued global warming, and food production losses caused by the first two elements. A nonlinear event such as nuclear war or a precipitous annual global crop failure is an unwelcome possibility.

The operative monthly fractal series for US equities from the 2020 March low is 8/16/10 months with an expected blow-off in commodity prices (oil, metals, grains) (starting 14 August 2022) over the next 6-7 trading days and a commodity/equity low on 7-8 October 2022. The 10 month third fractal of the 8/16/10 month fractal series started on 24 January 2022 and is composed of a 2/5/5 month series.

https://www.youtube.com/watch?v=xvIgb8cx6JE

The Patterned Science of Asset-Dedt Saturation Macroeconomics: Incipient 54 year US Hegemony Fourth Fractal Nonlinear Collapse: The Great Global Equity and Commodity Crash Ending Mid October 2022

From the Global Equity March low in 2020, the concluding cycle fractal pattern is 5/13/10/7 months :: x/2.5x/2x/1.5x. The  terminal 7 months are composed of a 5/12-13/12-13 week :: y/2.5y/2.5y decay fractal series.

On 8 November 2021, the composite US Wilshire reached its current peak valuation of nearly 49 trillion dollars (48 trillion, 952 billion, 510 million dollars). On that date 8 November 2021, the deterministic Global Asset-Debt Macroeconomic Self-Assembly and Self-Balancing System  reached its maximum time based x/2.5x/2.5x multi-year maximum fractal growth pattern for the global system’s current US hegemony dating from 1807 of 36/90/90 years with a US Great Second Fractal 90 year low in mid 1932. The US Louisiana purchase property bubble peaked  and collapsed with the US Panic of 1837, concluded  with the system’s nadir of commodity price valuations in 1842/43, and ended the US First Great Fractal starting in 1807.  The US Fourth Great Fractal of expected 1.5x length or 54 years started at the US Great 90 YearThird Fractal’s peak in November 2021 and  is expected to conclude in 2074.  Since 2009 the Global Asset-Debt System’s unbalanced debt and social contract obligations have required both money creation and near zero  prime interest rates to sustain the system’s social and debt obligations. The principal future countervailing elements  for the necessary  default continuation of the Asset-Debt System  to offset existing debt and social obligations are 1. rising US property valuations which have proven to be easily inflated with financial engineering (2002-2008), historically low interest rates (2009-2021) , and outright money creation (2009-2021), 2. these future rising property valuations will be offset by commodity inflation caused by that financial manipu;ation and by ending global energy and commodity resources, 3. these dwindling finite commodities will be  offset by biotech and genetic engineering and   innovation and hopefully thorium and other fission nuclear reactors capable of producing carbonless energy, and 4. an unstable collective enforcement under the umbrella of continued nuclear weapon production with advanced delivery technology. For humanity this  is a scary, tenuous next half-of-a-century US Fourth  Fractal future with significant base population social and economic stress. The  development of non=democratic autocratic governments  in the West, in Japan, and in India is a likely political outcome of the US 54 year Fourth Great Fractal of the  Global Asset-Debt Macroeconomy.