The US Hegemonic Asset-Debt System is following a
1807 36/90/90/54 year :: x/2.5x/2.5x/1.5-6x self-assembly 4-phase growth and decay fractal series.

Credit expands, assets are produced and over-produced and overvalued and over-consumed; composite asset valuations reach a singular peak valuation and thereafter undergo decay, recessions occur, excess debt undergoes default and restructuring, and composite asset valuations reach a nadir. The cycle repeats itself.

Empirically the cycles occur in 2 mathematical time- ordered and self-organizing fractal series manners:

a 4-phase fractal series: x/2-2.5x/2-2.5x/1.5-6x and
a 3-phase fractal series: x/2-2.5x/1.5-2.5x

In the 4-phase fractal series sequential elements are termed: the 1st, 2nd, 3rd, and 4th fractals and in the 3-phase fractal series: the 1st, 2nd, and 3rd fractals.

The 2nd fractal is characterized by terminal gapped lower lows between the 2x and 2.5x time period. (These gapped lower lows can be seen in weekly units between 1929 and 1932 of the US 90 year 2nd fractal, before the 5 August 2024 139 day 2nd fractal low and can be expected within last few months of the 32-33 year 2nd fractal of the interpolated 1982 13/32-33 year 1st and 2nd fractal series.)

With the exception of the 3rd fractal in the 4-phase series whose fractal grouping is determined by its terminal peak valuation, fractals (fractal groupings) are determined by the nadirs of the first and last time unit in the grouping with intervening valuation above the connecting nadir trend-line.

For 1807 36/90/90/54 year fractal series, nadirs occurred in 1807, 1842-43, and July 1932 defining the 1st and 2nd fractals with a 3rd fractal 90 year peak valuation in Nov 2021.

World War 2 and post Breton Woods American dominant manufacturing growth and dominant currency disrupted equity composite nadir valuations from 1932 to 1982 with a resultant 11/21/21 year :: approximate x/2x/2x 3-phase fractal growth series.

To complete the 1807 36/90/90/54 year US 4-phase fractal series, an interpolated 1982 13/32-33/32-33/20 year x/2.5x/2.5x/1.5-6x 4-phase fractal series is expected.

Credit growth from 1982 has been propelled by cascadingly lower US fed fund interest rates, a 2000 speculative internet bubble and a 2008 housing bubble, post event recession corporate and Covid citizen bailouts, massive governmental deficit spending and credit/money growth accommodation from the US central bank which has allowed relatively low US unemployment levels and service sector incomes to purchase foreign goods made with 10-25% of US labor cost with increased corporate profits, decreasing corporate tax rates and corporate buy-backs of equities vice investment in domestic manufacturing .

The massive citizen Covid bailout propelled the SPX to its 90 year 3rd fractal high in Nov 2021 and was contained within a March 2020 8+/24/14 :: x/2.5x/1.6x 3 phase growth fractal series followed by a 27 Oct 2023 55/139/138 day :: x/2.5x/2.5x peak valuation fractal series

The last 7 days of the 138 day 3rd fractal contains the SPX 19 Feb 2025 peak valuation which forms a 7 day base for a 7/18/18 day 3-phase crash decay fractal series.

Fractal groupings are determined by a slope line between the nadir of first time unit and the nadir of the last time unit of the grouping with all intervening valuations above the two nadir points. The 1929, the 1987, and the 2020 incipient 3-phase decay fractal series and fractal groupings all have shared this commonality.

The SPX reached an interpolated 27 October 2023 55/139/136 day :: x/2.5x/2.5x valuation zenith on 19 February 2025. This 136 3rd fractal peak valuation coincided with a 5/11/12 day :: x/2-2.5x/2-2.5x fractal growth series starting on 13 Jan 2025.

A 19 February 2025 3/8/8 day decay fractal series was initially proposed but does not meet the definition of fractal groupings as defined above. Day 3 of the 2nd 8-day fractal has values below slope line between the nadirs of day 1 and day 8. (Below)

A 13 January 2025 5/11/10/7 day :: x/2-2.5x/2x/1.5x 4 phase fractal series (below) contains the 19 February 2025 high …

and has two alternative possible interpolated 3-phase fractal decay series: a 14 February 2025 5/10 of11-13/10-13 day decay series (below)and …

… a more probable 14 Feb 2025 7/8 of 14-18/14-18 day fractal decay series below – both in accordance with a 3-phase y/2-2.5y/2.5y fractal decay series. In the latter series the 7 day 4th fractal of the 13 Jan 5/11/10/7 day 4-phase series becomes the first 7 day fractal or ‘y’ of the y/2-2.5y/2-2.5y 3-phase fractal decay series.

The 14 February 2025 7/8 of 14-18/14-18 day fractal crash decay series is also consistent with fractal patterns in the HangSeng, Shanghai Composite, the Nikkei, and the European composite stocks.

While this valuation collapse is a naturally occurring asset-debt macroeconomic deterministic self-assembly deterioration process after maximum fractal growth (1982 13/32 years and terminal 31-32 year 27 Oct 2023 55/139/136 day :: x/2.5x/2.5x maximum growth(below), the chaos that has cornerstoned the 180 degree reversal policies of the current administration will likely receive just reward and be deemed as causative of the collapse especially after the very recent positive US ISM services numbers and the recent European equity blow-off.

THIS TIME IS DIFFERENT: MARCH 2025 IS NOT OCTOBER 1987

THIS TIME IS DIFFERENT: MARCH 2025 IS NOT OCTOBER 1987

On 2 Oct 1987, the US composite SPX reached a maximum fractal length of peak secondary valuation growth and following a 30 Sept 1987 y/2-2.5y/2y :: 3/7/6 day 3 phase fractal decay series – crashed, on 19 October 1987, day 6 of the 6 day third fractal with over a 22% loss on the day and with global equities collapsing 1.7 trillion dollars on that single day of trading. Preceding peace-time historically high % Reagan GDP to deficit annual spending had built a 600 ship navy and fueled robust economic and equity growth. The 1987 debt to GDP ratio was about 39%

In 1987 the US hegemony and American manufacturing were near a zenith. Falling US interest rates from 1982 would propel an interpolated (see previous posting) first 13 year fractal from 1982 to 1994, and American innovations, US financial engineering,the US-NATO hegemony protecting the US dollar, low cost foreign labor and globalization, historically low fed fund rates, and an expanding US debt balance sheet to purchase foreign goods, provide services and defense spending would reinflate US equity growth after bubble collapses in 2000 and 2007-2008, and the after the 2020 Covid pandemic unemployment crisis resulting in the current US housing-equity-debt bubble.

In 2025 the US equity and commodity markets are near the end of a maximum length of growth of an interpolated 1982 13/32-33 year :: x/2.5x first and second fractal series. Second fractals are characterized by terminal nonlinear collapses.

In Oct 1987, five years into the 13 year equity growth first fractal, there was no 10 year note minus 3 month treasury bill debt inversion. There was no data to suggest an oncoming recession. The US hegemony and NATO alliance was strong, bankrupting the Soviet Union within the following decade. China was weak economically with only great potential by the nationalistic policies of determined sequential Chinese leaders.

In March 2025, in the 32nd year of the 32-33 year equity growth second fractal -after the longest ever, more than 750 days of 10 year note minus 3 month treasury inversion and uninversion of about 50 days – historical inversion has reoccurred in the last few trading days. Manufacturing and employment data suggest a pending recession. Federal employees who contribute to the economy maintaining mortgage and car payments are being fired en masse without cause. Smoot-Hawley-like tariffs are being enacted and the US-NATO alliance supporting the US dollar is undergoing dissolution. China has grown into the top manufacturing country, but is destabilized by a residential bubble that is on at least an order of magnitude greater than the global 2008 housing bubble.

This time is different.

In 1987 a 30 Sept 1987 3/7/6 day :: y/2.5y/2y fractal collapse ended in the 22.7% DJIA drop on 19 Oct 1987 the 6th day of the third 6 day fractal.

A x/2.5x/1.6x :: 8+/24/14 month SPX growth fractal series from the March 2020 Covid low ended on 27 October 2023. This growth was propelled by the excessive deficit-GDP spending by the two preceding administrations, accompanied by central bank money creation and low interest rate mortgaged back securities, and bolstered by tax cuts for the wealthiest individuals and corporations with corporate buy-backs of equities and corporate buying of residential units .

In March 2025 after a 27 November 2023 to 19 February 2025 55/139/136 day maximum SPX growth fractal series, an eerily similar 19 February 2025 3/6 of 7-8/ 6-8 day :: y/2.5y/2y-2.5y decay series similar to the Oct 1987 crash series is apparent.

Unlike Oct 1987 which bounced off a slightly lower low 34 trading days later, March 2025 will be the first in a series of significantly lower lows.

Since the Eisenhower administration when top US individual tax rates were 90% and corporations 50%, steady tax reductions for the wealthy and corporations with unconstrained governmental spending have created greater and greater budget deficits and higher debt to GDP ratios. Unlike Chinese politicians who have promoted domestic employee wage growth and manufacturing growth nationalistic policies, both American political parties have sided with wealthy individuals and corporations to reduces taxes, expatriate US manufacturing jobs in favor of cheap labor imports and higher corporate profits, creating wider and wider wealth disparity in the United States.

Safety nets are being dismantled to afford yet greater tax cuts for wealthy individuals and corporations. 80 year old alliances with a countries having over a collective GDP of 55 trillion which support the US dollar are being undermined in favor of association with well established adversarial nations with less than a 2.5 trillion GDP.

This time is different.