The 2025 Smoot-Hawley 2.0 new tariffs and announced counter tariffs are coming at the precise time of maximum fractal global peak or secondary peak equity valuation with 24 months of declining manufacturing data and re-inversion of long term debt minus short term debt yields after 2 years of steep inversion, greater than 1929.

Smoot-Hawley 2.0 is the last ditch populist response to the 1992 Perot ‘Giant Sucking Sound’ of American manufacturing jobs going south, west and north. The nationalistic Chinese government has consistently fostered growth of manufacturing jobs for Chinese workers in contrast to the US government who has supported election-donor US corporations (and individuals), the latter primarily interested in profit alone. Both US entities were not focused in a national strategy to maintain and grow America’s manufacturing might. The US government has deficit spent at an annual average rate of greater than 5-7% of GDP to maintain a 2.5% GDP growth, while the US central bank printed dollars and sold debt to accommodate the US’s growing trade deficits and an enlarging US service-based economy. The container-ship imports were primarily purchased by two American family workers vice one worker.

With the debt load of US younger workers and the cost of housing with current interest rates, the average age of US home buyers is now 56.

After 30 years of establishing international supply chains and a linked global macroeconomy, the decoupling effect of US tariffs and the counter tariffs will result in a much greater global effect than the early 1930’s.

With the ongoing Chinese housing bubble still undergoing collapse and a probable further decline in Chinese domestic consumption, a very hard landing global recession is coming.

On 9 Dec 2024 the global Equity composite ACWI reached an all high at 123.58. This day of peak valuation growth occurred exactly on a x/2.5x/1.618x 27 Oct 2023 :: 55/139/89 day fractal series. The SPX reached its maximum a trading day earlier, still very close to a third fractal Fibonacci time ratio of its 55 day base first fractal.

Like the Spanish empire of the 16th century, the American hegemony, is burdened with massive unrepayable debt and the accumulated interest on that debt. While short term US treasury rates are controlled somewhat by the Central Bank (and more so by the preceding low inflation environment secondary to 1990’s NAFTA and the 1999 China WTO agreements), long term US rates are controlled more by market forces. With American companies and ultimately consumers expected to pay increasing tariffs, the market is demanding higher interest US rates on long term instruments for anticipated inflation. After more than 760 days, uninversion of the 3 month minus ten year US note occurred on 13 December 2024 with a rising positive value of 0.32 on 8 January 2025.

The European manufacturing economy is crippled with ever high energy cost and the Chinese economy is imploding domestically with its internal property collapse and its dependence on exporting manufactured goods to a world of highly indebted consumers and defensive tariff-proposing governments.

A 1982 first and second fractal series 13/32 year :: 50/125 quarter :: x/2.5x nonlinear collapse in global equity valuations would abruptly change inflation expectations with a collapse in long US term interest rates.

This is expected to happen in this quarter and the next quarter.

The US hegemony is following an 1807 36/90/90/54 year x/2.5x/2.5x/2x Fractal pattern expected to end in 2074-75.

Nadirs occurred in 1842/43 and 1932 with a 90 year third fractal peak on 8 November 2021. The SPX is following an interpolated 1982 13/32/32/20 year :: x/2.5x/2.5x/1.5 self-ordered 4-phase Lammert fractal series..

The valuation fall from the SPX’s 2024 high of 6100 could be as low as 900 or 85% if the SPX nadirs near its 32 year second fractal trend line.

A 4-phase 27 October 2023 to April-May 2025 fractal collapse of 13/30/24-25/16 weeks :: x/2-2.5x/2x”/1.5x’ is shown below, as well as the 5 August 2024 to 10 January 2025 110 day third fractal lower high of the 27 October 2023 55/139/110 :: x/2.5x/2x final Lammert 3-phase growth series.

9 December 2024 was the 27 October 2023 x/2.5x/(Fibonacci) 1.618x :: 55/139/89 day maximal daily 3-phase fractal growth series for both the composite ACWI, the 100+ trillion global ETF proxy, and the 1929 survivor Tricontinental Corporation equity fund.

Will a 5 December 2024 18 day : 4/8/8 base and a Decay Fractal series of 18/45/45 days :: y/2.5y/2.5y take both indices to the natural nonlinear nadir low valuation?