The Asset Debt System’s Self Assembly Final Lower High US Bond Interest Rate : The 20 June to 23 August 2012 y/2.5y/2.5y :: 8/20/20 Day Decay Fractal

The US Bond’s Final Lower High Interest Rate will coincide with the countervailing tax advantaged equity class’s final lower high.

The Wilshire’s 11 October 2007 nominal high (the date predicted prospectively by saturation macroeconomics) at 15940 with a competing US ten year note interest rate of 4.6-4.7 percent will remain a higher nominal valuation than the 23 August 2012 secondary high with a competing  US ten year note at approximately 2 percent. This underscores the profound weakness of the equity class.

Saturation Macroeconomics: the debt-asset macroeconomic system as a predictable science.

What is science, but patterned behavior?

Physics, chemistry, and biology are all characterized by self assembly patterned behavior.

The patterned self organization of the subatomic particles in precise ratios to form protons and neutrons; the self assembly nature of protons, neutrons, and electrons in forming the elements of the periodic table; the further self assembly of those elemental unique atoms into molecular arrangements and the precise chemical reactions and biochemical reactions producing the more complex organic amino acids, nucleic acids, self assembly proteins forming the cell’s and neuron’s cytoskeleton microtubules and forming  the long chained amino acids self conformational-folding enzymes which self regulate cellular activity; the sperm egg DNA programed self assembly process that unfolds in a mechanical deterministic way and represents the improbable science of embryology, the larger collection and self organization of matter creating solar systems, galaxies; and the sum total fields produced by the known universe self organizing collections of matter and its newly corroborated Higgs boson.

The earth’s quadrillion dollar equivalent debt asset macroeconomic system is puny compared to the universe’s smaller and larger self assembly systems – but that system and saturation macroeconomics  is part of the larger deterministic system and it too has the property of self assembly.

Saturation macroeconomics, one day, will become recognized as an equivalent science.

One fifth to one quarter of the debt-asset macroeconomic system’s one quadrillion dollar equivalent valuation is debt. 99 percent (if one considers corporations and the financial industry as people) is owed by the 99 percent who trade future labor and service for immediate consumption of available assets. On the other side is the 0.05 % Trans-Generational Wealthiers, who own the debt (and the future labor and services of the 99 percent). The Trans Generational Wealthiers consider the owed debt as a positive asset entry on their total wealth valuation ledger.

Observe the 30, 50, 80, 223 years patterned valuation charts of the Wilshire (and its progenitor equity class earlier railroad and canal stocks). What particular individual news or political events caused the Wilshire’s and its progenitors’ regular periodic patterns?

The answer is none.

While the Wilshire currently valued at 14 3/4 trillion dollars represents less than 0.15 % of the quadrillion dollar equivalent global asset-debt total valuation; it represents on a daily, weekly, monthly, yearly basis: the exact summation of the total asset-debt system’s operational status at any particular point in time.

Those periodic rising and declining valuation patterns of the Wilshire were caused by credit expansion, immediate consumption, asset production and oversupply, asset overvaluation, saturation of the worthy and not so worthy debtor population, and  finally bad credit liquidation.

After 223 years of patterned behavior since the signing its constitution, the hegemonic US and the world have reached an apogee of bad debt creation, asset oversupply (and overvaluation), and a generally forwardly consumed saturated status.

Can the timing of the global equity crash be accurately predicted?

It is in the US long term sovereign debt valuation saturation curves that the dominant pattern exists for determining the timing of the secondary peak valuations and, thereafter, the historical nonlinearity of valuations in the countervailing equity and commodity asset classes.

Retrospectively, does not the 30 year US bond purchased at 6–7 percent in the late 90′s looks like one of the best of all quality ‘investments.’

As the world undergoes weaker (non US) sovereign debt default, US school, city and county and perhaps state debt default, similar global local municipal debt default, industrial debt default(consider the recent articles about the debt  and liquidity problems involving the saturated container shipping industry as representative of the inevitable global declining trade activity), private citizen credit card, college loan, car loan, and first and second mortgage debt default….

The massive default on non-sovereign debt is at hand and quality sovereign debt, i.e.,
US thirty year bond interest rates will plummet to less than 0.5 percent.

Can the US repay its sovereign debt?

It can and it will; It will repay every dime, nickel, and penny.

The US, as the sovereign hegemony, is the sole owner of its dollar denominated monetary system.


The 2012 Quadrillion Dollar Equivalent Debt-Asset Self Assembly Deterministic Macroeconomic System: Gold Valued in Dollars at the Terminal Portion of the 155 Year US Equity Second Fractal

Asset-Debt Saturation Macroeconomics:

The US price level dropped 25.9% from 1929 to 1933,  while real GDP dropped 28.7%
Given the drop in real GDP, the US experienced excess  price-level deflation of 34.1%

This was the terminal end of the first subfractal series ending in 1932  of the US Equity 158 year Great Second Fractal starting in 1858 and ending in 2015.

Those in monetary, economic, and political leadership positions at the time of the deflationary collapse of 1929 to 1932 later recanted or revisited their positions of beneficial economic and debt deadwood cleansing by allowing nonintervention free-fall collapse.

Hayek,  Robbins, Mellon, and Hoover all later gained perspective and an appreciation of  the critical effect of the generational boom-bust deflationary collapse on displaced destitute citizens, the global movement towards extremism and  fascism, and the natural progression to a global unprecedented world war.

Ultimately, without demand and credit for anything else,  citizens were paid wages to wage war against other like citizens of the world who had no  peaceful opportunities in a debt and asset saturated macroeconomy.

That was at the terminus of the US 158 year great Second Fractal first subfractal series in 1932.

What will be the response of the political and monetary and treasury system at this the terminal portion of the second subfractal series lasting from 1932 to 2015?

A national real bills doctrine operated by the Sovereign verses the private banks  would directly trade sovereign currency for socially useful real work – no need to go to war to employ citizens and avoid domestic chaos secondary a debt-asset saturated system.

No need to bother or tax the super rich for their contributions to their established system of laws that promotes fraudulent usury, trans generational wealth transference, 400 years of compounding of interest on loaned money not originally in the vault, favored tax advantages on non work related interest and speculative profit, and safe place during major wars….

Let the sovereigns create money to trade for socially useful work within their own countries.

Useful work, services, and products is, after all,  the benchmark for a good currency.

A national real bills doctrine  for all sovereign nations using their own currencies will trade national currency for work sans work as war.

This approach is not inflationary. It just maintains the system and allows the global system to unwind its debt load.

Turning back to the first subfractal ending in 1932 of the 1858 US 155 year second fractal……

Hoover blaming Mellon as a liquidationist …

“Who Were the Liquidationists?
The most widely cited evidence that liquidationism had official influence is a passage from
The Memoirs of Herbert Hoover in which Hoover denounced Mellon for advising him not to interfere with the downturn that began in 1930. Hoover wrote: Two schools of thought quickly developed within our administration discussions: First was the “leave it alone liquidationists” headed by Secretary of the Treasury Mellon, who felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: “Liquidate labor, liquidate stocks, liquidate the farmers ,liquidate real estate.” He insisted that, when the people get an inflation brainstorm, the only way to get it out of their blood is to let it collapse. He held that even a panic was not altogether a bad thing. He said: “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”


Saturation Economcs: The Quadrillion Dollar Equivalent Debt Asset System’s Self Assembly Follow-on of the 40,000 Nikkei: 57/129/113 months :: x/2.5x/2x

Saturation Economics…..

From the Main Page of the 2005 The Economic Fractalist
“The ideal growth fractal time sequence is X, 2.5X, 2X and 1.5-1.6X. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x. The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point.”

How much of the world’s private debt, business debt,  poor country sovereign debt, state debt, county debt, city debt, European debt – how much of this accumulative debt is bad debt -that which can not be repaid?

The global debt-asset macroeconomic system is mathematically self assembling in its countervailing asset saturation curves to a nonlinear saturation  break point when the dysequilibrium of too much debt, too many overproduced and over valued assets, and declining total wages from decreasing demand – cannot service the global debt load.



The countervailing asset saturation curve is long term US debt….