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  • 70/140 years :: 10 October 1998 /////// November 2010: The Lower High Saturation Area of The Wilshire's 49/98 Month Extended x/2x Fractal Series from October 1998 /////// Second Fractal Collapse: Best Case Scenario: Wilshire Valuation: 3725 0 comments
    Nov 21, 2010 9:59 AM

    The Lower High Saturation Area of  The Great Global Macroeconomic  Deluge: November 2011: the Wilshire 98th month of October 1998's 49/98 Month First and Second Fractal Extended 70/140 Year US Great First and Second Fractal Series


    The October 1998 Wilshire  49 month base fractal extending the 70/140 year ::  x/2x series starting coincidentally with the establishment of America's constitution in 1788 is composed of the following fractal subsets:

    4/10/10 months :: x/2.5x/2.5x fractal  - an extended growth fractal
    3/7/7 months :: x/2-2.5x/2-2.5x fractal - an ideal  decay fractal
    2/5/4/3 months:: x/2.5x/2x/1.5x fractal:: an ideal deteriorating 4 phase growth and decay Lammert 4 phase fractal series and a transitional fractal:  4/6 months with the 4th month  at a multiyear low on
     9 October  2002 and concluding the 49 month October 1998 first fractal base.

    The horizontal 6 months from 9 October 2002 until March 10 2003 is joined with 6 months from 10 March 2003 until 5 August 2003 for a base fractal of 11 months:
    The x/2.5x/2x/1.5x monthly sequence is 11/27/22/17 months with a low on 21 November 2008.

    This is followed by a 5/12/10 month fractal x/2.5x/2x ending in November 2010.
    The Wilshire's initiating 5 month fractal base of the 5/12/10 month sequence has nodal low days of 21 November 2008 and 6 March 2009 with 6 March 2009 a lower low than 21 Novemebr 2008.  The 12 month second fractal ends on 5 Feb 2010.

    November 2010 represents month 10 of the 2x length third fractal of the x/2.5x/2x :: 5/12/10 month sequence.

    The Wilshire monthly 5/12/10 fractal series corresponds to a 19-20/49/39-40 week :: x/2.5x/2x fractal series with 4 weeks 'borrowed from the preceding decay fractal.

    Gold represented by XAU and HUI and benefiting from QE showed positive valuation growth in the first 5 month fractal following the same 5/12/10 month sequence corresponding to a 20/49-50/41-42 week fractal.

    The best case scenario for the Wilshire's valuation at the end of this second fractal collapse valuation would be 3725.

    This is using the all time nominal high of 15938, the low of 6772, and November current secondary high of 12891.

    The Wilshire's November 2010 secondary high valuation has been artificially elevated by 100's of billions of central bank dollars competing in and supporting  the US treasury market over the last 18 months. As well the  trillions used to shelf bad real estate assets  has supported dollar denominated  equity and commodity valuations.

    Without ongoing similar future  central bank support  the Wilshire's valuation will be substantially below the best case scenario.

    From a perspective of quantum saturation macroeconomics based on a forward consumption and a debt based economic system which has been the model for human activity since number, accounting, and tax  systems originated 4000 years ago, the current second fractal collapse will be dramatic.

    The US economic system represents an extension and interpolation of the British hegemony.
    A longer cycle beginning in 1695-98 and ending near the US constitution formation may  represent a longer first fractal base for the 70/140 year US fractal series beginning in 1788.

     The 4/8 x/2x year extension beginning in October 1998  and ending in November 2010 of the 70/140 year US fractal series is related to the 1695-98 to 1788 year British ancestral base that  includes the famous South Sea Bubble.

    ECCE the 25 May Nikkei futures 8/20 day perfect fractal series was the second subfractal in a Wilshire 31/78/62 day fractal series x/2.5x/2x  beginning on 24 March 2010 and ending on 19 November 2010. The US ten year bond follows this same pattern.

    The 78 day second fractal was composed of a 14/27/28/12 day caricatured fractal with the 27 day perfect NIKKEI fractal the second subfractal of this series. The 31 day first fractal ended on 6 May 2010 known as the flash crash.

    Considering the qualitative financial state the US finds itself with debt and entitlements that cannot be honored via the labor of future wage earners, with the tax based declining property values, and with the saturation and gross oversupply of the real estate market which was America's last great domestic  manufacturing  area, the coming massive delta value/delta time nonlinearity  of equity and commodity prices will be rapidly explainable in terms of traditional deflation forces.

    While central bank intervention can artificially raise derivative asset valuations, the quantum fractal patterns that define the limits of the debt based forward consumption based  global macroeconomic system  remain easily observable.

    The utility of the quantum patterns of saturation macroeconomics is this: the quantum patterns shows a system that has limits. 

     Understanding the macroeconomy as a self organizing defined limited system with time based quantum limits and predictable and necessary asset valuation corrections can aid policy makers and central banks avoid  asset bubbles produced by interest rate related and lending parameter related excess consumption.

     


     

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