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The Economic Fractalist
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  • The Wilshire: 40/80 weeks :: x/2x ....... An Epiphenomenon of the Nonlinear Universe. 0 comments
    Jan 17, 2011 6:11 AM
    The Wilshire: 40/80 weeks :: x/2x   .......  an epiphenomenon of the nonlinear universe.

    In this synchronized series of second fractal windows of equity asset derivative valuation saturation curves - perhaps starting in the mid 1690's for the British hegemony and at the start of the US constitution in 1787 to 1788 for US paper assets- another curvilinear interpolated second series of 40/80 weeks has appeared composed of a first fractal of 7/16/19 weeks and a second fractal  of 15/38/29 weeks.

    The Wilshire minutely gapped to new highs on 14 January 2011 - the fifth day of a reflexic blow-off pattern of 2/5/5 days.

    A negative interest rate US treasury policy losing value each day to commodity prices and 5 percent  GDP several trillion dollars of electronic QE on the US central bank's accounting system for three years running has allowed the US macroeconomic system to expand by lesser annual GDP percentage points. Linear thinking economist see this a continuation of the past where the lender of last resort has temporarily replaced real economic borrowing resulting in real growth. However, US employment rests at 2000 levels - employment that is theoretically obligated  to repay QE to make the US monetary system right with the developing world who buys the world's raw materials and sells their finished products in those same without effort created dollars.

    US states and European PIIGS cannot print their own money; their tax base is shrinking and property values declining;  the US Central Bank and Germany mutually have little interest in funding unrealistic US state and PIIGS promises disconnected from any real economic means to fulfill those promises.

    At this point of extraordinary central bank intervention no one can fault the Federal Reserve for not making a serious effort to preempt the inevitable synchronized second fractal asset derivative valuation deflationary collapse.
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