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Google's Valuation Fractal Confirmation of Lammert Quantitative Saturation Macroeconomics

27 February 2011 Google's Valuation Fractal Confirmation of Lammert Quantitative Macroeconomics

It is the available placed-into-circulation, borrowable, spendable, or speculative money supply that supports asset valuations. The self correcting expandable  macroeconomy is like an umbrella. The cloth covering of the umbrella represents asset valuations which can be stretched and made taunt  or closed  and deflated. Asset valuations are expanded and contracted  by interest rate, lending, and  monetary policy with money creation ex nihilo by the central bank of world's global reserve currency  a recent extreme example of placing money into circulation needed for the system to survive. The macroeconomy's control system is the umbrella's skeleton:  the titanium handle and metal webbed structure that defines the frame of the umbrella.  It is the frame that provides the limits of expansion and contraction.  The global macroeconomy's titanium frame is real supply and real demand; and real job volume and real wages based on that real supply and demand.  The  standard of living differentials among the east and west, the use of technology to offset labor cost, the cost of transoceanic transport of goods, and energy source utilization and availability are subcategories of supply, demand, jobs and wages.

That said, the amount of money printing to maintain the continuity of US Federal government annual expenditures of 3 trillion dollars is staggering compared to other nations who buy dollar denominated  oil, grains, commodities, and other finished products by marginal dollar profits made after raw material cost, domestic manufacture, export transportation and reciprocal import tax cost, and wholesale discount cost to US wholesalers for US consumers. The annual trillion dollars printed by the Federal Reserve  represent four years of dollar profits by China, essentially negating the value of Chinese raw material, labor, and manufacturing cost.

In the end it is the metal webbing superstructure of the global macroeconomy, not one Central Bank's money printing, that defines the limitations of peak asset valuation.

Construction of residential and commercial real estate is a principle global economic activity. Far far too much was globally overbuilt with far far too great overvaluation in the last decade by the leveraged lending schemes, interest rate policy, and monetary policy defacto collusion of the Goldman Sachs,  GSA's, corporate banks, FIRE industries, US government politicians, the US Central Bank and other central banks, and governmental nonoversight agencies.  A great global supply of east and west housing sits on the global market curtailing a major component of worldwide basic economic activity with a substantial multiplier ripple effect. The months of reckoning are at hand for US, state, and local governments who cannot print their own money to maintain their promised entitlements and nonfederal local and state tax dependent workers. The US Central Bank under pressure from its world creditors to maintain the dollars value, are unlikely to print dollars for state and local entitlement and worker support.  The smaller economic  PIGGS countries of Euro Union  share the America's state and local governments' bad position of inability to print money.

Worldwide retrenchment is on the doorsteps of the global macroeconomy.

GOOGLE asset valuation is the leading edge of the macroeconomy.  Information and information technology while not delivering the late 1990 promises of a new source of sustained economic  growth is and will be the portal for entry into the future. The instantaneous sharing of ideas will rapidly accelerate global technological advancement with the possibilities of another electric motor or transistor.  Because of the interest The interest level in GOOGLE among investors/speculators, GOOGLE will make its corner turn at the low of its saturation valuation levels antecedent to the Wilshire.

Since its inception GOOGLE has followed a perfect LAMMERT four phase quantum fractal growth and decay series: x/2-2.5x/2x/1.5-1.6x. This four phase series composed of three quantum growth fractals and one quantum decay pattern was defined antecedent to GOOGLE empirical valuation evolution  in the 2005 main page of the Economic Fractalist.

GOOGLE's monthly unit three phase growth and one phase decay  x/2-2.5x/2x/1.5-1.6x quantum fractal which composing its great first incipient natal fractal is proportionally 8 months/18 months/16months/13months or 8/18/16/13 months. GOOGLE's first base fractal is composed of 52 months and is an exact reflection of interested speculator/investor money available to support its valuation throughout the 52 month time frame.

At its 4th fractal, 13 month low,  and completing its first 52 month major base fractal, its valuation was higher than the peak of its first IPO  incipient 8 month fractal base. This positive delta valuation reflects the ongoing and incrementally progressive  global money interest in GOOGLE. GOOGLE's 52 month low valuation anteceded the Wilshire's low by 16 weeks but followed gold and silvers' and correlative XAU's  basing lows by 4 to 5 weeks. Gold and silver's valuation rise has been accelerated in a caricatured manner  by the US Central Bank's money printing,i.e., ex nihilo purchasing of US debt instruments. The Chinese  who have a 250 billion  dollar annual balance of trade  advantage with the US have purchased no net US debt instruments over the last year.

Since March 2009 - and antecedent to that time with massive bailouts of the global private FIRE industry - US, Euro Union, British, and Eastern printing of money have greatly supported and inflated commodity and equity valuations over the valuations which would have transpired without such unprecedented historically extraordinary massive underpinning. With the repetitive US government  extensions of unemployment benefits which has a positive multiplier effect, there is a feeling of relative normalcy among citizens. In the asset derivatives markets there is a feeling of extreme euphoria and optimism that characterizes peak valuations.

Even with the world central banks' massive intervention and the money printing equivalent of ongoing purchase of US debt instruments, peak asset valuation is at hand.  Monetary policy has made the stretch on the the cloth of derivative asset overvaluation. But the umbrella's titanium superstructure is defined by the quantum fractal timing of Saturation Macroeconomics. The real global economy's oversupply and lacking demand - and its waning total jobs and total wages based on that oversupply and lessening demand - elements which represent the global macroeconomy's superstructure metal parts of its umbrella - provides limits to money printing and the time limits for peak valuation are near.

A reckoning is at hand and GOOGLE's evolving great second fractal of  2x-2.5x or 104 -130 months (with a 52 month base fractal) points to incipient asset deflation.

The 104-130 month second fractal began in November 2008. On a monthly basis a 5/12/10/4 of 7-8 month fractal is observed. This would represent a 31-32 month first sub base fractal of a  31-32/ 77 to 80 month two phase series second fractal composing a total length107 to 111 month second fractal to the 52 month incipient base and ending in 2018.

The terminal portion of the 5/12/10/4 of 7-8 month is expected to end in May-June of 2011 and be lower than the November 2008 low. The peak in 2 weeks or 7 to 8 trading days  is predicted based on the quantum nature of saturation macroeconomics.

Observing the current fractal patterns of different equities for a final peak day:

 Wlshire 13//31//9/11 of 18 days
 NEM    46/84 of 92 days
GOOGLE 23/39 of 46 days

A final saturation high or lower high is likely in 7-8 trading days or on 8 to 9 March 2011.