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  • The Central Banks' Sovietization of the Global Economy 0 comments
    Dec 5, 2009 2:10 PM

    The Central Banks' Sovietization of  the Global Economy: Saturation Economics

    Lammert Saturation Economics and the Monetized US Transportation Index

    The world central banks have sovietized the global economy.  The private economy is now overmatched, now a minority share holder of the whole global economic pie.  The world central banks' primary purpose: to collectively maintain the debt obligation system, the property system, and, in general, the wealth system of the extraordinarily  wealthy through interest rate policy and through collaborative or collusive governmental lending rules,  regulatory rules, entitlement policies, and  competing percentage of total employment within the economy -   this past purpose has now been superseded by the central banks' massive and conceivably infinite monetization,and sovietization equivalent, of monetary and economic system.

    The 80 year soviet operation was a central bank, central politburo run economic system.  The world's operative primarily private economic system based on reward for innovation and production gradually withered the soviet system's ability -  with its higher and higher debt load, its costly military invention into Afghanistan, and simply its without the wherewithal to repay - to competitively exist. It was the world's private sector Adam Smith competition that collapsed the Soviet's central bank, centrally-planned system.

    Now the world central banks have assumed the Soviet's central bank role - but notably without a countervailing real economy competitor.  The central banks can buy as much debt as is needed to maintain the flow of money to government funded direct and indirect employment, unemployment benefits, and entitlement benefits.  The financial, insurance, and real estate 'private' sectors/industries representing a preponderant portion of the economy that is 'not directly or indirectly funded by the government', are in fact an exact part of the wealth system that  the central banking system supports and is one with.  This industries are and they will be the disproportionate direct benefactors of the new central banks' monetization and defacto sovietization policy of the macroeconomy.

     The real private sector will progressively undergo noncompetitive reduction. What is the incentive to produce valued items when the denominator benefit can be created from nothing?  

    More 'ownership' of bad debt smoke stack industries and underwater real estate will be transferred to US tax payers' ledgers; central banks will continue to create electronic ledgers buying debt without counterbalancing value, and central bank sovietization of the global macroeconomy - without a real economy competitor - will metastasize to consume the remainder of the private economy.

    The economic pain that must be endured for the global system to reequilibrate where assets prices, asset and valued services supply, wages, and jobs available to produce those wages is now so great at this millennium macroeconomic  generational debt saturation area that the central banks' monetization is likely the only politically and socially acceptable solution. What must transpire will transpire. The process of central bank monetization of debt and governmental obligations and the resulting sovietization of the global economy is very likely to continue as the necessary doable worst solution - resulting in greater and greater extremes of wealth maldistribution.

    If the 1930's percentage characteristics of private sector  vice public sector employment existed at the beginning of the 2008-9 economic implosion, western December 2009 unemployment rates would likely match or exceed the extremes of the 1930's.  With US postal workers representatively remunerated at 25 dollars an hour, central bank monetization of debt provides substantial cushion to the deflationary course, retrenchment, funding realities and necessities generated by an operating real economic system.

    In some ancient civilizations, new ascending kings would issue an edict forgiving all personal debt and initiate a new debt cycle. With the central banks' purpose to maintain debt obligations, property, and in general, wealth of the established wealthy, the ancient civilization debt forgiveness for the masses is an unlikely scenario.

    Nevertheless the equity, commodity, and debt valuation saturation curves proceed, caricaturized and frankensteined by world central bank ex nihilo relatively massive purchase of short term debt and currency exchanges where massive amounts of electronic money backed by nothing is created by mutual central bank exchange agreements.

    US transports were a leading equity valuation indicator in the early 2000's. A favored new transportation industrial system  over domestic manufacturing involved low cost Asian shipping container products trans pacifically transported and entered into western American ports, and distributed via rail and trucking  throughout the US to newly franchised distributors. The Asian produced real goods in return for US debt, directly benefiting  the expanding transportation industry and its derivative equity index . For the Asian producers,that debt still buys world energy.  Likely central bankers have assured the Asian governments who hold America's debt , that the central bank has no interest in competing in the oil market and buying oil with central bank newly created money.

    The predominant monthly fractal pattern for US transports starting in 2003 is 13/30/26/16 of ideally 19-21 months for an ideal Lammert Growth and Decay Saturation Fractal Pattern of x/2-2.5x/2x/1.5-1.6x.  :: 1st/2nd/3rd/4th fractals;the first three are saturation growth fractals and the last 1.5-1.6x or 4th fractal, the primary decay fractal.

    Likewise an ideal y/2.5y/2.5y monthly decay beginning in the 3rd growth monthly fractal is easily observable :: 8/20/15 of 19-20 months (as of December 09).

    The terminal area  of this decay 8/20/15 of 20 month decay fractal closely matches the terminal portion of the 4 phase 13/30/26/16 of 19-21.

    The weekly sequence to a final low for the transports is ideally 22+/40 of 55-57 weeks

    The 40 week growth US transport progression since March 09 has been bubbled with world bank monetization, and for the US, the Federal Reserve's purchase of over 300 billion dollars of US debt - dwarfing the 9 month money flow into US equities.

    The 40 week fractal is composed of 2 subfractals: the first a  19-20 week x/2-2.5x/2x sequence of 17/40/34 days.

    The first 19-20 week subfractal is followed by (currently 5 December 2009) a 21 week fractal likely following a fractal patten of 8/14 of 18-20/12-13 weeks which  matches the terminal portions of the 22+/56-57 week fractal and the 13/30/26/19-20 and 8/20/19-20 weekly fractals.

     The first 8 weeks or 38 days of the 8/14 of 16 -20/ 8-13 week fractal is composed of a 9-/18/13 day fractal.  Noticed the very clear nonlinear break between day 17 and 18 of the second fractal, which characterizes second fractals.  The 14 of 17-20 week second fractal series is composed of 66 days which in turn is composed of two subfractals of 22 and 45 days.  The terminal portion of the 38 day (8 week) first fractal would be between 76 and 95 days (16-20 weeks).   A final fractal of 8-13 weeks could result in a lower low or flat valuation depending on the degree of intervention of the central bank in the longer term debt market.

    US Treasuries are following a 9/22/18/10 of 13-15 week fractal with expected zero or negative  yields within the next 3-5 weeks. On a daily basis the terminal daily decay fractal composing the 13-15 week 4th fractal is 13/32/11 of 32 days.

    This is no longer an equity market where PE's ratio's have any real meaning.  The Central Banks' intervention in the debt market has made  all valuations relativistic. They have sovietized the global macroeconomy and are on their way to ownership of the system's citizens.

    All will eventually work for the world's central banks, the self designated and sole manufacturers of the world's money.

    The Financial Trust industry well understands this and will make extraordinary gains via their sister organizations', the central banks', unregulated and absolute control of the money system.

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