2005: The von Mises Blog: the Smart Austrians: the Qualitatively Correct Economists of a Very Quantitative Debt-Asset Macroeconomic System...
(The January 201o Wilshire Saturation Area : 27/55-56/54 days x/2-2.5x/2x)
Published: October 27, 2005 a bit (month-wise) before the collapse ...2005 2:48 AM)
The Fed, as the following suggests, has limited power especially at the end of major economic cycle. The Fed can lower interest rates but it can't make people borrow nor lenders lend at the end of a major economic cycle . Fractal analysis suggest that that is the exact position of the macroeconomy - at the very end of a very large 147 year cycle...
The fractal decay puzzle which retrospectively will epitomize
maximum mathematical efficiency in the three fractal primary decay process must be solved prior to its evolution in order to validate fractal analysis as a fundamental 'science' of macroeconomics.
At its smallest time units, equity valuation growth to trading
saturation points and decay to selling saturation points makes
intuitive sense. At the longest time units, growth to the consumer debt saturation point based both on collective limited wages and overvaluation and overproduction of assets which in turn are based both on low interest rates and creative easy lending practices is followed by a contraction and decay process of asset values that unmasks the surpluses in the system and results in job contraction and lower wages based on those ongoing surpluses and contracting prices.
This longer perspective likewise makes intuitive sense.
Equity valuation fractals quantify, in the most efficient manner, this qualitative intuitively reasonable process. The markets are not - theyare not random walks. The markets are defined by dollars available for investment, current total value of investments and assets, ongoing wages, outstanding debt obligations, and inflationary pressures of day
to day living fueled by low interest rates, imprudent lending
practices, and inappropriate money creation in relation to traditional debt to wage ratios. The numbers 1-10 and fractions and multiples thereof define the ongoing valuations, debt, and money supply that is the market. That the market 'marches' and otherwise evolves to a beat of efficient fractal patterns that represents the total integration of these numbers into repetitive maximum efficient patterns is wholly reasonable.
The probability that the retrospectively identified recurrent fractals patterns occur by chance alone approaches zero. The challenge remains to decipher the non complex puzzle and to delineate the decay process prior its real time evolution. If it can be done, it will be the first time that quantification of the valuation decay process has been accomplished before the event. Ludwig Von Mises and Joe Kennedy by
different methodologies in 1928 and 1929 intuitively sensed in a qualitative way the lurking decay process and collapse and acted accordingly.
Just as in 1929 and 1720, consumer saturation and/or asset
overvaluation relative to ongoing wages and debt load will be the precipitating cause of the mechanistic deterministic non stochastic fractal decay process. By lowering the fed fund rates to extreme low levels and not controlling lending practices, the Federal Reserve and government caused excess borrowing, excess valuation, and excess production - with expected excess pain in the subsequent natural and mechanistic devolution process. By its ongoing raising of fed fund rates the Fed has placed boron rods into the uncontrolled reactor and
decreased the highs of overvaluation with an expected lessening of pain in the devolution. Hence the Euro- Nikkei markets with relatively less tightening by their central banks have had higher recent terminal valuations. Regardless of the degree of overvaluation, devolution will inevitably occur and will inevitably occur on time according to the most efficient fractal decay progression Just as the Federal governmen and the Federal Reserve with its large check book and rapid lowering of interest rates, respectively, could not change the couse of the devolution in 1929-1932 and 2000-2003, so will they be powerless to change the course of the present devolution.
The perfect often stated fractal growth pattern is x/2.5x/2x followed by an idealized decay of 1.5x. This last 1.5x can be subdivided into an idealized decay fractal pattern of y/2.5y/2.5y.
TNX, the ten year note, had an exhaustion gap on Wednesday 26 October, day 38 of a 19/48/38 of 38 perfect growth sequence. What is possibility that this perfect x/2.5x/2x growth fractal with an exhaustion gap on the last day of the third growth fractal evolved via this perfect fractal growth evolution by chance? Had there been a key reversal today, it would have been a completely perfect pattern in concert with a
possible major reversal point for the Wilshire. 27 October 2005 will be a most interesting trading in this context.
An intriguing possibility exists that the second fractal for the
equity composite Wilshire has already been completed. A 19/48/ 10 of 45-48 fractal decay pattern is now evident to this myopic fractalist. In this fractal solution 35-38 more trading days exist to a primary bottom with nonlinear devalutions of potentially massive proportions contained within those 35-38 days.
A slope taken from the first day of the second fractal to the last day of the second contains all of the lowest values for the intermediate days - except 2-3 days. And even those days touch the underlying slope line at the bottom most areas of their daily valuations.
By repetitive inductive and retrospective fractal analysis,
macroeconomics appears to be a recurrent cyclical process of natural growth, saturation , and inevitable natural decay flowing in recurrent, nearly quantum, maximally efficient fractals of incremental time proportionalities. Growth and saturation represents the bulk of the cycle. The terminal devolutions are a very small part of the total economic life cycles; they are nonlinear; and the declines are proportional to the antecedent excesses in growth, debt, and overvaluations at the summit saturation levels.
Gary Lammert www.economicfractalist.../
Published: October 27, 2005 3:18 AM
"...the mechanistic deterministic non stochastic fractal decay process."
Holy adjective overload, Batman!
Published: October 27, 2005 7:42 AM
As I wrote in an earlier comment on another thread, Mr. Lammert has made a bold prediction that we can all follow. He will either be wrong, or he will be correct.
Published: October 27, 2005 8:53 AM
It says in the news that Secretary of Treasury John Snow sez that a strong dollar is in America's best interest.
This is unbelievable!!!! This person has the gaul to say this when this administrations has done everying in its power to reduce the value of the dollar.
Published: October 27, 2005 4:14 PM
Have you ever heard of Ludwig von Mises?
Published: October 30, 2005 6:14 AM