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  • The New Science of Saturation Economics: Predicting the Saturation Peak Asset Valuations and the Nonlinear Low Valuations 0 comments
    May 22, 2010 7:07 PM
    The Science of Saturation Economics: Predicting the 11 October 2007 nominal Saturation Peak of the Composite Equity Market and a Major Nonlinear Nadir.

    What s the probability that the very recognizable longer-time-unit-asset valuation fractal patterns are occurring by chance and the that the shorter time unit patterns composing the larger patterns are ordered and structured in the same proportionalities which characterize fractals?

    Is there utility in understanding the asset valuation saturation  patterns in the application of determining (moderation in) monetary policy, deficit spending, and interest rate policy, and in determining new rules that will curtail economically useless speculation, financial trust fraud with unfair manipulation of electronic currency and debt generation and fraud in trading derivatives of both real assets and second and third derivatives of real assets?

    The 5 February 2010 ::14/30/26 day:: caricatured x/2x/2x  daily final saturation fractal can be average-integrated with a lower high third fractal on day 26 or 13 May 2010 of an averaged 13/31/26 day growth fractal with the Wilshire's secondary secondary high at 12283.65. The 26 day 2x third fractal's saturation peak came exactly on day 'x' or day 13 on 26 April at 12777.66 and had the technical footprints with a minutely open gap high and ending near the low of the day. 26 April 2010 represented the final secondary high of the 11 October 2007 nominal all time Wilshire high at 15938.99.

    By a Lammert 1.5-1.6x decay periodicity the trading time from the third fractal's 26th day lower high to final low should ideally be 1.5-1.6 times the average base fractal of slightly less than thirteen days. (a 13 day base fractal with yield a 2,5x second fractal of 32-33 days.)  The ideal length of the 4th decay fractal would be 19-21 days.

    As of 24 May 2010 the ideal 4 phase sequence would be 13/31/26/day 8 or 9 of 19-21 days.  (in fractal numbering 26 April could be counted twice because it starts on a high and ends on a low.

    If the devolution follows this daily fractal pattern it will match the conclusion of a great decay fractal of 35(minus)/86/86 :: y/2.5y/2.5y weeks and the conclusion of a x/2.5x/2x/1.5-1.6x  :: 14/35/28/21-22 month fractal which is the second fractal conclusion of a 46 month base fractal starting in October 1998.

    This daily sequence concludes many larger second fractals. The expected nonlinearity will be striking. This nonlinearity exactly corresponds to an over extended and over leveraged debt dependent world economy.

    The effects of major central banks' near zero interest rate policies have been to maximally extend commodity and equity asset valuation saturation growth to points near the terminal portions of naturally occurring fractal series. Taken another way, valuation growth has been lengthened within a longer dominant decay fractal. This shortens the time frame for  nonlinearity in the terminal portions of y/2.5y/2.5y decay fractals, the 4th decay fractal of a x/2.5x/2x/1.5-1.6x growth and decay fractal series, and multiple second fractals of synchronized x/2 - 2.5x first and second fractal series.

    More deficit spending will occur. Politically, in a debt dependent and entitled system, it must occur.  The real economy will shrink as governmental spending cushions asset deflation and continued loss of jobs in the real economy secondary to asset production overcapacity, asset oversupply, and asset overvaluation - all caused by lack of prudent monetary policy. Banks will not lend in this environment. The private economy will not borrow. The Financial Trusts and their defacto or in reality collaborative partner Central Banks will continue their double entendre absolute 'monopoly rights' on the monetary system.

    This is not the 1930's. Unlike the 30's a massive conduit of US federally supported activities already exists and can be easily expanded via fiat electronic money creation. Perhaps this is the only reasonable pathway to ensure societal and global stability.

    While the debt-asset-wage macroeconomic system's limits and characteristics are defined by the science of saturation macroeconomics and while the fractal nature of that science belies the fractal nature of its greater parent energy-void universe, it is unlikely that world decision makers of the next hundred years will ever apply this science - which points the way to moderation and promotes rationality in monetary policy and debt policy - to any practical use.





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