The Bernanke Plan: Sacrifice Savers to Recapitalize Banks and Benefit Debtors [View article]
A solid article. The twin issue is the malinvestment bubbles that 0 interest rates create. Savers at some point give up and enter other available yield vehicles, ie, equities and commodities.
The science of saturation macroeconomics www.economicfractalist.../ predicted the 11 October 2007 high and is predicting a major near term devolution in the equity and commodity markets. The Nikkei futures gapped blow-off of two successive days on 1 and 2 April suggest a saturation area, although a gapped higher day ending on or near the low like 11 October 2007 for the Wilshire would be a more classic representative day of the final saturation area.
The financial industry owes Reuters, Associated Press, et. al. and spews out positive economic news near the top of the equity-commodity euphoric saturated areas to lure yet more savers into the distribution saturation areas. Amoral crooks are running this game.
The Federal Reserve sprang from and is Wall Street. Can the Federal Reserve and other Central Bankers buy their own debt and, via an electronic shell game, each other debts at whatever interest rate desired - cheapening all labor derived savings?
Ultimately, after this coming devolution, the financial industry will cause its own undoing. It will speculative with free money and its laborless prior gains to drive oil prices to record levels despite decreased actual demand in a contracting global real economy.
The middle class and those newly endebted bright graduating students do not have a chance in the world that the Central Bank-Wall Street crowd have and are creating. It is sad that this great country has been brought to its knees by this central bank-wall street-politician collaborative. Too bad the twin RP's, Ross Perot and Ron Paul, didn't team up in the late eighties.
Nassim Taleb on What Should Really Worry Us About the 'Flash Crash' [View article]
Gold's Valuation Fractal's
The procession of gold valuation fractals(denominated in, as an example, US dollars) exactly represents the old yellow relic's worth relative to currencies and commodities. The evolution of gold's valuation fractals likely provides the best linkage and opportunity for understanding the macroeconomy's deterministic ongoing money supply, asset supply, hard asset (over)valuations, total debt, and ongoing wages - relative to the values of the world's individual currencies, equity composites, commodity composites, and debt instruments.
Gold, from 1714 to 1918, denominated in the dominant British pound and from 1787 to 1918 denominated in the US dollar had a relatively constant value of 18-19 US dollars. With the formation of the US central bank and rapid money expansion via fractional reserve lending, gold's first fractal lasted about 15 years from 1917-18 to 1931-1932 with gold averaging 20-21 dollars.
Since 1932 gold has completed two large fractal series following the CRB's growth fractals of 8/20/10 years (38 years 2.5x second fractal) with an initiating fractal in the last 3 years 1968-1970 of the third 10 year period from 1960 to 1970 followed by a 7/17.5/9 year fractal ending in 2001. Notice the proportionality of these large yearly fractal series.
At the end of each period, the money supply enlarged through additional debt via fractional lending and reached an accumulation point allowing gold(and commodities) to proceed to the next quantum level of valuation. A 20.50 average dollar level existed from 1917-18 to 1931-32. With devolution of all assets in 1931-32, gold's low in 1931-32 dollars was below its 1790-1917 average valuation. A 35 dollar range existed from 1932 to 1970. A average 350 dollar range from 1970 to 2001.
Bad debt is currently being liquidated faster than the world's central banks can print money to maintain jobs and wages, the essential structural support element for continued debt repayment on overvalued assets. Hard asset prices are falling. It is the end of a large macroeconomic debt credit cycle which is characterized by debt dependent asset valuation fractal growth and decay progression. By use of gold's proportionality this great credit cycle will conclude in 12 or so years.
Gold represents the linkage to the debt-asset-jobs-wages real economy. Its quantum saturation growth and decay valuation fractal patterns are elegant in their time ordered quantum fractal patterns.
All of the Lammert growth and decay quantum fractal progressions of x/2.5x/2x/1.5-1,6x and y/2.5y/2.5y are easily observed in the monthly fractal sequences between 1992 to 2001, the last 9 years of the 7/17.5/9 year progression.
In 1993 after an initiating fractal of 3 months, a 7/17/14/10-11 month :: x/2.5x/2x/1.5-1.6x progression is observed. Within the terminal portion of its third fractal's 2x or 14 month saturation growth, an 8 month base decay fractal is observed with a 8/20/20 month decay fractal :: y/2.5y/2.5y progression taking gold to a US denominated dollar low in 1999.
At the terminal portion of the 7/17/14/10-11 month fractal a 3/7/7 decay fractal of 15 months forms the bases for a 15/38/38/15 month fractal: the last two fractals which form current 50 month 2001:2005 base.
Likewise within the terminal portion of last 9 year fractal (7-8/18/9 year from 1970-2001), a 21 month initiating fractal formed the base for the 2-2.5x or 50 month first base fractal from 2001 to 2005.
The probability that these ordered fractals are occurring by chance approaches zero.
The current base fractal for gold is 5 years: 2001-2005 with a probable yearly sequence of 5/11-13/6-6.5 and ending in 2021-2022.
Since the conclusion its 2005 first 50 month base fractal, gold is following an 18/44 of 45 month first and second smaller scale fractal series. The 44 month second fractal is composed of a 5/11 and 7/14 of 15 fractal series.
The 7/14 month fractal series is composed of 26/58 of 62-65 weeks.
The first fractal of 7 months or 26 weeks series is composed of an ideal Lammert fractal series of x/2.5x/2x/1.5-1.6x :: 4/10/8/7 weeks.
The second fractal series is composed of 13/31/15 weeks.
A sharp devaluation of gold is expected within the next 5-8 weeks which will correspond to the expected equity and commodity crash.
Will Gold's expected final 2001-2022 5/11-13/6 year fractal end with an underlying curvilinear slope line connecting all valuations from 1917-1918 to 2021-2023 as bad debt is liquidated and hard asset prices are adjusted to ongoing wages and job opportunities? This will conform to a caricaturized x/2.5x/2.x/1.5-6x :: 15/38/30/22 year starting in 1918 and match a 70/164 year :: x/2-2.5x US equity fractal.
The Worst Case Scenario (Someone Has to Say It) [View article]
The US savings rate has climbed to over 200 billion. Its not clear what units 'the savings' are in: stocks. US dollar denominated money markets, US sovereign debt.....
Likely those with 'savings' are the wealthier who are getting wealthier....
This 200 billion increased savings is balanced by 10 trillion dollars of asset valuation losses over the last 5 years and 9 trillion dollars of financial aide to needy financial institutions.
At any rate there is a new macroeconomic hard science that has been defined from the debt dependent asset valuation curves.
The mathematical patterns defining the growth and decay of asset valuation curves are as real and quantitative as any of the laws of physics, chemistry, and genetics...
July 2005 Nonstochastic Saturation Macroeconomics - A New Science
Blog of gary.lammert -A recap of debt dependent quantitative saturation nonstochastic macroeconomics
The Economic Fractalist - An introduction Posted at 2005-07-01 13:54:52 by gary.lammert
Welcome to the small alcove for the advancement of cause and effect saturation macroeconomics. This site pursues the hypothesis that the nature of market valuations and economic cycles is both causal and quantitatively decipherable. Valuations conform to fractal cyclical patterns that can be recognized, interpreted in conjunction with data emanating from the macroeconomic system, and used with short term and long-term predicative power. Information from this site is not intended to be construed as investment advice or as an investment tool. This site has been constructed because of the expected inevitability of a major sudden phase transition to occur at the conclusion of a grand 140 plus-year second fractal cycle starting in 1858. For the masses this phase transition will occur both very unexpectedly and very suddenly. Approaching the global macro economy from such a causal and fractal Weltanschauung may help those considering further debt obligation and those in position of formulating future interest rate and monetary policy. The cyclical nature of the macroeconomic system operates by causality rather than chance. Valuations of assets are controlled chiefly by interest rates - the cost of money. Lowering nominal interest rates, below asset inflation controlling rates, leads to macro economical disequilibria with excessive money expansion through increased borrowing. This expansion engenders unbalanced forward consumption, consumer saturation, overproduction, and inflation of assets and consumer items. With the addition of ongoing wages of the consumer masses, these oppositional elements are countervailing, and periodic macroeconomic imbalances will self correct. Market overvaluation saturation and decay corrections to new lower saturation points occur in a fractal manner. Cyclical patterns can readily be identified on valuation charts denominated in minutely, hourly, daily, weekly, monthly, and yearly units. The transitional asymptote of overvaluation saturation curves are followed by decay curves which bring market valuations to lowered decay saturation levels where intelligent buyers reenter the market. Valuation fractal cycles of yearly and multi-yearly lengths are based on saturation at the consumer level. Human psychology is a decidedly lagging indicator and follows as an end effect of the mechanistic saturation and decay evolutions in the market. Market contrarians understand these turning points and anticipate the directional changes of the markets based both on market asymptotic overvaluation saturation areas or decay end-point saturation characteristics and counter intuitively by recognizing the lagging psychological parameters of extreme optimism or pessimism in reaction to the mechanistic respective high and low points. Both the degree of valuation and the cyclical time course of valuation evolutions appear to conform to range bound near quantum-like units and quantum related Fibonacci numbers. While the absolute degree of valuation is influenced by the absolute interest rate, the percentage or proportionality changes of valuations from highs to lows and lengths of time to decay and intra-cycle nodal points appear to conform to these range bound near quantum units. The ideal growth fractal time sequence is X, 2.5X, 2X followed by a decay sequence of 1.5-1.6X. 'X' represents the fractal unit of time denominated in minutes, hours, days, weeks, months, and years. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. The second cycle may be composed of two roughly equal time units or one confluent time unit. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x, which has import for the current 140 year grand fractal cycle, now in its 147th year. . The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point. The last 1.5-1.6X cycle is primarily a decay cycle interrupted with a mid area growth period. Near ideal fractal cycles can be seen in the trading valuations of many commodities and individual stocks. Most of the cycles are caricatures of the ideal and conform to Gompertz mathematical type saturation and decay curves. Feel free to visit The Economic Fractalist Website. G. Lammert
Apple: Why I Am Strongly Bearish - Take Two [View article]
Apple's 20 June Final Peak Fractal Series: 10/26/15 of 15-17 days
Apple is following a monthly pattern very similar to physical gold and the XAU: a 7/18/13 month fractal series. Gold and the XAU are following a 7/16/14 month growth fractal.
Both Apple and Golds' valuations are supported by the underlying money supply, which is nonlinearly deteriorating secondary to collapsing defaulting debt.. Both Apple and Gold both pay no interest or dividends and are are at the pinnacle of Saturation Macroeconomic's third fractal growth.
For Apple a 20 June 2011 10/26/15 day final fractal series is easily observable. Because final third fractal growth is often a 1.6 ratio of the base fractal Apple's third 15 day fractal could be extended to 16 or 17 days for final 3/8/6-8 day fractal series.
Apple has increased in value more than 50 times from its 2002-2003 lows whereas physical gold has increased by less than 8 times from its 1999-2001 lows.
A four phase 10/26/16-21/15-16 day :: x/2.5x/2x/1.5x fractal series could take Apple 200 dollars or more below its current value with a nonlinear drop after day 16 of the third fractal and a reversal on day 20 or 21 of the third fractal ending on the high of that day and thereafter deteriorating in a 15-16 day fourth decay fractal.
Gold valuation in US dollars will fall for 3 weeks into early October 2010 and thereafter have a very sharp increase for 2-4 weeks with a final high in late December. In Jan and February 2011, a decrease will occur to the 700-750 US dollar level. TEF.
The Bernanke Plan: Sacrifice Savers to Recapitalize Banks and Benefit Debtors [View article]
The science of saturation macroeconomics www.economicfractalist.../ predicted the 11 October 2007 high and is predicting a major near term devolution in the equity and commodity markets.
The Nikkei futures gapped blow-off of two successive days on 1 and 2 April suggest a saturation area, although a gapped higher day ending on or near the low like 11 October 2007 for the Wilshire would be a more classic representative day of the final saturation area.
The financial industry owes Reuters, Associated Press, et. al. and spews out positive economic news near the top of the equity-commodity euphoric saturated areas to lure yet more savers into the distribution saturation areas. Amoral crooks are running this game.
The Federal Reserve sprang from and is Wall Street. Can the Federal Reserve and other Central Bankers buy their own debt and, via an electronic shell game, each other debts at whatever interest rate desired - cheapening all labor derived savings?
Ultimately, after this coming devolution, the financial industry will cause its own undoing. It will speculative with free money and its laborless prior gains to drive oil prices to record levels despite decreased actual demand in a contracting global real economy.
The middle class and those newly endebted bright graduating students do not have a chance in the world that the Central Bank-Wall Street crowd have and are creating. It is sad that this great country has been brought to its knees by this central bank-wall street-politician collaborative. Too bad the twin RP's, Ross Perot and Ron Paul, didn't team up in the late eighties.
Nassim Taleb on What Should Really Worry Us About the 'Flash Crash' [View article]
The procession of gold valuation fractals(denominated in, as an example, US dollars) exactly represents the old yellow relic's worth relative to currencies and commodities. The evolution of gold's valuation fractals likely provides the best linkage and opportunity for understanding the macroeconomy's deterministic ongoing money supply, asset supply, hard asset (over)valuations, total debt, and ongoing wages - relative to the values of the world's individual currencies, equity composites, commodity composites, and debt instruments.
Gold, from 1714 to 1918, denominated in the dominant British pound and from 1787 to 1918 denominated in the US dollar had a relatively constant value of 18-19 US dollars. With the formation of the US central bank and rapid money expansion via fractional reserve lending, gold's first fractal lasted about 15 years from 1917-18 to 1931-1932 with gold averaging 20-21 dollars.
Since 1932 gold has completed two large fractal series following the CRB's growth fractals of 8/20/10 years (38 years 2.5x second fractal) with an initiating fractal in the last 3 years 1968-1970 of the third 10 year period from 1960 to 1970 followed by a 7/17.5/9 year fractal ending in 2001. Notice the proportionality of these large yearly fractal series.
At the end of each period, the money supply enlarged through additional debt via fractional lending and reached an accumulation point allowing gold(and commodities) to proceed to the next quantum level of valuation. A 20.50 average dollar level existed from 1917-18 to 1931-32. With devolution of all assets in 1931-32, gold's low in 1931-32 dollars was below its 1790-1917 average valuation. A 35 dollar range existed from 1932 to 1970. A average 350 dollar range from 1970 to 2001.
Bad debt is currently being liquidated faster than the world's central banks can print money to maintain jobs and wages, the essential structural support element for continued debt repayment on overvalued assets. Hard asset prices are falling. It is the end of a large macroeconomic debt credit cycle which is characterized by debt dependent asset valuation fractal growth and decay progression. By use of gold's proportionality this great credit cycle will conclude in 12 or so years.
Gold represents the linkage to the debt-asset-jobs-wages real economy. Its quantum saturation growth and decay valuation fractal patterns are elegant in their time ordered quantum fractal patterns.
All of the Lammert growth and decay quantum fractal progressions of x/2.5x/2x/1.5-1,6x and y/2.5y/2.5y are easily observed in the monthly fractal sequences between 1992 to 2001, the last 9 years of the 7/17.5/9 year progression.
In 1993 after an initiating fractal of 3 months, a 7/17/14/10-11 month :: x/2.5x/2x/1.5-1.6x progression is observed. Within the terminal portion of its third fractal's 2x or 14 month saturation growth, an 8 month base decay fractal is observed with a 8/20/20 month decay fractal :: y/2.5y/2.5y progression taking gold to a US denominated dollar low in 1999.
At the terminal portion of the 7/17/14/10-11 month fractal a 3/7/7 decay fractal of 15 months forms the bases for a 15/38/38/15 month fractal: the last two fractals which form current 50 month 2001:2005 base.
Likewise within the terminal portion of last 9 year fractal (7-8/18/9 year from 1970-2001), a 21 month initiating fractal formed the base for the 2-2.5x or 50 month first base fractal from 2001 to 2005.
The probability that these ordered fractals are occurring by chance approaches zero.
The current base fractal for gold is 5 years: 2001-2005 with a probable yearly sequence of 5/11-13/6-6.5 and ending in 2021-2022.
Since the conclusion its 2005 first 50 month base fractal, gold is following an 18/44 of 45 month first and second smaller scale fractal series. The 44 month second fractal is composed of a 5/11 and 7/14 of 15 fractal series.
The 7/14 month fractal series is composed of 26/58 of 62-65 weeks.
The first fractal of 7 months or 26 weeks series is composed of an ideal Lammert fractal series of x/2.5x/2x/1.5-1.6x :: 4/10/8/7 weeks.
The second fractal series is composed of 13/31/15 weeks.
A sharp devaluation of gold is expected within the next 5-8 weeks which will correspond to the expected equity and commodity crash.
Will Gold's expected final 2001-2022 5/11-13/6 year fractal end with an underlying curvilinear slope line connecting all valuations from 1917-1918 to 2021-2023 as bad debt is liquidated and hard asset prices are adjusted to ongoing wages and job opportunities? This will conform to a caricaturized x/2.5x/2.x/1.5-6x :: 15/38/30/22 year starting in 1918 and match a 70/164 year :: x/2-2.5x US equity fractal.
The Worst Case Scenario (Someone Has to Say It) [View article]
Likely those with 'savings' are the wealthier who are getting wealthier....
This 200 billion increased savings is balanced by 10 trillion dollars of asset valuation losses over the last 5 years and 9 trillion dollars of financial aide to needy financial institutions.
At any rate there is a new macroeconomic hard science that has been defined from the debt dependent asset valuation curves.
The mathematical patterns defining the growth and decay of asset valuation curves are as real and quantitative as any of the laws of physics, chemistry, and genetics...
July 2005 Nonstochastic Saturation Macroeconomics - A New Science
Blog of gary.lammert -A recap of debt dependent quantitative saturation nonstochastic macroeconomics
The Economic Fractalist - An introduction Posted at 2005-07-01 13:54:52 by gary.lammert
Welcome to the small alcove for the advancement of cause and effect saturation macroeconomics. This site pursues the hypothesis that the nature of market valuations and economic cycles is both causal and quantitatively decipherable. Valuations conform to fractal cyclical patterns that can be recognized, interpreted in conjunction with data emanating from the macroeconomic system, and used with short term and long-term predicative power. Information from this site is not intended to be construed as investment advice or as an investment tool. This site has been constructed because of the expected inevitability of a major sudden phase transition to occur at the conclusion of a grand 140 plus-year second fractal cycle starting in 1858. For the masses this phase transition will occur both very unexpectedly and very suddenly. Approaching the global macro economy from such a causal and fractal Weltanschauung may help those considering further debt obligation and those in position of formulating future interest rate and monetary policy. The cyclical nature of the macroeconomic system operates by causality rather than chance. Valuations of assets are controlled chiefly by interest rates - the cost of money. Lowering nominal interest rates, below asset inflation controlling rates, leads to macro economical disequilibria with excessive money expansion through increased borrowing. This expansion engenders unbalanced forward consumption, consumer saturation, overproduction, and inflation of assets and consumer items. With the addition of ongoing wages of the consumer masses, these oppositional elements are countervailing, and periodic macroeconomic imbalances will self correct. Market overvaluation saturation and decay corrections to new lower saturation points occur in a fractal manner. Cyclical patterns can readily be identified on valuation charts denominated in minutely, hourly, daily, weekly, monthly, and yearly units. The transitional asymptote of overvaluation saturation curves are followed by decay curves which bring market valuations to lowered decay saturation levels where intelligent buyers reenter the market. Valuation fractal cycles of yearly and multi-yearly lengths are based on saturation at the consumer level. Human psychology is a decidedly lagging indicator and follows as an end effect of the mechanistic saturation and decay evolutions in the market. Market contrarians understand these turning points and anticipate the directional changes of the markets based both on market asymptotic overvaluation saturation areas or decay end-point saturation characteristics and counter intuitively by recognizing the lagging psychological parameters of extreme optimism or pessimism in reaction to the mechanistic respective high and low points. Both the degree of valuation and the cyclical time course of valuation evolutions appear to conform to range bound near quantum-like units and quantum related Fibonacci numbers. While the absolute degree of valuation is influenced by the absolute interest rate, the percentage or proportionality changes of valuations from highs to lows and lengths of time to decay and intra-cycle nodal points appear to conform to these range bound near quantum units. The ideal growth fractal time sequence is X, 2.5X, 2X followed by a decay sequence of 1.5-1.6X. 'X' represents the fractal unit of time denominated in minutes, hours, days, weeks, months, and years. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. The second cycle may be composed of two roughly equal time units or one confluent time unit. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x, which has import for the current 140 year grand fractal cycle, now in its 147th year. . The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point. The last 1.5-1.6X cycle is primarily a decay cycle interrupted with a mid area growth period. Near ideal fractal cycles can be seen in the trading valuations of many commodities and individual stocks. Most of the cycles are caricatures of the ideal and conform to Gompertz mathematical type saturation and decay curves. Feel free to visit The Economic Fractalist Website. G. Lammert
Rome is burning.
Apple: Why I Am Strongly Bearish - Take Two [View article]
Apple is following a monthly pattern very similar to physical gold and the XAU: a 7/18/13 month fractal series. Gold and the XAU are following a 7/16/14 month growth fractal.
Both Apple and Golds' valuations are supported by the underlying money supply, which is nonlinearly deteriorating secondary to collapsing defaulting debt.. Both Apple and Gold both pay no interest or dividends and are are at the pinnacle of Saturation Macroeconomic's third fractal growth.
For Apple a 20 June 2011 10/26/15 day final fractal series is easily observable. Because final third fractal growth is often a 1.6 ratio of the base fractal Apple's third 15 day fractal could be extended to 16 or 17 days for final 3/8/6-8 day fractal series.
Apple has increased in value more than 50 times from its 2002-2003 lows whereas physical gold has increased by less than 8 times from its 1999-2001 lows.
A four phase 10/26/16-21/15-16 day :: x/2.5x/2x/1.5x fractal series could take Apple 200 dollars or more below its current value with a nonlinear drop after day 16 of the third fractal and a reversal on day 20 or 21 of the third fractal ending on the high of that day and thereafter deteriorating in a 15-16 day fourth decay fractal.
Gold: The Luster Is Back [View article]