Financial Bubble and Stagnation – NF Formula for Japan November 2015

The Federal Trade Commission warns, “It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.”

Can a multi-trillion plan in which shareholders are customers become a financial bubble?

Can a formula be established to measure a level of a pyramid scheme?

Do such schemes cause stagnation?

Blacky Pool Lake
Yes, using the Naturalistic Fantasy (NF) formulas, check out a case from Japan:

Japan’s stagnation; over the period of 1995 to 2007, GDP fell, real wages fell, while the country experienced a stagnant price level. The Bank of Japan has set a 2% target for consumer-price inflation. The NF Japan’s rate change formula is based on the September 30, 2015 data:

0% inflation + 3.4% unemployment – 2% target inflation + 0% to 0.10% rates + 1.9% bubble = 3.3% to 3.4% unemployment in 2016

The corresponding NF formula for US is:

0% inflation + 5.1% unemployment – 2% target inflation + 0% to 0.25% rates + 1.75% bubble = 4.85% to 5.1% unemployment in 2016

Bank of Japan can make the biggest holders of electronically managed assets to either lower the service fees or increase a stabilization requirement. Based on the assets, the Fed lifted the capital surcharge for US banks in summer 2015: 4.5% JPM, 3.5% C and BAC, 3% WFC, etc. Is anything else that can fix a bubble other then burst?

Shallow Inlet Mountains

ACKNOWLEDGMENTS:
Thank you to the publishing body of “Blazing Night” for the permissions to use the copyrighted materials. Thank you to Wikipedia as of November 7, 2015.

Blazing Night J. M. K. Walkow, ISBN 978-0-9866564-1-5, 2012
The Rate Change Question and NF Formula, 2015

Pyramid scheme
Lost Decade (Japan)
Bank of Japan
Basel III

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