Wednesday, June 3, 2009

Oh that yield curve

A QM Economists sees a fintie dimensional division of the yield curve The yield curve is the queue sizes of a multi-stage, multiple good network. Money is the fastest adapter. Queue sizes of multiple goods about a particular term adjust price as queue size. Shortages cause inversion kinks and the queues adjust to remove spectral anomolies (Milt and his Plucking Theorem).

The money system only works in a minimum phase yield curve, hence coherence. The constant of uncertainty would have to be price*time for any transaction. Transactions are finite time and partial results become observable to the agent. Transactions have finite time, governed to the adaption time of money..

The yield curve is the inventory growth at each node. So, simple enough, a steep curve means inventory build up from long term investments. Inventory shortages at the short end because there is no efficient solution to inventory pricing, given the price of inputs.

Balanced expansion expands queues initially, then visibility increases across the yield, and a more acurrate measurement is possible with an increase in the number of terms.

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