Velocity of Money or Transaction Rate

In the priceless model, it is Transaction Rate, and price is derived from inventory ratios across goods across periods. It is the premise, the closest unit of Hamiltonian measurement, so to speak. Its self measurement is reasonably uncertain, within a band.

A good premise? Generally when the movement of goods requires expensive energy, at least. A finite dimensional distribution of Transaction Rates will follow a transaction rate minimizing kernel, or shape in some orthogonal measurement.

It is coherent with the agent, mostly. Probably not far off the market and it leads to a sort of spectral accounting system. That is the trader looks for pricing bands, then break outs. The trader assumes break outs are periods when the economies of scale are favoring a certain set of firms. This behavior is common across all transactions and as a biological root.

So, in minimizing transactions of a finite length queues of multiple supply chains is what we are left with. The queues contain pending transactions. The transaction rates between queues ae a finite set located across the yield curve, spaced to minimize measurement interference. Thus, what can change to increase efficiency of scale is the lot size per transactions.

High interest rates implies larger queue growth. When rates are high then certain yield points, the economy will dis-equilibriate and try to double up the equilibrium points to get more uncertainty distributed. This is inflation at that region of the curve, over determinism at the inventory level, too many middle men. The fear is that some inventory in the mid-chain will go negative, disrupting the whole supply chain.

The tendency in the bond market is to force the natural shape in the yield curve. When the curve is steep, as we are now, then bond traders tend to be short in the ten year bond and long in the two year. Zero Hedge has some pointers on this. Since the Fed is holding Zero bound, the entire yield curve must eventually flatten, yield curve trades force the proper shape. That kid of yield forcing is the devaluation of long term real assets that cannot meet economies of scale. However, most of the long term trades are government debt or government backed agencies, and that (ot the taxpayer) is being forced into bankruptcy.