Wednesday, April 13, 2016

The central bankers are freaking

Zero Hedbe covers the current hysteria.

They have Japan and China doing this weird trilemma of death by  threatening FX trade manipulation.  Abenomics is not working, the national debt is not inflating away.  China stopped supporting its currency, it fell.  Chinese corporations cannot cover their interest payments.  The US has near zero growth and the American consumer is broke and we are in deflation.

The problem, it seems, is government monopoly control of the currency function.  Fiscal actions become unsustainable bailouts and debt is used to cover the losses.  The old fifty year debt cycle in the USA.  So Japan, no doubt has Obama's ear, China no doubt is currency warring with Japan and the USA, at the same time.  China is not intentionally malicious, but they have agreed with the global bank to trade their currency among a basket of traded currencies. But in that basket is this huge US economy, China wants the dollar to drop with the yuan, otherwise the currency spread, the distribution of currency trades, is too big for China's limited money markets.  Japan wants a strong dollar or it will die, it lives on exports to the USA.

How does banker bot do it?

We have the currency banker serving queue of deposits and a queue of loans.  The difference between the two queues generates a distribution of central banker float.   Any of the next trades cause the currency banker float to exceed two sigme from its last mean causes a rebalance.  The currency banker bot pays off this who guessed the actual mean, they got their futures right.

As a betting tree, the tree isn hte encoder for a finite windowed 'Huffman organizer''  That encoding tree is a deliberately limited sized version of the block chain ledger.  The adaptive Huffman encoder will see and innovative bet whohc causes then  adaption to exchange nodes on one of the branches because the bet was out  of variance, the currency bot rebalances that branch, back down, computed the 'compressed' quantities,ie the typical sequence recently observed.

The real issue is entry and exit of member banks. But even that might have a statistical definition, and the process can be made open via smart cards, everyone the opportunity to be a member bank.

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