Zero Hedge and the Oil to Ten Year correlation

Zero Hedge commented on the correlation between the yield steepness and the price of oil. I have to re-read Zero Hedge twice, I am on my first run.

Anyway, this is how I think QM Theory should interpret the correlation. Oil becamse suddenly constrained, and in response, the oil delivery queue is trying to reduce rank, shorten the delivery steps and get oil out there with fewer transactions. The rest of the economy is being dragged into small rank because oil is more constrained than usual.

Rank reduction of the multi-stage delivery queues is deflation, the the money distribution queue follows suit, partly, it wants to deflate.

The Ten year problem arises because our transportation retooling cycle is ten years. So Ten year plans become very uncertain, hence the jump in the yield curve at Ten Years. We have volatility on the ten year transportation retooling plans.

We solve the problem by commercialize more traffic, remove the consumer from the necessity of owning transportation. This is not a suprise, because the sudden constraints on energy were caused by an important and wealthy consumer group trying to commercialize personal freight, mainly by Internet shopping and UPS/FedEx. That process pulled the transportation industry off equilibrium.