Monday, February 7, 2011

We grow when we have a stable inventory plan.

Yield curve spreads over time
Notice each business cycle, we grow with the long end leading, and crash with the short end leading.  When interest rates rise on the long end then inventories are growing sufficiently to cover future shortages, the curve then rebuilds itself from long to short.   Our brains are Fibonacci computers,  we compute recursively, as if we are generating minimum redundancy distribution networks.

Consider buying bonds on the run:
Zero Hedge has often posted  on the topic.  The meaning is simply that the Fed buys bonds as Treasury issues them.  Investors know this will not last, they have no stable view of central government.  Hence, the network remains short and gets shorter.  There is a lower limit to the Fibonacci rank, one or two, Washington DC politics collapse, as is happening in California.

The agent has no choice, his brain is wired as a set of F counters.  If he cannot make a stable network starting with Washington DC, or Sacramento then he will start the network locally.

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