Thursday, January 9, 2020

Addiction is only an approximate term

Market Bubbles: It's Not The Price, It's The Mentality


In the brain it is an addiction, but in the market it is the natural 'lossy compression' that happens when currency banking quantizes the deposit and loan 'chunks', puts them in a bundle. On the margin a few basis points might be lost, and their is no reverse market path.

Otherwise known as entropy maximizing, there is no entropy minimizing path except via government bailouts or defaults. Addiction works because the same process of quantization happens in our brain. But mathematically the term is lossy compression.

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