Money as a closed system
Money is a closed system. here is how it all ties in together.
project finance — infrastructure — developing world catching up with the developed world — communications, energy, water, roads, bridges, tunnels, highways, housing, data centers, etc.
this creates a demand for USD, which has been the reserve currency of the world, since WWII
if a country or regional bloc, can come up with deep and wide markets for the 3 flavors of capital, debt, equity and cash — then the USD hegemony will be threatened — until then, there will continue to be a scarcity of USD, and overabundance of demand.
USD is the lifeblood that brings oxygen to the long-term growth of the global economy
humans as a species all balance each other out.
scarcity of resources. we have basic needs. food, water, shelter, clothing.
our DNA going back to the beginning of life, drives us towards these basic needs — to fight it is to fight a billion years of evolution.
we are like ants when you look at us from outer space. are we actually any different than ants or earthworms, when viewed from that perspective? honeybees?
do we all balance each other out as 7 billion people milling about, pursuing our basic needs driven by our DNA’s encoding for survival and perpetuating our species?
if so, then money is a closed system.
companies, government and people get 3 flavors of money: debt, equity and cash
that’s basically it.
it all revolves in an orbit within the system
markov chain monte carlo
metropolis-hastings
financial engineering
companies issue debt to buy their shares back and the P/E goes down and the stock price goes up and the credit rating goes up and they invest in +NPV projects and the cycle continues upon itself.
supply/demand and pricing brings supply chains into balance.
supply/demand goes back to the origin of life in single and multi-celled organisms billions of years ago
entropy goes back to the big bang and the formation of the universe 13.5 billion years ago
our neocortex separates us from all other living things — use it — to beat back billions of years of evolution
fear and greed is tied into the DNA code of perpetuating the species and survival of the fittest
it is in its purest form in the markets in the form of volality and priced as extrinsic value in options and other derivatives
to capitalize on all the other aforementioned concepts, you can sell extrinsic, levered while hedged by owning the underlying
this is the basis of the insurance industry, which goes back over 700 years to Genoa, Italy in 1347
all weekly candles live between the Gaussian/WMA9/EMA9/SMA9 and the 21 ATR
this is like the tides of the ocean — supply and demand
all big funds that are selling look for demand — at that moment- and they look for supply when they want to buy — at that moment
v bottoms, necklines and measured moves are a result of this phenomena
