Thursday, June 30, 2011

The Bernoulli Channels and Four Laws

Basic theory.  

Bernoulli was a famous mathematician who used mathematics to describe natural processes that were important to how things really worked.  


I have surmised that most things have natural recurring patterns.   These things, let's call them "systems"  have certain energy levels and ways of moving that restrict their degree of movement, although these restrictions are often enacted as a viscous zone (not usually a solid boundary), and sometimes as a slowing similar to a boundary layer effect.    At some point the outer boundary may see an increase of pressure that results in slow or no movement, as in a velocity that is restricted becomes a pressure or even heat, sometimes this is seen a bouncing of energy against a barrier.   If the final barrier is breached, one may see a large movement of the system as in a pipe getting more pressurized until it finalizes ejects the fluid. 




These processes summarize the motion of markets to a large degree, although the pipe and water example analogy only goes so far, since in the Market, the water can also jump back into the pipe, and of particular importance to the technical study of markets, to return to bounce off the pipe and then continue away with increased energy.



Bernoulli Channels describe the various boundaries in mathematical relation to the "Interior Channel", the selection of the Interior Channel is an visual pattern recognition skill, and is crucial to the success

These Channel extensions are shown to exist in the nature of markets as simple fractions:


(4/3)
(4/3) to the Power of (4/3)
(4/3) times (4/3)


Similar to the laws of thermodynamics I have postulated 4 laws of the Great Ponzi. 

Law 1: Motion of the Ponzi may continue to irrational levels, even to the point that it appears to be perpetual, by cannot and will not continue forever.

Law 2: Ponzi Entropy--eventually the ponzi will lose, hands down, shenanighans can make a non-isolated system appear to increase in value, But never shall the isolated Ponzi increase in true value, not for a moment, don't even try.

Law 3:  No matter how much "News" that the system operators extract from the system, you can never stop the Decay of the Ponzi

Law ZERO: Sum value of currencies relative to each other are forever in equilibrium, it is a net zero sum game.   However the value of currencies in relation  to things that really matter can be shown, to over-time converge on a value of ZERO, as they have with 100% consistency throughout history.

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