The Cantillon Effect: Economics 101 with BXNKROLL

The foreign exchange market isn’t random.
It’s a complex adaptive system.
And systems theory helps us see the hidden patterns.

PART 1 – SYSTEM STRUCTURE

Currencies interact through feedback loops.
Interest rates, energy markets, geopolitics, capital flows—
These aren’t isolated; they’re dynamic subsystems.
Shift one node, the entire structure rebalances.

Example:
If U.S. yields spike, capital exits emerging markets.
Those currencies fall, creating pressure on local monetary policy.
That pressure loops back into the dollar, via trade and capital feedback.

PART 2 – ENERGY & CONFLICT AS SYSTEM INPUTS

War, oil shocks, sanctions—
They act as high-impact external shocks.
These shocks amplify volatility through energy-price-linked currencies:
CAD, NOK, RUB, and to some extent, USD.

Iran tension is a classic example.
It tightens oil supply chains → fuels inflation risk →
Central banks hold rates higher →
Risk-off flows favor USD, JPY, CHF.

PART 3 – SYSTEM BEHAVIOR: NONLINEARITY

The system isn’t linear.
It’s sensitive to thresholds—
A small policy move or unexpected event can trigger a cascade.
Think flash crashes, policy surprises, liquidity droughts.

Expect nonlinear FX behavior around elections,
oil disruptions, or synchronized central bank shifts.