One of the functions of sleep is to process the most emotionally intense experiences of the previous day, to separate the facts from our feelings so that we can reach a quasi-objective view of things. The other reason for doing so is so that the emotions themselves can be entered into and stored in memory. It is of value to be able to access a memory based not just on a particular time or a particular place (which we can all do), but also on a particular emotion. All the experiences you’ve had of being humiliated, for example, can be bound together through emotional memory, in order to help
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