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Fuzzy cognitive maps (FCM) is a powerful paradigm for representing human knowledge and causal inference. This paper formally analyzes the causal inference mechanism of FCM. We focus on binary concept states. It is known that given initial conditions, FCM is able to reach only certain states in its state space. We prove that the problem of finding whether a state is reachable in the FCM is nondeterministic polynomial (NP) hard, that we can divide fuzzy cognitive maps containing circles into basic FCM modules. The inference patterns in these basic modules can be studied individually in a hierarchical fashion. This paper also presents a recursive formula for computing FCM's inference patterns in terms of key vertices. The theoretical results presented in this paper provide a feasible and effective framework for the analysis and design of fuzzy cognitive maps in real-world large-scale applications