The Wordsmith's Forge

nah, it's literally cut strips of stretchy cotton-blend cloth like would be in a t-shirt, but verrrrrry long so it can be rolled into a yarn ball;

can be homemade by cutting old clothes, T-shirts can even be cut into one continuous long piece, or purchased as a convenient Thing;

used for projects where gaps and stretches and general largeness & looseness of the pattern are okay, rag rugs and chunky crocheting and so on

http://www.instructables.com/id/t-shirt-yarn/

you could ask an actual fiber artist for more detail, this is just what I have picked up being around them, and could be incorrect in some details