  In this paper we define and study the "ghost loop orbifold" of an orbifold
$X$ consisting of those loops that remain constant in the coarse moduli space
of $X$. We construct a configuration space model for the ghost loop orbifold
using an idea of G. Segal. From this we exhibit the relation between the
Hochschild and cyclic homologies of the inertia orbifold of $X$ (that generate
the so-called twisted sectors in string theory) and the ordinary and
equivariant homologies of the ghost loop orbifold. We also show how this
clarifies the relation between orbifold K-theory, Chen-Ruan orbifold
cohomology, Hochschild homology, and periodic cyclic homology.
