We introduce the State Stream Transformer (SST), a novel LLM architecture that reveals emergent reasoning behaviours and capabilities latent in pretrained weights through addressing a fundamental limitation in traditional transformer models: the lack of latent computational continuity across autoregressive generations in the state space. SST introduces a sliding window latent state (FFN) cache with weighted decay that maintains and evolves persistent latent processes throughout autoregressive generations. Through controlled experiments comparing base and SST architectures using the same frozen weights, we demonstrate that this architectural modification alone enables enhanced reasoning capabilities which appear best explained by some form of potential higher-order processing, as evidenced by emergent metacognitive behaviours. These behaviours persist under controlled conditions designed to eliminate confounding factors such as stochastic variation or learned response patterns. Analysis of latent state distributions and processing dynamics provides evidence that it is solely the 'state stream' that is responsible for these phenomena. In quantitative evaluations, the SST achieves substantial performance improvements over the base model on two reasoning benchmarks, reaching 89.01\% accuracy on GSM-8K (0-shot) and 91.04\% on ARC Challenge (0-shot CoT). These findings indicate that persistent computation in the latent state space enables fundamentally different information processing and internal reasoning strategies, with implications for our understanding of artificial intelligence systems.