This free pattern originally published in:
Stoles & Shrugs 
Using 10—16 inch strands work same as double knot fringe.
Next Row: Take each group of fringe and knot about ½ inch from last row of knots.
Next Row: * Take half of one group of fringe and half of next group of fringe, knot together ½ inch from last row of knots, repeat from * across row. Trim fringe evenly.
other patterns in leaflet:
Knitting Patterns:
Hairpin Lace Patterns: