Mitchell’s laws: The more budgets are cut and taxes increased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
The media would like you to believe the Fed is responsible for our economy. Total nonsense. But, the stock traders, who have no clue about economics, fall for it.
Stocks snap higher on hopes for new Fed action
Stocks up sharply on Wall Street on hopes that the Fed will take new action on the economy
By Pallavi Gogoi, AP Business Writer | Associated Press
NEW YORK (AP) — Stocks rose sharply on Wall Street Tuesday as traders turned their focus back to corporate news from the U.S. and hopes that the Federal Reserve will come up with a plan to jumpstart the economy.
Amazing that all hopes lie with the Fed, while it is Congress and the President who have the power to “jumpstart” the economy. Here are what Congress and the President should do, none of which involves the Fed: “Nine Steps to Prosperity”:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America
Stock traders are also latching on to recent signals from the Federal Reserve that the central bank may reveal plans to stimulate the economy at the end of its two-day meeting Wednesday.
“A good portion of today’s strong market action is from a hope factor that we’re going to get more easing from the Fed,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
“Recent signals” “May reveal plans” “More easing from the Fed”?? Those are the hopes? What exactly do you want the Fed to do? Cut interest rates below zero?
Economists say that even if the Fed does not act after its meeting, it will send a clear message that it is standing by to do so if needed.
Yes, that’s what we need: The Fed “standing by,” and sending “clear messages,” just as Congress is “standing by” and President Obama is “standing by.” Rather than standing by, and sending clear messages, how about implementing the Nine Steps.
Financial companies were among the best performing stocks as investors hoped for Fed action: Bank of America soared 4.5 percent, Citigroup gained 3.5 percent, JPMorgan Chase was up 2.2 percent and Morgan Stanley rose 3 percent.
Sure, the big banks have friends in the Fed and in the Treasury. Do well; make millions. Do poorly; the Treasury will bail you out — and you still make millions. Can you visualize any big banker being so stupid, he can’t make millions? By the way, what was Jamie Dimon’s bonus for losing $3 billion?
In Europe, Spain’s cost to raise money skyrocketed. The Spanish government had to pay an interest rate of 5.07 percent for 12-month bills, up sharply from 2.98 percent.
Still, investors were heartened to see that people were willing to lend Spain money. “Even though it cost Spain dearly and yields rose to a record, the fact is that it was not shut out of the markets,” said Cardillo.
Wonderful! Monetarily non-sovereign Spain, which is deeply in debt, now is able to go even deeper in debt, at “only” 5.07%. The U.S., which is Monetarily Sovereign and even deeper in debt, borrows at 1/10%. Why? Hmmm . . . Could it be because Spain is monetarily non-sovereign, so can’t pay its debts, while the U.S. is Monetarily Sovereign, so can pay any size debt?
Or could it be because a Monetarily Sovereign nation, having the unlimited ability to create its sovereign currency, doesn’t even need to borrow?
Those who do not understand the difference between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Bottom line, Congress and the President have been foisting the myth that somehow the Fed is responsible for economic growth. Total crap. Congress and the President are 100% responsible. The Fed is just a bank. Do you go home at night hoping your bank somehow will stimulate your company?
Whatever happens to this economy, it’s neither the fault nor the credit of the Fed. All of the fault and credit lies on the shoulders of Congress and the President. Period.
Unfortunately, Congress and the President evade and avoid their responsibility, with the Big Lie, that federal deficits should be reduced, while austerity will grow the economy. It’s a Big Lie promulgated by the upper 1% income group, in cahoots with the mainstream media, also run by the 1%. Austerity takes more from the 99% than from the 1%. Austerity grows the income gap.
The Democrats are horrible about spreading these myths, but the Republicans are even worse. They are completely in the pockets of the 1%. Anyone earning less than $300 thousand per year and voting Republican, is a fool.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports