Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

This is what passes for a “solution” in the wonderful world of pre-1971 economics:

Washington Post, European leaders agree to plan designed to stem debt crisis

European leaders moved early Thursday to stem the debt crisis gripping the continent by agreeing to a plan that imposes steep losses on investors holding troubled Greek bonds and boosts the firepower of the region’s bailout fund to as much as a trillion dollars.

After marathon negotiations that continued well past midnight, European leaders said that banks and other major investors in Greek bonds agreed to taking losses of up to 50 percent.

As I’ve been saying for the past six years, there are but two, long-term solutions for the euro nations:

1. Re-adopt your sovereign currency
2. Create a pseudo United States of Europe, in which the EU supplies member nations with euros, as needed.

That’s it. Anything else is mere patchwork that continually will reduce the euro nations’ standard of living — perhaps great news for austerity lovers.

I award three dunce caps to the euro nations.

(I now am running a 58 dunce cap deficit. Waiting for protests by dunce-hawks.)

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings