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.
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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
or
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
http://www.rodgermitchell.com
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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
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Rodger,
This “solution” coupled with what is being referred to as the good news: “The economy grew 2.5%, as expected, in the third quarter, according to an initial reading on gross domestic product. That’s up from 1.3% in the second quarter”, has spurred a substantial boost to the Markets.
These results, said Capital Economics, “would seem to make a mockery of fears that emerged early in the quarter that the economy was entering a recession.” (Just wait and see)
And then this:
“Consumer spending was stronger, particularly at the end of the quarter. Business investment jumped by an annualized 16.3%, and exports grew”.
But:
“The bad news is that the growth rate is unlikely to be so robust going forward. Cuts in federal, state and local government spending will be a big drag on the economy”. (Really)
More bad news: “The Labor Department’s weekly jobless claims report showed initial jobless claims falling by 2,000 to 402,000 in the week ended Oct. 22. To produce real job growth requires claims to fall to 350,000 or less”.
And:
“The National Association of Realtors said pending-home sales fell 4.6% in September from the prior month, disappointing expectations for a flat reading”.
So, what the heck is really happening here? The Market tanked a couple of weeks ago due to fears of Greek default. Then it spurts to the stratosphere because of this “deal”. The banks in the U.S. and Europe are essentially insolvent. This deal is nothing more than kicking the can down the road. Again, in your opinion what is reality? Please.
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Charles, reality depends on what the government does. Tea/Republican reality is depression. Democrat reality is recession. The markets don’t know the future.
Rodger Malcolm Mitchell
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But what is causing this spike in the Market, in your opinion? Speculation, manipulation? It certainly cannot be any of this news. What did Government do to cause this big surge of investment?
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Charles, the stock market is a prediction machine, and has little to do with current reality. Apparently, lots of people predict that the euro nations will solve their problems, which these same people predict will help America solve its problems.
My opinion: Wrong on both counts. The euro leaders and the American leaders think austerity is better than economic growth. Until that changes, I see no hope for improvement. That’s my prediction.
Rodger Malcolm Mitchell
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Understood and thanks.
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