–The euro comedy continues. But don’t laugh at their ignorance. Our Tea/Republicans and the Dems are of the same mind.

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. 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.
==========================================================================================================================================

This goes under the heading, “It would be funny if it weren’t so sad.”

Fin Min says Greek concession would strengthen Ireland’s hand
Ireland seeking ECB help in reducing sovereign debt burden

Feb 8 (Reuters) – Ireland would see any European Central Bank contribution to the restructuring of Greek debt as a precedent that would boost Dublin’s efforts to ease the burden of its own sovereign debt, the country’s finance minister said on Wednesday.

And why not? If the ECB is prepared to screw Greece’s creditors to get Greece off the hook, why not screw Ireland’s, too. And while they’re setting precedent, how about helping Spain, Italy and Portugal avoid their debt?

Ireland, widely seen as the poster child among bailed-out euro zone countries, has been lobbying the ECB to help it reduce the burden of its sovereign debt by cutting the cost to the government of bailing out its banks.

“If the ECB are prepared to make this kind of concession to Greece it would encourage me to think that they might be ready to make concessions on the promissory note to Ireland,” Finance Minister Michael Noonan told state broadcaster RTE.

“I see it, if it occurs, as a strengthening of our negotiating position.”

And fair is fair. If you’re going to reduce the debts of the most flagrant budget busters, how about doing something for countries that have had lower deficits, like France, Finland, the Netherlands, Austria, and please let’s not ignore the needs of Belgium, Estonia and Luxemborg.

And why not even Germany? Just because they arranged their finances, and made their citizens accept a lower standard of living, so the government could pay its debts, why should they have to continue? So long as “screw the private creditors” is now an accepted EU strategy, everyone should be able to slurp from that trough.

Officials from the ECB, European Commission and International Monetary Fund on Wednesday were attempting to broker a deal that would open the way for a 130 billion euro EU/IMF rescue for Greece and avoid a disorderly default.

While the ECB has ruled out joining private creditors in voluntarily accepting losses on its Greek bonds, it could provide indirect relief by renouncing profits from bonds it bought at below face value.

It works like this. The ECB, which being Monetarily Sovereign, so having the unlimited ability to create euros and pay any bills, will not accept losses on its Greek bonds. But private creditors, who do not have this unlimited ability, will take all the losses. If you understand that, kindly explain it to me.

The ECB’s 23-member Governing Council, which holds a regular monthly meeting on Thursday, has yet to adopt a position, but some policymakers are reluctant to share the burden, in part for fear of setting a precedent.

They don’t want to set a precedent??? See, I told you this would be funny.

A precedent already has existed for years. The precedent is this: Euro-using nations, being monetarily non-sovereign, have but two choices: Somehow create a positive balance of payments or drift into an austerity-induced recession. Monetarily non-sovereign governments succeed long term, only if they have money coming in from outside their borders. This applies to all euro nations, the American states, counties and cities.

Germany succeeds by sucking euros from its neighbors, but what are the neighbors to do? It’s highly unlikely that all euro nations can be net exporters. So where are the euros to come from if the EU won’t supply them?

Unfortunately, despite being able to create euros at will, the EU is afraid to run a deficit. They still live in a pre-1971 world – just as the U.S. government does. Debt-hawk ignorance is everywhere.

I award two clowns to the policymakers who fear setting a precedent more than they fear injuring the private sector. Advice to all prospective lenders: Make sure you get high interest rates for those high-risk bonds. Of course, lenders don’t need my advice. They definitely will demand more interest, which will make the next crisis come sooner, which will cause even higher interest rates, followed by an even sooner crisis. And the downward helix continues.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

==========================================================================================================================================
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

#MONETARY SOVEREIGNTY