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.
I hope you enjoy comedy as much as I do. Here are a few excerpts from a truly hilarious article about Spain.
Spain Bank Rescue Glee Morphs Into Markets Rout
By Associated Press | June 11, 2012 |
MADRID (AP) — Euphoria over a lifeline of up to €100 billion ($125 billion) to rescue Spain‘s hurting banks morphed into a financial markets rout in a matter of hours Monday, as investors digested the still-undefined plan and became concerned the country may be unable to repay the new loans.
What!! You mean lending a lot more money to someone who has no source of income, and cannot possibly service its current debts, will not solve that person’s debt problem??! Who’da thunk it?
The rate on Spanish 10-year bonds — a measure of market trust in a country’s ability to repay debt — rose to an alarmingly high yield of 6.47 percent.
You think that’s “alarmingly high”? Would you really want to lend money to someone who has no hope of ever servicing their debt — and now is burdened with even more debt? I think 6.47% is way too low.
Overshadowing Spain’s acceptance over the weekend of a bailout for banks burdened by toxic property assets and loans are Greek elections next weekend and concerns that the anti-bailout left-wing party Syriza could become the largest party in parliament, putting the country’s membership in the zone at risk.
If Greece left the euro behind, within two years, they would be one of the wealthier nations in Europe. Why? They could pay their debts, with no difficulty, and a probably lower-value currency, would allow them to become big exporters. Monetary Sovereignty would mean more money; more businesses and more jobs.
Investors also zeroed in on Italy, sending its bond yields sharply higher amid worries it could be next in line for a bailout.
Or, better yet, Italy should get in line to leave the euro. Face it, the euro is the worst idea since raising duties during the Great Depression.
“Plenty of risk still remains in place, with question marks over the ability of Spain to repay the debt, especially, if the country fails to get back on the growth path, the outcome of the upcoming Greek elections and the perception of situation in Italy,” Anita Paluch of Gekko Global Markets wrote in a note to clients.
Anita, they can’t pay their debts. Their people are broke. They have no jobs. The nation is broke too, also with no source of income. The country just took on huge added debt. And you wonder whether the country will “fail to get back on the growth path”?? What world do you live in?
Spain’s bond yield is worrisome because it is perilously close the 7 percent rate that is considered unsustainable, and the level that pushed Greece, Ireland and Portugal to ask for bailouts of their government finances.
Forget the 7% rate. A 1% rate would be unsustainable for a nation that has no net income and no source of money. How do you people come up with these magic numbers? From a “Magic 8 Ball”?
“When people lend money, they never do it for free. They want to know what is done with the money,” said Joaquin Almunia, the European Competition Commissioner.
“I am not talking about just the obligation to pay back the money, but also some other kind of terms,” he told Cadena Ser radio, adding that these remain to be determined.
Translation: Not only are we lending you money you cannot repay, but we are assigning conditions to the loan — conditions you cannot meet. (Could it get any funnier? Hello Jay Leno, are you listening?)
The loan will be supervised by the European Commission, the European Central Bank and the IMF, Almunia said. This troika will have people on the ground overseeing the restructuring of the Spanish financial sector. Representatives of the same three groups regularly visit Greece, Ireland and Portugal to make sure the governments in those nations are complying with bailout terms.
Oh, thank goodness. I was worried you might send idiots. But, I feel reassured, now that Greece, Ireland and Portugal have recovered due to your excellent supervision.
Altafaj noted that the European Commission last month recommended Spain undertake further reforms such as speeding up the phasing of a higher retirement age — it is to go from 65 to 67 — and raise VAT sales tax.
Great idea. The people are broke and jobless, so your solution is to reduce their pensions and increase their taxes.
Harold Heckle and Alan Clendenning in Madrid contributed to this report.
Thanks guys, for providing a few laughs in this otherwise gloomy day. Here’s your reward:
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
3 thoughts on “–Read today’s truly hilarious news article about Spain”
 Roger writes, “If Greece left the euro behind, within two years, they would be one of the wealthier nations in Europe.”
Yes, I have been saying this since 2008. Banksters claim that if Greece dumped the euro, and escaped banker tyranny, then the sky would fall, and the earth would be destroyed. This lie is endlessly repeated in the media, which is owned by the bankers and moneyed interests. Most people believe the lie so fervently that they condemn anyone who debunks it. And they wonder why the Depression becomes worse every day.
 Roger writes, “Face it, the euro is the worst idea since raising duties during the Great Depression.”
It’s a bad idea for the masses, and for the real economy. It’s a wonderful idea for the financial economy. It has made elitists and moneyed powers richer and more powerful than ever. This was the whole point of the euro currency. Media blather about facilitating trade is lies.
 “When people lend money, they never do it for free. They want to know what is done with the money,” said Joaquin Almunia, the European Competition Commissioner.
Wrong. Mortgage originators lent money during the housing bubble, and did not care what happened to the loans, since the loans were immediately sold to the secondary market and bundled into securities for sale worldwide. Today, student loan originators don’t care what happens to the money, since, after all, the loans are backed by the US government. The banksters can’t lose.
Also, if you say “people don’t lend money for free,” then who must pay the price? In Europe’s case, the masses must pay. The ECB creates money out of thin air and gives some of it to politicians, and the bulk of it to private bankers. The debt is dumped on the masses in the form of austerity. The bankers and speculators have fun in their casinos, but their casinos produce an infinite amount of toxic waste, called Debt, which is dumped onto the masses.
Meanwhile the media repeatedly chants, “We must have ever more austerity, and an ever-worsening depression, or else we will never get out of this ever-worsening depression.”
And the masses believe it. They self-righteously blame ordinary Greeks. They chatter about meaningless garbage. They ignore elephants-in-the-room, such as Monetary Sovereignty.
 I spit on this Joaquin Almunia and all like him who speak as though criminal banksters are morally superior to their victims. True, the peasants deserve to be enslaved, since so many of them are stupid and selfish, but that does not mean their slave masters have moral superiority. A parasite does not have moral superiority over its host.
Rodger, Off topic. In case you haven’t seen it, you’ll be interested in this article by George Soros:
Not off-topic at all. It’s a terrific article, right on target.
Only one thing makes me sad. If a high profile guy like George Soros understands the problem, but can’t make any headway with the powers-that-be, the situation is hopeless.
Rodger Malcolm Mitchell