In June, we published, What will Brexit mean?
Later in June, we published, Brexit: How Obama “bailed then failed”
Then, this month, we published, How not to run a Brexit
The theme running through all three articles can be summarized as:
- The EU is a device invented by rich bankers, to control entire nations.
- The euro nations were foolish to surrender the single most valuable asset any nation can have: Their Monetary Sovereignty (as well as their territorial sovereignty), to bankers.
- Brexit is a great idea — it will allow the UK to control its own borders and finances — and easily will be accomplished, unless the leaders of the UK have been bought by the European bankers.
- Those rich bankers will try every trick they know, to preserve the goose laying those golden eggs, i.e to punish the UK, and dissuade any other nations from following suit.
And now, here comes the EU sycophants and the anti-exit Public Relations:
THE BREXIT HANGOVER JUST GOT WORSE, by Henry Porter
Those who supported a departure from Europe are only now coming to terms with the crippling economic realities—including the fact that many didn’t quite understand the rules and the whims of their neighbors.
Denmark’s former foreign minister Uffe Ellemann-Jensen,told Bloomberg, “Basically, the British need to take time to understand what an enormous task they took upon themselves. . . . Asking for a Brexit and expecting it to be clear-cut simply can’t happen.”
After all, the government minister in charge of Brexit only realized in the last few months that it would not be possible for the U.K. to forge individual trade deals with different E.U. member states.
British Conservative politicians hope that Britain can, like Norway, become a member of the European Free Trade Association, which allows a country to enjoy the benefits of the single market while not being a member of the European Union.
Not unreasonably, Norway is raising objections. “It’s not certain that it would be a good idea to let a big country into this organization,” said the country’s European-affairs minister, Elizabeth Vik Aspaker.“It would shift the balance, which is not necessarily in Norway’s interests.”
If Britain were to lose access to the single market, or British-based banks were stopped from trading freely in Europe through the “passporting” arrangements with the E.U., it would take very little to end the City of London’s reign as the de facto financial capital of Europe.
In fact, Britain could pretty soon be broke on account the enormous tax revenue the City produces.
Once new tariffs are brought in, as they surely will be to protect what little remains of British manufacturing industry, it will make things that much harder for British exporters of every kind to trade with our neighbors.
This is to say nothing of the effect on the cost of living in the U.K., as the pound sinks, or on the country’s finances.
In summary, The UK will be broke, and Brexit will make trade more difficult and cause inflation in the UK., all of which might be true for a monetarily NON-sovereign nation, but not for a Monetarily Sovereign nation that has 100% control over its money supply and its money value.
First, the UK cannot “be broke.” It never can be unable to pay any bill denominated in pounds or in any other currency exchangeable for pounds. NEVER.
A large, Monetarily Sovereign government simply cannot run short of its own sovereign currency, and the author of the article should know it.
Now, let’s talk trade:
In fundamental effect, exports of goods and services really are imports of money. Because the UK is Monetarily Sovereign, it does not need to import pounds. It creates pounds at will, by paying bills. It never can run short of pounds.
If any of the UK manufacturing industries were to begin to suffer from lack of sales or exports (i.e. imports of pounds), the UK government simply could support these industries in any number of ways (Reduced taxes; purchases of product; fund payrolls, etc)
In fundamental effect, imports really are exports of money together with acquisition of goods and services.
Because the UK has unlimited supplies of UK pounds, it can pay any amount to EU nations for their goods and services. Try to imagine EU nations refusing to accept British pounds, in exchange for goods and services.
Will the impoverished French refuse pounds in exchange for wine; will the impoverished Italians refuse pounds in exchange for pasta; will the impoverished Spanish refuse pounds in exchange for olive oil? (All impoverished by the euro.)
Oh, you think so? Then you don’t understand commerce.
But let’s say a miracle happens, and those struggling euro nations along with the bankers, and starve themselves of British money, just to make a point.
Will they also refuse U.S. dollars, which the UK easily can obtain in exchange for pounds? Will they refuse to sell to a U.S importer, who pays in dollars and immediately exports to the UK?
Not a chance.
The UK can import all the goods and services it wants, and doesn’t need to import money.
But what about inflation — the so-called “rising cost of living as the pound sinks.”
Being Monetarily Sovereign, the UK has total control over the value of the pound by its control over interest rates. The formula is: Value = Demand/Supply
If the Demand for pounds rises faster than the supply, inflation is defeated. How is Demand increased? The formula is: Demand = Reward/Risk.
The Reward for owning any form of money is Interest. All the UK would need do is increase the rate of interest it is willing to pay on government bonds, and there would be a mad dash for the pounds necessary to buy those bonds.
The pounds would become more valuable and inflation would be defeated.
The U.S. Fed does this all the time, to control inflation.
Bottom line: There is absolutely nothing the EU can do to punish the UK, if the leaders of the UK don’t want to be punished (big “IF.”)
Britain is too big, too strong and too Monetarily Sovereign to be punished by the EU’s bankers.
The ONLY way Brexit can run into problems is if the UK’s leaders have been bribed by the EU’s bankers.
No need for the UK to struggle through trade negotiations. The euro nations need the British pounds that the UK creates by the touch of a computer key.
And the UK easily can obtain euro nations’ goods and services directly or indirectly, also by creating pounds.
And finally, the UK has total control over domestic inflation.
Watch, as the rich EU banksters and their bribed UK politicians make Brexit seem “oh-so-difficult,” which will require punishing the British people (via totally unnecessary increased taxes and shortages of goods and services).
The game has begun. If the referees are bribed, the British people have lost.
You’ll know who has been bribed simply by the statements they make
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.