Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
==========================================================================================================================================

Today, our politicians are struggling to find a way to reduce the federal deficit. They want to increase taxes (without increasing taxes) and reduce federal spending (without reducing spending). Reducing the deficit is known as “austerity” and austerity has had consistent results, down through the years. It causes new recessions and deepens existing recessions.

Here is a graph of federal deficits from 1901 through 2012. If you squint and count carefully, you’ll see we have had 22 recessions, an average on one recession every five years. (When the blue deficit line rises, deficits are being cut. When the blue deficit line goes above 0, we are in a surplus.)

1901 through 2012

22 recessions: On average, one recession every 5 years.

Although our economy is complex, and each recession has unique causes, Monetary Sovereignty posits that deficit reductions and federal surpluses have negative effects on the economy, by reducing money growth. Further, the politicians and media, being in the employ of the top 1% income group, tell you deficits should be reduced.

You might find it interesting to see facts, rather than to rely on intuition and the BIG LIE. You might like to see past deficits and surpluses graphed against recessions.

I’ve broken the years into segments, so you can see the individual recessions and what precedes them.

1901 through 1915

4 recessions; preceded by 2 surpluses; 1 reduced deficit

1915 through 1922

2 recessions; 0 surplus; 1 reduced deficit

1922 through 1933

3 recessions: 3 surpluses

1933 through 1949

3 recessions; 1 surplus; 1 reduced deficit

1949 through 1970

4 recessions; 2 surpluses; 1 reduced deficit

1970 through 1983

3 recessions; 2 reduced deficits

1983 through 1992

1 recessions; 1 reduced deficit

1992 through 2012

2 recessions; 1 surplus; 1 reduced deficit

Of the 22 recessions, 9 were introduced by federal surpluses and 8 others were introduced by deficit cuts. Only 5 came when deficits were increasing.

This post began, “Today, our politicians are struggling to find a way to reduce the federal deficit, also known as “austerity.” The growth rate of the U.S. economy this year has averaged a bit over 2%.

The euro nations’ politicians keep applying austerity. The result: Their economic growth rate this year is less than zero: a -.1% (minus growth rate).

Our politicians are working very hard to turn the U.S. into the eurozone and to lead us into another, probably worse, recession. President Obama’s “grand bargain” will accomplish that.

And he knows exactly what he is doing.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
==========================================================================================================================================

What do you call it when masses of fools buy a useless product, hoping that later they will sell this useless product to even bigger fools? Tulip bulb mania?

Before It’s News
Why Brazil Will Keep Buying Gold – and Driving Up the Price

As a group, central banks will have bought about 500 tons of gold this year, the most in more than 40 years. More large purchases are expected in 2013.

Foremost amongst the gold buyers are the central banks of emerging economies around the globe. Recent years have seen purchases by Russia, South Korea, Mexico, India and, as most believe, China.

Another country joining the party, or in this case the carnival, is Brazil. So why is Brazil jumping aboard the bandwagon now and buying gold at a record pace?

Since 2008, Brazil has attempted to fight the appreciation in the real by buying U.S. dollars. In the course of doing so, it has accumulated about $132 billion, the world’s sixth-largest reserves.

Roughly 80% of the reserves are denominated in U.S. dollars. And, as of the end of 2011, only 0.8% of its reserves were not in the form of government bonds or other bonds and bank deposits.

An economist at the Sao Paulo consultancy Tendencias, Silvio Campos Neto, told the Financial Times, “The dollar has its problems because of monetary easing policies and fiscal uncertainties that will also exert a certain pressure on the currency, so it’s natural the country [Brazil] is on the lookout for other types of assets.”

Gold essentially is useless. A tiny bit is used in dentistry and for jewelry and electronics, but the vast majority just sits in vaults around the world, costing money to store, insure, protect and ship from place to place, and it pays no interest. Meanwhile the supply goes up: About 2,500 tons are mined each year.

It is the classic white elephant, the value of which is based on the “bigger fool” philosophy mentioned above.

Brazil et al, are Monetarily Sovereign, meaning:

1. They can create infinite quantities of their own sovereign currencies. They never can run short.
2. Thus, they do not need to export goods and services, since exporting merely is device for importing their own sovereign currency.
3. They have the power to set their exchange rates at any level, by controlling supply and demand (through currency exchanges or by increasing or decreasing interest rates).

As for gold:
4. Gold, having virtually no utility, its value is backed by nothing. Compare this with the value of the U.S. dollar, which is backed by the full faith and credit of the U.S. government.

As for Brazil:
5. If the U.S. dollar fell to $0, Brazil would not lose a penny. It merely would create the necessary reals to buy whatever it needs. Having dollars in reserve does nothing for Brazil, except perhaps as a trading convenience. Same for gold reserves.

None of this is to say that gold has not appreciated in price compared with the dollar. Gold bugs (especially those selling gold) like to talk about recent price rises, conveniently forgetting the most recent gold bubble. It occurred in 1980, when the price doubled to about $600 oz, then fell to about $300, and drifted even lower for the next twenty years.

Bubbles do that. U.S. real estate appreciated in price for more than 60 years, before the bubble burst. But unlike gold and tulip bulbs, real estate has utility. So over time, as the population increases and people acquire more dollars, demand will increase and the price of real estate will rise, unless the government causes another really big recession.

Bottom line: The leaders of Monetarily Sovereign nations buy and sell gold, under the fiction they are being fiscally prudent, when in fact they are engaging in a useless activity. Perhaps it has some psychological benefit, as in “I just can’t sit here and do nothing. People will think I’m useless. So I’ll do something that looks good, and people will think I’m wise and necessary.”

Anyway, for Brazil, this silly hobby not only is without benefit, but it also is without risk. If gold were to crash yet again, Brazil could continue whatever importing and exporting it wishes, with its only danger being leaders ignorant of Monetary Sovereignty.

While the supply of gold keeps growing, growing, growing, maybe you should buy land, especially since you are monetarily non-sovereign. As Mark Twain said, “They’re not making it any more.” And with global warming, and oceans rising, land is becoming more scarce.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
==========================================================================================================================================

In discussing the “fiscal cliff, the Committee for a Responsible Federal Budget said:

Some commentators have advocated for a position of going over the fiscal cliff to leverage a better compromise. Paul Krugman called for the recently reelected President Obama to “not make a deal.” Matt Yglesias and others have also played down the harm from the cliff, arguing that it mostly affects the rich, sparing the poor.

But this is far from the truth. The poor would see a large tax increase, another recession and rising unemployment made worse by the expiration of extended unemployment benefits as a part of the cliff, and cuts to many income security and education programs as a part of sequestration.

The “fiscal cliff” is nothing more than the projected negative result from a group of deficit cuts. But, here is the Committee for a Responsible Federal Budget, as wild-ass, deficit-cut, debt-hawk organization as you ever will find, eloquently expressing why deficit cuts are a bad idea.

Yes, the poor would see a large tax increase.

Yes, we would have another recession.

Yes, unemployment would be made worse.

Yes, there would be cuts to income security (Social Security et al) and education programs.

The CRFB position seems to be: “Let’s not do it — but let’s do it. Only slower. Let’s make it a fiscal death spiral – a slow death spiral – rather than a cliff. Rather than taking money out of the economy in big chunks, lets take it out in lots and lots of small chunks.

“Rather than killing the economy with one stab in the heart, let’s make the economy die the death of a thousand cuts.”

This is what the populace has been brainwashed into believing. So, this is what the populace wants. And, this is what the populace will get.

Let the whining begin.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
==========================================================================================================================================

Here is all you suckers need to know about Barack Obama — that great protector of the middle and lower income groups. Read this excerpt from Policymic.com

Treasury secretary Timothy Geithner is reported to have offered a set of proposals that include increasing tax rates on the wealthy, a one-year postponement of scheduled cuts in defence and domestic spending, and $400bn in savings from Medicare and other entitlement programmes.

First, get angry at Obama for doing what he long has told you he would do: Cut benefits to the middle and lower classes, and camouflage this with a puny tax rate increase on the wealthy (which they won’t even notice, scarcely will pay, and in any event, will do you no good whatsoever).

But after you’re finished blaming Obama, blame yourselves for believing the BIG LIE that makes these cuts possible — the BIG LIE that federal deficits must be reduced.

You didn’t even try to understand Monetary Sovereignty, a simple statement of the fact that the federal government never can run short of dollars.

You didn’t even try to understand why, far from being too high, federal deficits have been way too low. You didn’t even try to understand why federal finances are different from personal finances and local government finances. You didn’t even try to understand why taking money out of the economy, via tax increases or spending cuts, causes recessions — always, always, always.

You didn’t contact your Senator and Representatives, demanding that they tell the truth about federal finances, rather than lying about deficits and debt. You didn’t write a letter every day, to Obama, demanding that he too tell the truth. You didn’t contact all those media types who speak and write the BIG LIE.

In short, you didn’t even try to save yourself. Instead, you allowed yourself to be brainwashed. Instead, you chose to mock those who tried to help you understand.

Rather than learning, you smugly made ignorant comments about how we would become the Weimar Republic or Zimbabwe if deficits grew. You rejected all the facts, and calmly allowed the BIG LIE to penetrate your skull.

And now, your chickens, as they say, are coming home to roost. Your chickens, your children’s chickens. Your grandchildren’s chickens.

Your Medicare will be cut. Your Social Security will be cut. Aid to the poor will be cut. Medical research & development: Cut. Infrastructure maintenance. Cut. Food and drug oversight: Cut. Financial regulation: Cut.

Those thousands of federal services that not only benefit the lower 99% income group, but help reduce unemployment and grow the economy; Cut, because you fell for the nonsense about the government being “too big” and the deficit being “unsustainable” and how people should be “self-sufficient,” and deficits cause hyperinflation, and those who accept government help turn into “sloths.”

Facts? Who needs facts? Not you. You have your intuition, and that’s all you suckers need. That, and the debt-hawks whispering in your ears.

The only thing that won’t be cut: Your taxes. FICA, the worst tax in America, the tax directed at you middle-class salaried people — that will go up.

Austerity. Just like Greece. It’s happening to you now, suckers, right under your nose. The upper 1% once again has won. They are taking your money, taking away your life — with your approval. No, with your insistence.

When the reality of your unnecessarily declining world begins to sink in, and you find yourself whining about expensive health care, inadequate Social Security, unaffordable college, unemployment and ever more frequent and severe recessions, you can remember all your dumb-ass, smart-ass, sarcastic, debt-hawk comments.

Suckers.

Now if this gets you mad, good. Use that emotion to contact every politician and every newspaper, and tell them to learn the facts about Monetary Sovereignty. Tell them the deficit is too low, and FICA should be eliminated, and federal spending should be increased. Tell them if they vote for austerity, they’ll lose your vote.

Use your self-proclaimed self sufficiency to save yourself.

Or just lie back and let them screw you, again. Suckers.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY