Trading nothing for nothing. Revealed: The not-so-secret about money and value.

You may know this, although the vast majority of Americans — including the media writers, politicians and economists — don’t: Money does not exist in any material form.

Money is nothing more than an electronic notation in an electronic balance sheet. You cannot see, touch, taste, smell, or hear money.

That dollar bill in your wallet is a title to a dollar, telling the world that you own a dollar. Just as a car title is not a car, and a house title is not a house, a dollar bill is not a dollar.

The fact that a dollar has no physical existence is what makes Monetary Sovereignty possible.

Because the U.S. dollar has no physical existence, the U.S. government has the unlimited ability to create infinite dollars at the touch of a computer key.

Within the past twelve months, the government has demonstrated this infinite ability by creating, from thin air, something like SIX TRILLION stimulus dollars, without collecting a single extra dollar in taxes.

The fact that dollars are mere balance sheet numbers makes the following article seem somewhat less shocking than it otherwise would.

Why Would Anyone Buy Crypto Art – Let Alone Spend Millions on What’s Essentially a Link to a JPEG File?
Posted on March 16, 2021 by Yves Smith
By Aaron Hertzmann, Affiliate Faculty of Computer Science, University of Washington. Originally published at The Conversation

On March 11, Beeple, a computer science graduate whose real name is Mike Winkelmann, auctioned a piece of crypto art at Christie’s for US$69 million.

The winning bidder is now named in a digital record that confers ownership. This record, called a nonfungible token, or NFT, is stored in a shared global database.

This database is decentralized using blockchain, so that no single individual or company controls the database.

But “ownership” of crypto art confers no actual rights, other than being able to say that you own the work. You don’t own the copyright, you don’t get a physical print, and anyone can look at the image on the web.

There is merely a record in a public database saying that you own the work – really, it says you own the work at a specific URL.

So why would anyone buy crypto art – let alone spend millions on what’s essentially a link to a JPEG file?

It’s a difficult question, only for those who believe money is a physical thing.

But because money has no physical existence, might just as well ask, “Why would anyone give someone a beautiful, physical automobile, containing 10,000 physical parts, in exchange for numbers in a balance sheet?

Before we try to answer both questions, let’s look a bit further at the article:

Some people buy art for their homes, hoping to incorporate it into their living spaces for pleasure and inspiration.

But art also plays many important social roles. The art in your home communicates your interests and tastes. Artworks can spark conversation, whether they’re in museums or homes.

People form communities around their passion for the arts, whether it’s through museums and galleries, or magazines and websites. Buying work supports the artists and the arts.

Mona Lisa is moving - what does it take to keep her safe? - BBC News
“Seeing” the Mona Lisa

Let me tell you three short stories about money, value, and art.

Story #1. Have you been to the Louvre and seen the famous Mona Lisa?

It’s a surprisingly small portrait, and your view is limited by the fact that a rail protects it from a close approach.

Further, most of the time, it is surrounded by a dense crowd of viewers, each of whom is able to spend only a few seconds to look at what arguably is the most famous painting in the world.Mona Lisa - Wikipedia

In the unlikely event this painting ever were sold, the cost would be in the trillions of euros.

Yet, you could purchase a very good lithographed copy for a few dollars, and you could hang it in your home, and enjoy it for hours on end.

Center diamond: 3 carats. Each side diamond: 2 carats

So why would anyone spend millions, billions, or trillions of dollars to own something they could have for next to nothing?

Story #2. Years ago, I bought for my wife (now deceased) a ring, from a cousin (also now deceased) who was a wholesale diamond merchant. He sold to retailers, who sold to the public, so his own buying price was quite low.

The ring had a magnificent center diamond weighing 3 carats, with a diamond on both sides, each weighing 2 carats.

As I recall, the “family” price to me was about $7,000. I since have sold that ring for many times that amount.

But, I could have purchased an essentially identical piece of jewelry, made from cubic zirconia, for about $750, give or take.

Without a jeweler’s loop, no one (but my wife) would have been the wiser.

So why would a fool (me) spend so much on essentially nothing?

Perhaps the most visible form of art collecting today, and the one that drives so much public discussion about art, is the art purchased for millions of dollars – the pieces by Picasso and Damien Hirst traded by the ultrawealthy. 

Why were those pieces of are exchanged for so much money?

Finally, I think many people buy art strictly as an investment, hoping that it will appreciate in value.

If you look at the reasons people buy art, only one of them – buying art for your home – has to do with the physical work.

Every other reason for buying art that I listed could apply to crypto art.

You can build your own virtual gallery online and share it with other people online. You can convey your tastes and interests through your virtual gallery and support artists by buying their work.

You can participate in a community: Some crypto artists, who have felt excluded by the mainstream art world, say they have found more support in the crypto community and can now earn a living making art.

While Beeple’s big sale made headlines, most crypto art sales are much more affordable, in the tens or hundreds of dollars. This supports a much larger community than just a select few artists. And some resale values have gone up.

Aside from the visual pleasure of physical objects, nearly all the value art offers is, in some way, a social construct. This does not mean that art is interchangeable, or that the historical significance and technical skill of a Rembrandt is imaginary.

It means that the value we place on these attributes is a choice.

Story #3. It’s not really a story, but a common observation: Millionaires and billionaires love to see their names on things: Hospitals, schools, libraries, sports’ centers, etc. So they give away millions or billions of dollars, just to see what they could have seen for a few dollars or nothing: Their names.

What do they get for their money? Nothing physical.

They could have contributed without insisting that their name be engraved somewhere. They received the same benefit as did the person who bought the crypto art, and the same benefit I received for buying three transparent stones my wife could wear.

And that is the not-so-secret of the balance sheet notation we call “money.” Those arbitrary, non-physical, made-from-thin air dollars have enough value to be traded for  . . . traded for what? A couple of transparent stones? A picture?

They all are valuable because we social animals choose to deem them valuable.

You might respond that scarcity is what makes them valuable. But plenty of things are scarce and not valuable. I paint, but my paintings are not valuable, though they are just as scarce as the Mona Lisa.

You might say beauty or artistic talent makes them valuable. But before artists become famous, their paintings are just as beautiful and require just as much talent, but are valued much less.

When someone pays $90 million for a metal balloon animal made by Jeff Koons, it’s hard to believe that the work has that much “intrinsic” value.

Even if the materials and craftsmanship are quite good, surely some of those millions are simply buying the right to say “I bought a Koons. And I spent a lot of money on it.” If you just want an artfully made metal balloon animal, there are cheaper ways to get one.

Conversely, the conceptual art tradition has long separated the object itself from the value of the work. Maurizio Cattelan sold a banana taped to a wall for six figures, twice; the value of the work was not in the banana or in the duct tape, nor in the way that the two were attached, but in the story and drama around the work.

Again, the buyers weren’t really buying a banana, they were buying the right to say they “owned” this artwork.

Depending on your point of view, crypto art could be the ultimate manifestation of conceptual art’s separation of the work of art from any physical object. It is pure conceptual abstraction, applied to ownership.

On the other hand, crypto art could be seen as reducing art to the purest form of buying and selling for conspicuous consumption.

In Victor Pelevin’s satirical novel “Homo Zapiens,” the main character visits an art exhibition where only the names and sale prices of the works are shown. When he says he doesn’t understand – where are the paintings themselves? – it becomes clear that this isn’t the point. Buying and selling is more important than the art.

This story was satire. But crypto art takes this one step further. If the point of ownership is to be able to say you own the work, why bother with anything but a receipt?

The reason art, or anything else — cars, houses, jewelry, etc. — has value is not just its intrinsic value. For most of us, there are cheaper forms of transportation, cheaper forms of shelter, and cheaper stones than what we paid. A scratched and dented car has the same transportation value as does a shiny, untainted car.

We are social animals. These things have value because other people think they have value, and they are willing to exchange other things they think have value to get them.

And that is why money has value.

Money has value because the world thinks it has value. Remember, money has no physical existence. It is just a bookkeeping notation. And that same notation might appear in several places.

It might appear on your bank’s computer, on your computer, or on dozens of other computers. No matter how many computers it appears in, it still is the same money. It still has the same value.

It still seems hard to get used to the idea of spending money for nothing tangible.

Would anyone pay money for NFTs that say they “own” the Brooklyn Bridge or the whole of the Earth or the concept of love? People can create all the NFTs they want about anything, over and over again. I could make my own NFT claiming that I own the Mona Lisa, and record it to the blockchain, and no one could stop me.

But I think this misses the point.

In crypto art, there is an implicit contract that what you’re buying is unique. The artist makes only one of these tokens, and the one right you get when you buy crypto art is to say that you own that work.

Actually, the more important right is to say that you can afford to own the work.

As an investment, crypto-art just seems inconceivable to me that the higher prices reflect true value, in the sense of these works having higher resale value in the long term. As in the traditional art world, there are a lot more works being sold than could ever possibly be considered significant in a generation’s time.

And, in the crypto world, we’re seeing highly volatile prices, a sudden frenzy of interest, and huge sums being paid for things that seem, on the surface, not to have the slightest bit of value at all, such as the $2.5 million bid to “own” Jack Dorsey’s first tweetor even the $1,000 bid on a photo of a cease-and-desist letter about NFTs.

Much of this energy seems to be driven by price speculation. It’s also worth noting that the winner of the Beeple auction seems to be heavily invested in the success of crypto art. The cryptocurrencies that drive crypto art are often considered highly speculative.

Yes, there could be a tulip-bulb bubble at work here. And, where there is no intrinsic value, the possibility of a bubble increases.

But money itself has no intrinsic value. The value of the U.S. dollar is backed by the full faith and credit of the U.S. government. (See: Understanding Federal Debt. Full Faith and Credit.)

But what backs the full faith and credit of the U.S. government. No, not the “amber waves of grain,” or the “purple mountain majesties,” or the “enameled plain.” No creditor can acquire those.

The value of the Mona Lisa, the diamond ring, a mansion, a Rolls Royce car, the full faith and credit of the U.S. government, and the value of the U.S. dollar itself, all are backed by the same thing: Society’s belief that they have value.

Do you believe the dollar, that whispy, non-physical number in a bookkeeping record has value? If so, you are part of the billions of people who also think it has value.

Your dog doesn’t value a dollar. A fish doesn’t value a dollar. Tribes in the Amazon jungle don’t value the dollar.

But billions of people do, simply because other billions of people do. That is how value is determined.

When people claim that the federal government or some agency of the federal government (Social Security, Medicare et al) is in danger of running short of dollars, the ignorance is manifest. How can a government run short of something it creates by waving a magic wand (in the form of a computer key)?

Soon, President Biden will tell us he has to raise taxes in order to “pay for” the trillions being spent for COVID relief. It is utter nonsense. It is terrible, horrible, damaging Big Lie.

It is a lie that punishes America every day, by preventing us from having Medicare for All, Good Education for All, Good Housing for All, Good Food for All, Good Clothing for All, Good Transportation for All, and every other easily affordable (by the federal government) benefit.

The U.S. government not only has the unlimited ability to create dollars from thin air, but it can give those dollars any value it chooses (i.e. prevent or cure inflation.) The government neither borrows nor levies taxes to obtain dollars. It just waves that magic wand.

What is a dollar worth? Whatever its creator and society says it’s worth.

Hey, 69 million of them are worth the ability to claim you own a link to a JPEG file.

And it cost the federal government absolutely nothing to create those 69 million dollars.

In that same vein, if you send me a thousand dollars, I will send you (electronically, of course) a receipt saying you sent me $1,000. You can print it and hang it proudly in your home.

Giving you that receipt will cost me as much as providing free Medicare for All would cost the U.S. government. 

Exactly as much.

Rodger Malcolm Mitchell

Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..


The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.


Inflation: The causes and cures

In one sense, inflations (and hyperinflations) must be complex, not only because so many nations have suffered from them and not known what to do, but because so many events can cause inflations.

But in another sense,  many nations have figured out how to prevent and cure inflations, and the causes can be boiled down to just two. This post reveals the two causes of, and the two best cures for, inflation.

Inflation does not exist in a vacuum. It is a change in the relationship between the value of a currency and the average value of goods and services. In short, the value of the currency declines relative to the value of the goods and services.

Image result for hyperinflation germany wheelbarrow
Classic example of hyperinflation — wheelbarrow of money.

Popular wisdom holds that government deficit spending or “money creation” causes inflation. Many examples of inflation, particularly hyperinflation (an extreme form of inflation) do seem to correspond with money creation.

Weimar Republic (Germany) and Zimbabwe are perhaps the most cited examples.

Yet, in the U.S., the money supply has increased markedly with only moderate inflation.

The following graph shows indexes of three money measures, M1 (green), M2 (red), and M3 (blue), along with the consumer price index measure of inflation (purple). All indexes are based on January 1980 = 100.

While all three money measures have risen substantially, inflation has been comparatively modest, and within the Fed’s target of 2.5% annually. Why?

Here is another graph comparing the rise of federal debt (total of T-security accounts) with the consumer price index:

Federal debt grew massively while inflation remained moderate.

Again, there seems to be scant relationship between federal debt growth and inflation.

It would be difficult to look at these data and conclude that federal deficit spending (i.e. money creation) causes inflation. In fact, money creation seems to be a government’s response to inflation, not the cause.

Where does that leave us?

Inflation is based on the value of goods and service vs. the value of a currency. The value of goods and services is based on Demand/Supply. The value of a currency also is based on Demand/Supply.

The formula for the value of goods and services (Demand/Supply) is driven mostly by changes in the Supply side of the fraction. When food or energy are in short supply, inflation is inevitable. The Demand for food and oil (today’s stand-in for energy) is far less variable.

In the formula for the value of dollars, Demand/Supply, both Demand and Supply can be quite variable. The Demand for currency is based on Reward/Risk. The Reward for owning dollars is interest. The Risk would be the reduced “full faith and credit” of the issuer.

Because the full faith and credit of the U.S. essentially is perfect, Risk is not an important variable here.

This means that inflation comes when the Reward for owning dollars (interest) declines and/or the Supply of food and/or energy declines.

A larger economy has more money than does a smaller economy. For instance, California has a larger economy and more money than does Los Angeles. Therefore, to grow an economy requires growing the money Supply. 

That indicates that trying to fight inflation by limiting the money supply (aka austerity), via reduced deficit spending and/or increased taxation, will lead to recession or depression.

Annual % change in Federal Debt shows that reductions lead to recessions (vertical bars), and increases cure recessions.

As for surpluses (i.e. extreme deficit reductions), they lead to depressions (i.e. extreme recessions):

1804-1812: U. S. Federal Debt reduced by 48%. Depression began in 1807.
1817-1821: U. S. Federal Debt reduced by 29%. Depression began in 1819.
1823-1836: U. S. Federal Debt reduced by 99%. Depression began in 1837.
1852-1857: U. S. Federal Debt reduced by 59%. Depression began in 1857.
1867-1873: U. S. Federal Debt reduced by 27%. Depression began in 1873.
1880-1893: U. S. Federal Debt reduced by 57%. Depression began in 1893.
1920-1930: U. S. Federal Debt reduced by 36%. Depression began in 1929.
1997-2001: U. S. Federal Debt reduced by 15%. A recession began in 2001.

Bottom line: Inflation devolves to two variables: The supply of food and/or energy and interest rates.

The prevention and cure for inflation is to make sure the Supply of goods and services (usually food or energy ) is adequate, and the Reward for owning dollars (interest), remains adequate.

Example: Zimbabwe’s hyperinflation began when its leader, Robert Mugabe stole farm land from white farmers and gave it to black people who had no experience farming.

The resultant food shortage caused inflation.  Then, Mugabe’s response was to print currency, which did nothing to solve the fundamental shortage problem. And as the inflation worsened, more and more useless currency printing followed, and it was the currency printing that wrongly was blamed for the inflation.

It was as though someone prescribed wine to cure a cancer. As the cancer progressed, more and more wine was prescribed until the patient died, and the wine was blamed as the cause of the cancer.

 In short, to prevent inflation don’t cut federal deficit spending. Rather, make sure the economy has plenty of food and energy and high enough interest rates.

And so, to cure an existing inflation, you must increase your supply of food and energy, and/or increase interest rates.

Printing more currency is an ineffective inflation cure, as is cutting deficit spending (aka “austerity.) Both exacerbate inflation and lead to recessions and depressions. Instituting austerity to grow an economy is like applying leeches to cure anemia. 

What should a Monetarily Sovereign country do about inflation? Here are the best steps to take:

  1. Increase interest rates to make the currency more valuable. This is the method the Fed uses to control inflation.
  2. Support farmers by cutting farm taxes, passing farm support bills, support farm research to increase crop yields.
  3. Support energy creation: Oil drilling, renewable energy.
  • Do not blame federal deficit spending for causing future inflations
  • Do not begin austerity (reduced deficit spending, increased taxation)
  • Do not print additional currency.
  • Do not borrow a foreign currency

What about monetarily non-sovereign nations like the euro countries, which do not have a sovereign currency?

If the EU cannot be convinced to prevent and cure inflations, while supporting economic growth, euro nations must re-establish their own currencies, and become Monetarily Sovereign, again.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy, and narrow the income/wealth/power Gaps between the rich and you.


Economics in a thousand words

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


Science is the search for cause and effect. The human thought process first answers the question, “What?” then seeks, “Why?” and “How?”

Scientific thought begins with facts, from which are derived data and finally conjecture (hypothesis).

Scientific proof comes from physical evidence, predictability, and reproducibility. In chemistry, a physical science, the prediction can be made that combining chlorine with sodium will produce (predictability) common salt. So chemists repeatedly combine those two elements (reproducibility), and repeatedly produce salt (physical evidence).

Social sciences, of which economics is one, rely on the vagaries of human thought, emotion, superstition and belief. Predictability, reproducibility and physical evidence often are lacking.

What then constitutes proof in economics? There are no proofs in economics. There only are facts and data from which emerge hypotheses.

Hypotheses are not certainty. Facts and data can breed multiple hypotheses. The lack of scientific certainty can produce emotional certainty, with resultant firm beliefs leading to strong disagreements. (Think of disagreements about religion and politics.)

Though the science of economics is massively complex, and even includes its own mysterious technical jargon, the layperson can understand basic economics by learning just a few facts.

The following are what I believe to be those important facts of economics. If you, or any person, holds a conjecture that does not comport with these facts, this is your opportunity to eliminate a conflicting hypothesis from your beliefs.


  1. All money is debt. There is no, nor ever has been, any form of money that is not debt.
  2. The value of debt/money is supported by collateral, which determines its acceptance.
  3. All money is created by debtors, who owe the holders of money, full faith and credit as collateral. The collateral for the U.S. dollar is the full faith and credit of the U.S. government.
  4. The secondary collateral for money may be a physical asset, for instance gold, a house, a car, land, etc. While gold, houses, cars and land are not in themselves money, additional collateral can increase the acceptance of money.
  5. All money is created by laws.  In the late 1770’s, the new U.S. federal government created laws from thin air. Some of these laws created the original dollars, also from thin air. Money-creation laws may be written, oral or mutually understood. All laws and all forms of money are no more than ideas, with no physical existence. The federal government’s legal device for money creation is deficit spending.
  6. Any person or group of people can create money, simply by passing or agreeing to laws that create debt. Such money creators are known as “borrowers” and “debtors.” Examples are: Banks that accept deposits (which they owe to depositors), mortgagors (who owe to mortgagees). In each case, the acceptance and Value of money is based first on the borrower’s full faith and credit.
  7. In addition to full faith and credit, the Value of money is based on Supply and Demand, according to the formula: Value = Demand/Supply.
  8. Demand = Reward/Risk. The Reward for owning money is interest, with increased rates causing increased Demand. The Risk of owning money is inflation.
  9. Laws have no physical existence. Having no physical existence, laws can be created in unlimited quantities by any person or entity, their only effective limit being their acceptance.
  10. Because all money is created by laws, money can be created in unlimited quantities by lawmakers. This is known as Monetary Sovereignty, the unlimited ability to create a sovereign currency by the creation of laws.
  11. Lawmakers never can unintentionally run short of their own sovereign currency. The simple expedient of passing a new law, gives the lawmakers unlimited ability to pay any debt denominated in their own sovereign currency.
  12. A lawmaking entity never needs to ask (by taxing or borrowing) outside entities for supplies of its own sovereign currency. The U.S., for instance, being Monetarily Sovereign, neither needs nor uses taxing or borrowing to pay its obligations.
  13. Federal financing is unlike personal financing. Federal deficits are not directly linked to federal debt. Deficits, the difference between taxes and spending, are not directly linked to federal debt, the total of deposits in T-security accounts at the Federal Reserve Bank. Federal deficits could exist without federal debt, and federal debt could exist without federal deficits.
  14. U.S. “borrowing” consists solely of providing safe storage and investment of its own sovereign currency, the dollar, via Treasury accounts (bills, notes and bonds) at the Federal Reserve Bank, i.e bank accounts. (The term “debt” for these accounts can be misleading in that unlike personal and business debt, FRB accounts are not a burden on the Monetarily Sovereign federal government. The FRB accounts are paid off, as are all other bank accounts, by simple transfers of existing dollars from the FRB accounts to checking accounts.)
  15. A Monetarily Sovereign entity pays debts denominated in its own sovereign currency, by creating its sovereign currency ad hoc, and delivering that sovereign currency to creditors. The entity neither needs, nor uses, nor even retains taxes denominated in its own sovereign currency.
  16. Inflation (i.e price inflation) is the loss in Value of a currency compared with the prices of goods and services. Value (or Price) = Demand/Supply.
  17. Inflation can be caused by any combination of:
    1. An increase in the Supply of a currency
    2. A decrease in the Demand for a currency
    3. An increase in the Demand for goods and services
    4. A decrease in the Supply of goods and services.
    5. An decrease in the Reward for owning money (interest)
    6. An increase in the risk of owning money (cumulative inflation)

    You now know the most important facts in the science of economics.

    The following is a mention of selected data and conjecture. The purpose of this mention is to address certain common misconceptions about money.

    The sole purposes of taxing are political and as money-supply control.

    Politically, taxes give the illusion that they pay for spending. The purpose is to limit financial demands by the populace. (Many leaders fear that demands for money would grow excessively if the populace ever were to understand that the federal government is not limited in its ability to pay bills.)

    1. Leaders claim that money creation (incorrectly called “printing”) will lead to an uncontrollable inflation and,
    2. Leaders fear that the gap between the rich and the rest will narrow.

    (The gap is what makes the rich rich. Without the gap, no one would be rich, and the wider the gap, the richer they are. So, the rich want the gap to widen. They pay politicians, the media, university economists, and other influentials to cut deficit spending [money creation] and to tell the populace that the federal government is monetarily non-sovereign, federal taxes are necessary for federal spending, and federal “debt” is owed by taxpayers.)

    Historically, inflations have been caused by a decrease in the Supply of goods and services (primarily, oil and secondarily, food), with an increase in the Supply of currency being an exacerbating government response, not the initial cause.

    Historically, inflations have been prevented and cured via interest rate control and increased Supply of goods and services.

    Though some economists recommend controlling inflation by reducing the supply of money (increased taxation and/or reduced spending), these devices are determined by Congress, and therefore are slow, politically controversial and inexact. By contrast, interest rate increases can be accomplished quickly by the Federal Reserve and in small increments.

    For comparison:

    Meteorology, like economics, currently suffers limited predictability and reproducibility, primarily because of the mathematically chaotic nature of weather. Like economics, it one day may mature as a science, when computer modeling of historical data improves.

    Religion is not, and never will be, a science. It is based solely on one fact (the universe exists), with no data leading to the prime conjecture, the existence of one or more gods, and no proofs.

Rodger Malcolm Mitchell
Monetary Sovereignty


Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually Click here
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt


Recessions begin an average of 2 years after the blue line first dips below zero. A common phenomenon is for the line briefly to dip below zero, then rise above zero, before falling dramatically below zero. There was a brief dip below zero in 2015, followed by another dip – the familiar pre-recession pattern.
Recessions are cured by a rising red line.

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.


Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.
•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
•Deficit spending grows the supply of money
•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
•The limit to non-federal deficit spending is the ability to borrow.

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between rich and the rest..
•Austerity is the government’s method for widening
the Gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..