–Oh, woe! The euro nations blast Britain for not joining them in economic suicide.

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Under the “Misery loves company” banner, the euro nations, having indulged in a spate of self-mutilation by adopting the euro, are really, really angry at Britain for remaining whole. Unfortunately, like naive teenagers who mindlessly join their peers in folly, Britain yet may succumb.

New York Times
Britain Suffers as a Bystander to the Euro’s Crisis
By Sarah Lyall and Stephen Castle, December 7, 2011

LONDON — No matter what happens at the European summit meeting on the euro in Brussels that begins Thursday, Britain is sure to lose.

There is looming recognition at 10 Downing Street that if the euro falls, Britain will sink along with everyone else.

Total myth. A Monetarily Sovereign nation never needs to “sink” financially. In the crazily extreme case where every last citizen and every last bank in Britain saw their eurobond holdings drop in value to zero, Britain still could exchange pounds for those worthless bonds, and just keep on sailing.

But if Europe manages to pull itself together by forging closer unity among the 17 countries that use the euro, then Britain faces being ever more marginalized in decisions on the Continent.

Many Europeans have been irritated by British Conservatives’ quiet satisfaction throughout the crisis with the decision not to join the euro (the United Kingdom ostentatiously kept its currency, the pound), particularly when juxtaposed with the panic over Britain’s inability to have any significant impact on Europe’s biggest crisis since the end of the cold war.

Sure they’re irritated. They blindly gave away the single most valuable asset any nation can have – their Monetary Sovereignty – and now they look with envy at a nation that was not so foolish. The euro nations resemble the followers of Harold Camping, that guy who repeatedly predicted the end of the world. These folks gave away all their money and worldly possessions, and undoubtedly are angry at those who weren’t so nuts.

“Germany is the unquestioned leader of Europe,” said Charles Grant, director of the Center for European Reform. “France is definitely subordinate to Germany, and Britain has less influence than at any time I can recall.”

Yes, Germany is the unquestioned leader of the broke, battered and busted. Weep for Britain, which being Monetarily Sovereign, can pay any bill of any size at any time, and does not need to come hat-in-hand to the EU, begging for euros. How sad for Britain.

Despite all that is at stake, Prime Minister David Cameron’s coalition government looks doomed to be cast in the role of impotent bystander, torn between anti-Europe forces and European leaders’ moves toward greater fiscal integration on the Continent — with or without Britain.

Yes, “doomed” to have money, while the euro nations continue to struggle with half-baked solutions to their mounting problems. There are two, and only two, long-term solutions for the euro nations:

1. Return to Monetary Sovereignty by re-adopting their sovereign currencies (just like Britain).
or
2. The EU to give (not lend) euros to member nations as needed (just like the U.S. can and should do for its states).

There are no other long-term solutions. None.

On Wednesday, Mr. Cameron told a fractious Parliament that his main goal in Brussels was to “seek safeguards for Britain” and “protect our own national interest” by resisting measures like a proposed financial transaction tax. But such Britain-centric rhetoric has annoyed the brokers of Europe’s future, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, who are trying to find a way to save the euro while imposing legally binding fiscal discipline on the Continent’s floundering southern economies.

In short, Merkel and Sarkozy scream, “Help, we’re drowning, because we drilled holes in our ship of state and then threw away our life preservers. So Britain, we want you to drill holes in your own boat, and jump in with us losers – or we’ll be angry at you.”

They have not been shy about expressing their frustration. Just six weeks ago, after Mr. Cameron tried to inject himself into talks about the euro, Mr. Sarkozy said bluntly, “You have lost a good opportunity to shut up.” He later added: “We are sick of you criticizing us and telling us what to do. You say you hate the euro and now you want to interfere in our meetings.”

In even shorter, “We screwed up, and now we’re drowning. We can’t swim, things are getting worse by the minute, and we have no idea what to do. But we resent your advice. Glub, glub, glub.”

“Said Alexander Stubb, Finland’s minister for European affairs. “When we look at future E.U. rules, it is the triple-A countries that are running the show.”

Perfect. Monetarily non-sovereign France, which would go broke without EU help, has an AAA rating. The Monetarily Sovereign U.S., which cannot go broke, and needs no help, not only is rated AA by S&P, but has been threatened with further downgrades. That tells you nothing about the U.S., but speaks volumes about S&P (the guys who gave an AAA rating to worthless mortgage securities, and still haven’t admitted to being stupid or crooked.)

France and Germany have already made it abundantly clear that they will go ahead with their plans for the euro zone without regard to the needs or interests of Britain.

The explosive debate in Britain, while never welcome, comes at an unusually inopportune time for Mr. Cameron. The so-called special relationship with the United States is not looking all that special right now, and enormous cuts in defense spending are making it hard for the British military to maintain its status as America’s right hand.

The austerity budget is fraying at the edges, amid strikes and protests over layoffs and rising fees. Growth has been slowing, despite Mr. Cameron’s insistence that businesses would pick up the pace when it became clear that the government’s finances were sound. And now Britain looks to be in an unusually poor position to defend its interests in Europe.

And that is the saddest paragraph of all. Britain is Monetarily Sovereign, but as in the U.S., its leaders have convinced the populace they are monetarily non-sovereign. So, they subject their people to grinding austerity for no reason whatsoever.

Most dangerous to Mr. Cameron was the unwelcome intervention of the mayor of London, Boris Johnson, a potential wild-card rival for the Conservative leadership. Mr. Johnson, who is perhaps Britain’s most popular politician, enjoys injecting himself into questions of foreign policy when the spirit moves him.

If Britain was asked to sign a treaty creating “a very dominant economic government” across Europe, he told BBC radio, then Mr. Cameron should veto it. “And if we felt unable to veto it, I certainly think that it should be put to a referendum,” he said. He added that in rescuing the euro, there was a danger of “saving the cancer, not the patient.”

Exactly correct. There is no benefit for Britain, or any other Monetarily Sovereign nation (the U.S. included), in merging with the deadbeats of the eurozone. They may call Britain bad names, as they “tempt” the British with a nice, fancy suicide belt, but Britain was the smart one.

I pray the citizens of Britain soon understand the massive advantages they have in being Monetarily Sovereign. Too bad the citizens of the U.S. have not yet learned that lesson.

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

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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
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY

–OMG! Mark Kirk, a Republican who wishes to protect Americans — even the 99%

I have criticized my Republican Senator, Mark Kirk, on many occasions for not understanding even the basics of Monetary Sovereignty, yet voting on economic bills that would hurt his constituents — at least, the less wealthy 99%.

I have accused him of blindly following the Republican leaders, who repeatedly act against the interests of the poor and middle classes of America.

Well, though that may have been true of his economics, it does not seem to be true of his belief in Constitutionally guaranteed freedoms. Recently, I wrote to him, complaining about the panic-driven, politics-driven, Republican-driven* [see below] Defense Authorization act in which the military can arrest anyone they darn well please, for any reason or for no reason at all.

According to this bill, the military could drag you off the street, and clap you in prison, and even deny you council — clear violations of the United States Constitution — and not even say why.

(I’m old enough to remember the Japanese-American citizens being trundled off to concentration camps, because they were biologically related to Japanese — another American disgrace, this one by a Democrat.)

Because Senator Kirk is a Republican, and you know how patriotic they say they are, I assumed he was part of this monstrosity. I was wrong. Here is what he wrote to me:

Dear Mr. Mitchell:

Thank you for contacting me regarding the detainee provisions in the Fiscal Year 2012 National Defense Authorization Act. I appreciate learning your thoughts on this important matter and welcome the opportunity to respond.

Since enactment of the Posse Comitatus Act of 1878, the role of the U.S. military in enforcing our domestic laws inside the United States has been very limited. During the week of November 28, the Senate considered S.1867, the Fiscal Year 2012 National Defense Authorization Act. This legislation includes sections specifically authorizing our military to arrest and detain anyone, including U.S. citizens inside America, who the President suspects may be connected to Al Qaeda or the Taliban.

In my view, American citizens inside this country have inalienable Constitutional rights that can only be removed by a civilian jury of your peers. Others argue that America is a “battlefield” where the President should have the power to order our military to seize U.S. citizens in this country on a suspicion that they may back terror.

Under the Declaration of Independence, Americans were promised rights against the State that were “inalienable”, i.e. no future President or Congress could ever take them away.

Under our Constitution, your rights are defined:

— You are promised that the trial of ” all crimes, except in Cases of Impeachment, shall be by Jury “.

— You cannot ” be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court “.

— Under the Fourth Amendment, you are ” secure in [your] persons, houses, papers, and effects, against unreasonable searches and seizures “. This right ” shall not be violated, and no warrants shall issue, but upon probable cause “.

— Under the Fifth Amendment, you cannot be ” held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury “.

— Under the Sixth Amendment, you have a right to a ” speedy trail “.

— Under the 14th Amendment, ” no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States “.

In my view, the Senate bill violates your basic rights, guaranteed to you by our Constitution. Rather than forcing the state to prove your guilt by a unanimous vote of a jury “beyond the shadow of a doubt”, this law allows you only one petition to a civilian court under a writ of habeas corpus, then allowing a military court to hold U.S. citizens by only a “preponderance of the evidence”.

The last time Congress enacted a law allowing the indefinite detention of U.S. citizens was during the McCarthy era. Passed over President Truman’s veto in 1950, the “Emergency Detention Act” authorized indefinite detention of Americans likely to commit espionage or sabotage. Fortunately, this authority was never used and President Nixon signed the repeal of this law in 1971. His repeal stated that “no citizen shall be imprisoned or otherwise detained by the United States except pursuant to an Act of Congress”.

The detention authority of the Senate bill would roll back decades of protections for U.S. citizens. While the U.S. military has and should keep the power to detain or even attack Americans serving in foreign armies or terrorist organizations overseas (like Anwar al Awlaki who fought the U.S. from a terrorist base in Yemen), the U.S. military should not be authorized to arrest and detain U.S. citizens based on activity conducted in the United States. That is the mission of the FBI, Department of Homeland Security, state and local law enforcement. Americans who are arrested should never lose their constitutional rights until they are convicted in a civilian court by a jury of their peers.

In the Senate, I voted for three amendments that strike or limit the scope of these provisions. Amendment 1107, introduced by Senator Mark Udall (D-CO), would have struck Sections 1031 and 1032, but it was defeated by a vote of 38 to 60. I also supported Senator Diane Feinstein’s (D-CA) amendment 1125 that would have eliminated the military’s power to arrest and detain U.S. citizens inside America. This amendment was defeated by a vote of 45 to 55. In the end, the Senate adopted another amendment offered by Senator Feinstein, stating that this bill does not expand authority to apprehend and detain U.S. citizens in the United States – a thin cover for our basic rights.

President Obama said that he would veto this legislation if it contains overly broad powers for the U.S. military to arrest U.S. citizens on U.S. soil. He is right on this issue and I will support his veto on this question.

The remainder of this long piece of legislation, the National Defense Authorization Act, is beneficial for the country. The bill provides a pay increase for Americans in uniform. It fully funds special operations forces across the world. It also helps clean up troubled and wasteful defense construction and procurement programs. The bill also contains the Menendez-Kirk amendment, passed by a vote of 100-0, to impose crippling sanctions on the Central Bank of Iran in an effort to stop Iran from acquiring nuclear weapons. Therefore, I voted to move the bill forward to a House-Senate conference, secure in knowing that the President will be able to strike the provisions I outlined on our rights while advancing the provisions I outlined just above.

Thank you for taking the time to contact me on this issue. Please feel free to contact me at (312) 886-3506 or on line at http://kirk.senate.gov if you have any questions or concerns before Congress or the federal government. It is an honor to serve you in the Senate.

Very truly yours,

Mark Kirk
U.S. Senate

I commend Senator Kirk for standing up to the very jerks who love to wrap themselves in the flag of patriotism, while defiling the Constitution and harming Americans. That took intelligence and courage. This is especially commendable, because there is no doubt the people affected would be part of the “hated” (by Tea/Republicans) 99%. I suspect no one in the 1% will be arrested by the military. They have good lawyers.

Now Senator, if only you would display the same intelligence and courage with regard to understanding Monetary Sovereignty. You again could stand up to the jerks who would send this nation into another depression.

Try.

*While virtually the entire Senate voted for the bill, it primarily was the Republicans who voted against Amendments 1107 and 1125, which would have eliminated the unconstitutional parts of the bill. If this bill goes to the Supreme Court it will be interesting to see what the right wing, Constitutional “originalists” have to say.

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

#MONETARY SOVEREIGNTY

–Two headlines revealing the pro-rich, anti-middle, anti-poor austerity efforts of the media

Unremittingly and unashamedly biased toward the richest 1%, the Chicago Tribune editors seem to relish in their role as mouthpiece for the moneyed. To their credit however, the news sections of the paper seem less affected, which is why two revealing headlines appeared in one issue of the paper.

The two headlines illustrate the remarkable perfidy, not just of the Tribune, not just of the media, but of the politicians — the Congress and the President –running this nation on behalf of the wealthy.

The first headline — actually leading an editorial in the 12/6/11 issue: “Europe wept, still cut the debt”

The editorial goes on to say:

. . . Europe is starting to show the U.S. how to put an overspent, overborrowed economy back on track.

The key is establishing a credible plan to get out of debt . . . Announcing necessary cuts to an unaffordable pension system on Sunday, (Italian Welfare Minister Elsa) Fornero got choked up. She started to explain at a press conference, that Italy’s government had no choice but to require shared sacrifice.
[…]
What we wouldn’t give to see the cast of characters running Washington and Springfield take ownership of the financial mess they’ve put us in, and take action to get us out before we’re in as dire straits as Italy.

Some of you already may have puked at the implied and actual disinformation in this editorial. For the rest of you, let me explain.

Because the U.S. federal government is Monetarily Sovereign in the dollar, it can fund any amount of spending in its sovereign currency, without taxes or borrowing, limited only by inflation. Italy is monetarily non-sovereign. It uses the euro, over which it has no control. Two, diametrically opposite situations, requiring opposite action.

Like Italy, the U.S. states, counties and cities are monetarily non-sovereign, which is why they can have the difficulty paying their bills — a difficulty the federal government never has.

In short, any comparisons between the U.S. financial position and Italy’s are false — outright lies intended to deceive you in the 99%.

And as for “shared sacrifice,” what a crock! The sacrifice “sharing” will be among the middle and lower classes — the 99% — and their children. The rich will feel nothing, in fact will grow stronger by comparison.

The editorial continues:

The week kicked off with Italian austerity measures that mean business . . . . the minimum age for government-funded pension benefits would rise to 66 from 62 and most payments would be decoupled from inflation. No more automatic cost of living increases. Taxes would go up, too. . .

Let’s hope the European Union summit slated for Thursday and Friday yields progress — and an example for the U.S. to follow.

Who will be hurt? The lower 99%. Who will benefit from the increased wealth gap between rich and poor? The upper 1%. In the guise of fiscal responsibility, the Tribune’s well-paid, well-perked editors front for the rich against the middle and poor.

The second headline — remarkably, on the front page of the same 12/6/11 issue: “Post office cuts to hurt blacks”

The article goes on to say:

Closing centers will have huge impact on minority workers

For years, getting a government job meant security, good pay and a pathway into the middle class for many Americans, especially African-Americans and other minorities.

But with government agencies at all levels forced to slash expenses in a bid to balance budgets, that long-held promise is in danger of being broken.

The U.S. Postal Service’s announcement Monday that it plans to close 252 mail processing centers and trim 28,000 jobs to fend off possible bankruptcy is part of a growing trend of shrinking government employment opportunities.
[…]
“People have raised their kids with these jobs and bought homes in the black community,” said Adrian Peeple, 42, of South Holland, who began her career as a letter carrier . . .

Message to Ms. Peeple: The Tribune editors don’t give a damn about you. The politicians don’t give a damn about you. The richest 1% of doesn’t give a damn about you.

They tell you the government can’t afford to support you. It’s a ruse to keep you down. Sadly, their treachery has kept you ignorant of the truth, which is that the government is Monetarily Sovereign. It can afford to support your Post office. In the words of my newly converted pal, Barry Ritholtz:

The US government can always fund its spending, regardless of access to external debt markets or tax revenues, so long as it keeps inflation under control and doesn’t push aggregate spending beyond the economy’s capacity.

As a comfortable member of the 1%, I tell you this: Any member of the poor- and middle-class 99%, who pays for the Chicago Tribune is paying to be enslaved.

Ms. Peeple, there will come a day of enlightenment, and in the words of the New Testament, “Then you will know the truth, and the truth will set you free.”

Until then, don’t believe those who repeatedly step on your neck. Seek the truth.

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

#MONETARY SOVEREIGNTY

–Does Barry Ritholz finally get it? Did he “know” it all the time?

Do you think Barry Ritholtz finally gets it? Remember, this is the same Barry Ritholtz who wrote a scare article titled, “Who Will Buy Treasuries When the Fed Doesn’t” in which he described U.S. Treasuries as a Ponzi Scheme.

And when I wrote that the U.S. is Monetarily Sovereign and doesn’t need to sell Treasuries, nor is it in any danger of defaulting, this is the same Barry Ritholtz who said, “Jeebus, you fucking sovereign guys are such dreadful bores.” (Exact quote) And then he erased all my comments from his blog.

Now, the newly enlightened (?) Barry writes at http://finance.yahoo.com/news/why-sovereign-debt-ratings-may-161948941.html?l=1

The US still controls its own currency and issues debt in that currency. The US government can always fund its spending, regardless of access to external debt markets or tax revenues, so long as it keeps inflation under control and doesn’t push aggregate spending beyond the economy’s capacity.

The euro zone isn’t like that. The governments of France, Italy, Spain, and Germany issue debt in the euro, a currency they do not control.

Exactly correct, Barry. No Ponzi scheme. No concerns about who will buy our debt. Unlike the monetarily non-sovereign euro nations, the Monetarily Sovereign U.S. has only one constraint on its deficit spending: Inflation, not the ability to service its debt.

Since inflation is under control, and will be for the foreseeable future, and our real and immediate problem is lack of money and growth, why have the politicians, the media and Barry been so crazed about reducing the federal debt?

Ignorance and/or servility to the wealthy 1%. Which do you think describes Barry?

I ended the post titled, “The conversation Barry Ritholtz wouldn’t publish” with this line: “I expect that sometime down the road, Monetary Sovereignty will be understood and accepted by the mainstream, and Barry then will tell you he knew it all the time.”

Getting there, Barry. Late to the party, but always welcome.

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

#MONETARY SOVEREIGNTY

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