–How did the 1% convince the 99% to lose the war?

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

That a real war has existed between the 1% and the 99% cannot be doubted. And that the 99% has lost, also cannot be doubted.

So the question becomes, with 99% of the votes in this democracy, how did the 99% manage to lose — and badly? Answer: The same way any small force wins against a large force: By convincing the large force to work against itself.

First came money. The media are owned by the 1%, and while in the past, the media had leaned toward the liberal, i.e. toward the 99%, that was back in the days when the media were ruled by morality.

No more. With the advent of the Internet, the media found themselves in financial difficulty, so they felt they were obliged to forsake morality, and today, the media are ruled by money.

But money alone does not win elections; ultimately issues, supported by money, win. So, conveniently, along came Al Queda and Iraq’s Saddam Hussein, the 1%’s gift from heaven. And just in time, too, for Russia, as bogey man, was beginning to wear thin, with the end of the Soviet Union.

Yes, with money, the 1% could convince the 99% that America was in imminent danger from little Iraq’s non-existent Weapons of Mass Destruction. And when a nation is in danger, the people turn to the politician perceived to be toughest, no matter how clearly inept that politician may be.

Enter tough guy, cowboy, George W. Bush, of the Republican Party, which also was the party considered to be tougher.

He had been in office less than a year, when fate sent him another miracle: The al Qaeda 9/11 attack. This allowed President Bush to convince the 99% to surrender many of their Constitutional rights — for “security” — and a huge battle in the war was lost by the 99%.

Later, GWB appointed John G. Roberts, Jr to serve as Chief Justice, and Samuel Alito. Roberts was only 50 and Alito only 56, so both men had long, long careers ahead of them. The Chief Justice would be a representative of the 1% for perhaps 40 years! The next battle was lost.

But then the next biggest battle began, and it began with the 2008 recession. Security remained as a phony issue, but it was replaced as the prime issue, by economics.

The banks, owned by the 1%, caused the recession, but the blame had to be pointed elsewhere, and this “elsewhere” was the federal deficit. The money-backed media pounded on the notion that the U.S. government was just like you and me. It had to live within its “means.”

Never mind that the U.S. government, being Monetarily Sovereign, has no means, simply because it has the unlimited ability to create dollars. Forget facts. The media told the 99% three things:

1. Taxes needed to be cut, because taxes hurt economic growth (true.)
and
2. Federal spending needed to be cut, because spending increases the federal deficit (also true).
and
3. Just like personal debt, federal debt is a danger, and needed to be reduced (true about personal debt, false about federal debt).

What the bought-and-paid-for media refused to acknowledge is:

1. Income tax cuts benefit the 1% far more than the 99%, many of whom pay no income tax, but are hurt most by the unnecessary FICA tax.
and
2. Federal “deficits” are nothing more than an accounting term for the dollars the federal government adds to the economy, and a growing economy requires a growing money supply.
and
3. Federal finances are not like personal finances, the opposite in fact. The federal government never can run short of dollars.

So to accomplish the “need” to reduce deficits, Congress repeatedly voted to cut government benefits for the 99% — taxes on Social Security benefits, older starting dates for benefits, increased FICA payments, cuts in Medicaid support, reduced payments to doctors, who then began to opt out of SS, and hundreds of other cuts in social programs, all under the lie of “fiscal prudence.”

Another battle lost.

The brainwashed 99% began to believe the media propaganda, and voted for Tea/Republican candidates, who as a solid voting block, prevented money supply growth and the growth of social programs.

Meanwhile, the Republican-dominated Supreme Court, decided that 1%-owned corporations should be allowed to spend unlimited sums of money to influence elections. Recently, the head of the family that owns the Chicago Cubs, considered spending the astounding sum of $10 million dollars (!) just to support a smear campaign against President Obama. When his nefarious plan came to light, he immediately denied it, but do not believe for one second, that his plan won’t be replaced by one equally sinister. He is, after all, part of the 1%.

Another battle lost.

Today, in addition to members of the 99% voting against their own interests, we now have one of America’s wealthiest men running for President. He is a man whose words have no meaning, as what he says on Mondays, Wednesdays and Fridays, bear no resemblance to what he says on the other days. He is without core values or beliefs, the perfect puppet for the 1%, as well as being part of the 1% himself.

With the 99% repeatedly voting against their own interests, the 1% controlling the media, the Supreme Court and one house of Congress (with Senate rules allowing the 1% to control the other house), the 1% finds itself firmly in control.

All that remains is for the 99% physically to battle itself. Having lost so much power, as the income gap grows amazingly, the 99% is frustrated. The people needed something, anything, to feel they have at least a modicum of control over their lives.

And here the National Rifle Association steps into the power vacuum. It’s message essentially is: “Sure, you’re poor slaves to the 1%, and probably will sicken and die for lack of health care, and go broke for lack of retirement, and meanwhile be unemployed, or if employed, wasting your precious life hours, doing something menial you hate with a boss you hate. But we can give you power. We can give you guns.“

“Pay no attention to the first half of the 2nd Amendment, ‘A well regulated militia being necessary to the security of a free state . . .’ It has no meaning. All that counts is you can own guns, all kinds of guns. You can shoot them at each other.”

And with that, the war was lost to the 99%. No longer would the 1% need to fear that gigantic majority. The people will battle and kill each other, while the 1% remain happily above the fray.

Killing each other not only helps them forget it’s the 1% that made them miserable, but the more who die, the fewer will remain to vote against the 1%.

It’s the perfect solution.

Yes, the war is lost. Incredibly, 1% of the population has defeated 99% of the population, not just with money, but by outwitting them, and convincing them to vote against themselves.

Today, if I try to explain the facts to a 99%er, so he/she can understand how the war was fought, and perhaps regain a bit of power, I likely will be greeted with anger and sarcasm. That’s how deep the brainwashing has gone.

Such is the irony of ignorance, and the brilliance of the 1%.

Congratulations.

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

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

The utter failure of the International Monetary Fund, and why it damages the world.

The (IMF) touts its mission this way: “The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”

Mostly, it has done the exact opposite. The fundamental reason is the IMF’s ignorance of Monetary Sovereignty, the basis for all modern economics.

A Monetarily Sovereign government has the power to create unlimited quantities of its own sovereign currency. It is constrained neither by taxes nor by borrowing. Federal taxes and borrowing could fall to $0, and federal spending could double or triple or grow with no limit at all – constrained only by inflation.

So while the U.S. federal government never can be “broke,” as John Boehner famously lied, nor must it live within its “means,” (it has no “means”) as so many pundits falsely claim, there is but one limit to money creation, and that limit is inflation.

Yet, contrary to popular belief, reaching that limit is extremely rare, perhaps one of the rarest events in modern economics.

The International Monetary Fund maintains a website devoted to educating the public about economics. I cannot recommend this site. The IMF lives in a world of obsolete economics, while the rest of us work within the current realities of Monetary Sovereignty.

The sole reason to visit the site is to understand the popular (false) wisdom of the day, and in this way, to understand the failure of the IMF to reach its stated goals. For example, here are excerpts from their site, regarding inflation:

What creates inflation?

Long-lasting episodes of high inflation are often the result of lax monetary policy. If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise. This relationship between the money supply and the size of the economy is called the quantity theory of money, and is one of the oldest hypotheses in economics.

Yes, this is exactly what the public believes, i.e, when the government “prints” too much money, the U.S. has inflation.

First, the government doesn’t “print” money; money has no physical existence, so it can’t be printed, touched, mailed, smelled, burned, crumpled or stored. No one on earth, ever has seen money.

Money is nothing more than an accounting notation. A dollar bill is not money. It merely is an official statement that the holder owns money.

“Print” is yet another word used incorrectly in economics (along with “debt,” “deficit,” etc.) that misleads, because its popular meaning differs from its economic meaning. In economics, “print” really means “create.”

That said, the real question is: Does “printing” or creating money cause inflation? Is inflation really, as the common expression goes, “Too much money chasing too few goods and services?”

The answer is, “Yes and no.” Yes, if the U.S. federal government immediately created (by deficit spending) $900 trillion, I suspect there would be a world-wide inflation. But barring that extreme example, there simply has been no relationship between federal deficit spending and inflation.

The inflation fears of the debt hawks have no basis in reality. While “too much money / too few goods” may sound logical, it is not historically factual. It can exist only in some hypothetical, extreme, almost never-seen situation.

The reason has to do with the new, worldwide markets. “Too few goods” seldom can exist, today. If one nation runs short of something, buyers get it from another nation. The world has changed, while IMF economics has not changed with it.

The IMF’s “educational” site also says:

How policymakers deal with inflation

The right set of anti-inflation policies, those aimed at reducing inflation, depends on the causes of inflation. If the economy has overheated, central banks—if they are committed to ensuring price stability—can implement contractionary policies that rein in aggregate demand, usually by raising interest rates.

This too is a popular belief, that high interest rates reduce demand, and it too is false. If high rates did inhibit demand, we would expect to see a correspondence between high rates and reduced Gross Domestic Product (GDP).

Yet, we see no such thing. In fact, to a slight degree, we see the opposite: High rates actually stimulate demand:

The probable reason: High rates force the federal government to pay more interest, thereby pumping more money into the economy, which is stimulative.

The Fed does raise interest rates too fight inflation, not because they reduce the demand for goods and services but because high rates increase the reward for owning money, thereby increasing the demand for money. Making money more valuable fights inflation.

The bottom line: The IMF subscribes to obsolete bits of popular wisdom about economics, which explains why it tries to solve the indebtedness of monetarily non-sovereign nations by lending them even more money, when these nations cannot service the debt they already have, then demanding that these nations cease stimulative spending and increase anti-stimulative taxing.

The IMF, having learned little about economics during the past 40 years, prescribes leeches to cure anemia, much to the detriment of the world.

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

#MONETARY SOVEREIGNTY

–How the euro zone would build an airplane

Before you read the excerpts from the following article, visualize this scenario:

The eurozone proudly builds an airplane with their own hands. They feel it’s a great achievement.

But unaccountably, they have bolted both wings to the same side of the hull. The plane won’t fly. Rather than admit they did it wrong, and move one wing to the other side of the hull, they install a gyroscope in the plane, to override the imbalance, and force it to fly.

But the gyroscope needs to be heavy — too heavy for the plane to get off the ground. So they insert a huge helium balloon in the hull to make the plane lighter. But the balloon needs to be big. It takes up so much space in the hull, there in no room for passengers. So the eurozone bolts some chairs onto the wings, but the chairs interrupt the aerodynamics.

The eurozone insists everything is O.K., but when they try to fly their plane, it wobbles so much, it almost crashes.

Insight: Greek exit could cost eurozone 100s of billions of euros
Inflation Is Coming
The World’s Financial System Is Crumbling. Here’s The Worst-Case.

Under a scenario described in German weekly Der Spiegel, the euro zone’s EFSF bailout fund could be used in the event of a Greek default to continue funding Greece’s debt obligations to the ECB.

However, this would eat into the resources of the ‘firewall’, eroding its capacity to help other euro zone states which might well need to be protected if a Greek exit sparked contagion.

An alternative scenario could see the national central banks turning to their governments to recapitalize the ECB. But going cap in hand to politicians for money they are desperately short of risks undermining the ECB’s independence.

Or, the EU, being Monetarily Sovereign, simply could pump euros into the ECB, to give to the monetarily non-sovereign euro nations.

ECB loans to Greek banks are another way the central bank is exposed but in this case, although the ECB conducts these lending operations, the funds are distributed via the national central banks and carried on their balance sheets.

A Bank of Greece financial statement showed that as of January 31 it had lent out a total of 73 billion. Berenberg Bank economist Christian Schulz said that in the event of a Greek exit these loans and most of the collateral may be converted into a new Greek currency.

“The ECB/Eurosystem would not bear the risk anymore,” he added, noting that the Bank of Greece would instead be left with the – likely devalued – loans and collateral.

Is he saying that loans to Greece, which Greece has no hope of servicing, are not a risk?

The ECB could monetize any net loss in the event of a Greek euro exit by printing money but that would come with an inflationary effect unpalatable to policymakers in Germany, the bloc’s most powerful player.

Germany still has not recovered from the trauma of the Weimar hyperinflation. Never mind that that inflation lasted only three years, could have been cured even sooner, never was repeated, and immediately preceded the greatest military buildup in history, all paid for by “printing” money — with no hyperinflation.

“If (savers in other periphery countries) see that Greek savers have seen their euro savings overnight being converted into drachma, which could depreciate by 50-70 percent, then it would be a fairly simple hedge strategy for them to take out some of their savings and put them into Luxembourg, or pounds sterling, or Swiss francs,” said Bosomworth.

First, there is nothing to say the drachma will depreciate. Second, if the drachma does depreciate, Greece’s exports will soar and tourists will flock there. Unemployment will disappear and Greece will become one of Europe’s wealthy nations.

That’s the real reason for the EU’s concern — having the world see what a failed plan the euro was.

ECB President Mario Draghi said on Wednesday that “our strong preference is that Greece will continue to stay in the euro zone”.

Translation: If the euro disappears, I, Draghi, will lose my job.

“What they can do is try to prevent contagion – where they have a very significant role – and they will probably also try to convince participants on all sides to keep Greece in the euro area,” said Citigroup economist Juergen Michels.”

Next step the eurozone takes: Attach their plane to an Atlas rocket and shoot it into the stratosphere, from where it can glide down — but the lower pressure causes the helium balloon to inflate, splitting the hull, so the gyroscope falls out, causing the plane to crash, killing all the passengers who still are sitting on the wings.

My advice to passengers: Get off that plane while you still can.

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

#MONETARY SOVEREIGNTY