Trade War! Oh, woe is US ? Friday, Mar 10 2017 

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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I just received an Email from FT Exclusive. Here is the entire text:

White House civil war breaks out over trade

A civil war has broken out within the White House over trade, leading to what one official called “a fiery meeting” in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street.

According to more than a half-dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr Trump’s National Economic Council.

At the centre of the debate is Mr Navarro, a firebrand economist who has angered Berlin and other European allies by accusing Germany of exploiting a “grossly undervalued” euro and calling for bilateral discussions with Angela Merkel’s government over ways to reduce the US trade deficit with Europe’s most powerful economy.

The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said.

When evaluating the above, the key thing to remember is the U.S. government is Monetarily Sovereign. It creates unlimited dollars at will.

Bannon et al want the other nations to make our imports more expensive and our exports less expensive, so we can export more and import less. That leaves us with two questions:

  1. Should we want our Net Imports to be more expensive?
  2. Should we want to increase Net Exports?

Question #1 seems like a no-brainer.  Do you really want all the things you import to cost you more? Do you really want inflation?

No? Well, that’s the way to reduce imports, which is what Bannon and Trump want. (Though not even Trump knows what Trump wants, today. Tomorrow’s 4:00AM tweet could change everything.)

Which gets us to the meat of the argument, question #2. Should we want to increase Net Exports?

That is a no-brainer too, but not in the way you may think.

The fundamental effect of increased Net Exports is to increase the money supply, which on the surface would seem to be a good thing.

But remember, the U.S. government is Monetarily Sovereign. It has the unlimited ability to increase our money supply.

Congress controls the money supply by spending, which it has the unlimited ability to do. So, there is no money-supply need to increase or to decrease imports or exports.

Some may argue that increasing Net Exports by weakening the dollar helps American businesses that exportbut it hurts American businesses that import, as well as hurting consumers who will need to pay more dollars for imports.

And if our government really wants to help American business, it simply would reduce or even eliminate business taxes. Then there would be no need for silly trade conflicts like the Bannon, Cohn, Navarro, Trump ado about nothing.

Ah, but if the government reduced or eliminated business taxes, the populace first would complain about business not paying its “fair share,” as though business expenses somehow benefit the populace.

And then after the “fair share” argument ran its course, the populace might come to see that the federal government neither needs nor uses the tax dollars anyway.

Imagine the kerfuffle when government flunkies try to explain why our Monetarily Sovereign government does not need tax dollars, but has been collecting them all these years.

Here is the teapot on this tempest:

  1. A Monetarily Sovereign nation does not need to export. It can control its money supply, and can support its industries, endlessly.
  2. Importing benefits the nation. When we import we exchange dollars, which cost essentially zero to create, for goods and services which cost time, materials, and labor to create.

In effect, when a Monetarily Sovereign nation imports it gives nothing and gets something.

For instance, when we import from China, we give them dollars we create at the touch of a computer key, and they give us products and services that cost them the blood, sweat, and tears of their workforce along with their precious raw materials.

So who comes out the winner? Clearly, the importer. That so-called “grossly undervalued euro” benefits America.

Those are the simple facts of import/export for a Monetarily Sovereign nation.

Now, sit back and watch the fighting dispassionately, and shake your head in wonder at the treachery of our leaders and the ignorance of the populace.

Rodger Malcolm Mitchell
Monetary Sovereignty

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THE RULES

•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.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives 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 the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•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..

MONETARY SOVEREIGNTY

–Greece, if you do it right, you will be among the most prosperous . . . Sunday, Jul 5 2015 

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

Mitchell’s laws:
**Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
**The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
**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 poor.
**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.
**To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
**Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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Congratulations Greece, you have voted against eternal austerity and slavery to the troika.

Now, if you do it right, you will be among the most prosperous of European nations, while the rest of the euro zone either fades into depression or follows your lead.

Greeks defy Europe with overwhelming referendum ‘No’

ATHENS (Reuters) – Greeks voted overwhelmingly on Sunday to reject terms of a bailout, risking financial ruin in a show of defiance that could splinter Europe.

Financial “ruin” is what Greece has now, and what the troika proposes — endless, ongoing, unpayable debt, impoverishing the Greeks, their children and their grandchildren, forever.

But yes, it may deservedly splinter Europe, with the wise nations re-adopting their own sovereign currencies, and the rest dying the slow death of austerity.

It leaves Greece in uncharted waters: risking financial and political isolation within the euro zone and a banking collapse if creditors refuse further aid.

A Monetarily Sovereign nation need never have a “banking collapse,” so long as it doesn’t succumb to the “borrow-borrow-borrow” siren song of the troika loan sharks.

But for millions of Greeks the outcome was an angry message to creditors that Greece can longer accept repeated rounds of austerity that, in five years, had left one in four without a job. Prime Minister Alexis Tsipras has denounced the price paid for aid as “blackmail” and a national “humiliation”.

Better late than never to come to that realization.

Officials from the Greek government, which had argued that a ‘No’ vote would strengthen its hand to secure a better deal from international creditors after months of wrangling, immediately said they would try to restart talks with European partners.

Oh, no! Oh, no! You Greeks don’t need to “restart talks with European ‘partners.'” They are not partners of yours any more than a Mafia loan shark is a “partner” with his victims.

Issue your own sovereign currency. Become Monetarily Sovereign, again. Demand that your creditors accept your currency in payment, or they will receive nothing.

Pay for health care, education, food for the poor, housing for the poor, your needed goods and services — all with your own sovereign currency.

Tell your citizens to pay taxes in their own sovereign currency.

Go back to where you were before the ill-fated euro experiment in torture began.

But euro zone officials shot down any prospect of a quick resumption of talks. One official said there were no plans for an emergency meeting of euro zone finance ministers on Monday, adding the vote outcome meant the ministers “would not know what to discuss”.

Give those fools the Greek, open-handed “Nah.”

The result also delivers a hammer blow to the European Union’s grand single currency project. Intended to be permanent and unbreakable when it was created 15 years ago, the euro zone could now be on the point of losing its first member with the risk of further unraveling to come.

Yes, the money-lenders are wetting their pants from they won’t be able to keep the Greek people in debt-slavery.

Unable to borrow money on capital markets, Greece has one of the world’s highest levels of public debt. The International Monetary Fund warned last week that it would need massive debt relief and 50 billion euros in fresh funds.

For a Monetarily Sovereign nation, borrowing from foreigners is 100% unnecessary. But that is not what they want you to believe. They want you to think you need their loans.

But, exhausted and angry after five years of cuts, falling living standards and rising taxes imposed under successive bailout programs, many appear to have shrugged off the warnings of disaster, trusting that a deal can still be reached.

The only “deal” Greece needs is a return to Monetary Sovereignty. It will require strong, smart leadership. I can suggest a couple people who could help Greece with that.

Much good luck.

Stay strong and you’ll be strong.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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
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 add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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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

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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

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.

#MONETARYSOVEREIGNTY

–My predictions for Japan and for the U.S. economists Monday, Mar 14 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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My predictions:
To cope with its tsunami problems, the Japanese government will be forced into massive spending. This will increase Japan’s debt/GDP ratio from its current 200%. That ratio could reach 300%, 400%, 1,000% — who knows how high.

The results will be:

–On-line “debt clocks” madly will tick ominous warnings.
–John Boehner and the Tea Party, who have no understanding of Monetary Sovereignty, will tell everyone Japan is “broke,” just as they have been telling everyone the U.S. is “broke.”
–If Japan does not have a debt ceiling, some in their government will insist they institute one, to prove they know as little about economics as U.S. politicians.
–The Japanese economy will recover.
–Sometime in the very distant future, Paul Krugman, Charles Krauthammer, Barry Rithholtz, Robert Samuelson, Stephen Gandel, Joseph Stiglitz and the editors of the Wall Street Journal will proclaim they always knew federal deficit spending was necessary for a growing economy, and that, in 2011, the so-called “debt” really was not too high.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

Are there good deficits and bad deficits? Friday, Mar 4 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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While Congress struggles with plans to cut federal deficits (i.e. cut federal money creation), and simultaneously tries to encourage banks to lend (i.e increase private money creation), it might be instructive to see why this is exactly the wrong approach. Please go to a post I wrote last June (since updated), titled, Is federal money better than other money?

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

No nation can tax itself into prosperity, nor grow without money growth.

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