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.
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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

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

#MONETARY SOVEREIGNTY

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.
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A reader directed me to the following site: http://neweconomicperspectives.org/2012/05/playing-monopolis-monopoly-an-inquiry-into-why-we-are-making-ourselves-so-miserable.html

Somehow, through the magic of the Internet, I lost the reader’s comment, but the site he sent me to is so outstanding I ask that everyone read it.

Reader, whoever you are, please accept my apologies and send me another comment, so I can thank you by name.

Oops, just found it. You can to, in the comment section of the previous post.

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

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.
==========================================================================================================================================

I continue to be amazed by the Chicago Tribune. Its reporters do some great investigative journalism, possibly the best in the nation. They dig for months into secret files, and bring together data that has been hidden from the public, exposing criminality by public a private officials.

But its editors are completely clueless about data that stares them in the face –even information directly handed to them. Reporters, great. Editors, clueless.

Here are excerpt’s from the latest nonsense editorial.

Is Europe catching?
Hope that the eurozone can survive a Greek collapse

Why would anyone wish the eurozone to survive. It already has shown to be a failed model. Forcing nations to surrender the single most valuable asset they own — their Monetary Sovereignty — is, and has been, the basis for disaster. It’s a disaster I predicted six years ago.

Europe is coming to Chicago in the next few days and the great temptation is to set up a quarantine room at O’Hare International Airport. Our visitors have a bad case of the financial flu. We can only hope it’s not catching.

The euro nations, not being inoculated with Monetary Sovereignty, do not have the ability to fight off recession. Fortunately, the U.S. has that ability (though our politicians don’t understand it), so we can create the dollars necessary to grow our economy.

Greece could collapse in a matter of weeks when its banking system runs out of funds. The tiny Aegean nation’s economic illness could spread to the sickly and much larger economies of Italy and Spain.

That would be disastrous for Europeans and a serious problem for Americans. U.S. economic growth depends on the success of the 27-nation European Union, which, taken together, is America’s biggest trading partner. Eleven of those 27 countries have slipped back into recession.

Exactly! Not being Monetarily Sovereign, these nations cannot create euros. So they cannot prevent their banking system from running out of funds. Eventually, all euro nations will collapse, even Germany.

Here’s a quote from CBS Moneywatch:

U.S. Treasury Secretary Timothy Geithner applauded the softer tone emerging among European leaders. “You are seeing them talk about a better balance between growth and austerity, meaning a somewhat more gradual, softer path toward restoring fiscal sustainability,” Geithner said. The shift shows that European leaders recognize that countries can’t increase their economic growth if they’re forced to focus solely on cutting spending and reducing debts. Geithner said European countries would benefit from investment in public works projects, like roads and schools.

Sadly, Geithner still doesn’t understand the difference between Monetary Sovereignty and monetary non-sovereignty, so he thinks austerity is the same as “fiscal sustainability.” But at least he is does understand a nation cannot recover from a recession but cutting deficit spending (Hello, Tea/Republicans and Democrats, alike).

Back to the Tribune editorial:

Many of them would like to stimulate their way out of recession with government spending. But practically every nation in Europe’s southern tier has piled up way too much debt and cannot afford to keep borrowing. Germany, the strongest economy, has rightly forced austerity measures on its free-spending neighbors as a condition of bailouts.

Change one word and the above paragraph will be accurate. Change “rightly” to “stupidly.” It’s amazing. These people think they can cure starvation by cutting calories.

Greece agreed to slash public spending, rewrite rigid labor rules that throttle its private sector and pay off part of its debt over time. In exchange, its banks got a cash infusion and its creditors agreed to write off more than half its debt.

In the wake of the deal, though, unemployment has gotten worse and money has become more scarce. The Greek economy has shrunk for five consecutive years, with no end in sight.

What a surprise. After they cut spending, unemployment got worse and the economy shrunk. Who could have imagined that?

If a new government rejects austerity and renounces its debt, Greece probably will be forced out of the eurozone, the common currency union.

Long term, this would be the best thing that could happen to Greece and its citizens.

Greece would have to print its own currency, which would be extraordinarily weak because it wouldn’t be backed by wealthier European nations.

So with that “weak” currency, Greek exports would soar, and within two years, Greece would wealthier than any of the euro nations.

With time to prepare, systemic risk has been reduced. Governments have made contingency plans and banks have limited their exposure. Financial firewalls are in place to keep a Greek collapse from spreading to Italy, Spain and other vulnerable countries like Portugal and Ireland.

That’s a shame. But despair not. If they stay with the euro, their economies will collapse, too.

Europe really has no choice but to work off its huge debt over time, though that will hamper economic growth. Its monetary union may wind up losing one or more members. It faces years of slow growth or no growth … or worse.

There are two better choices than applying leeches to cure anemia:

1. Form a republic — a quasi United States of Europe — with the EU supplying its member nations with euros, as needed
or
2. Each euro nation re-adopting its own sovereign currency.

That’s it. There are no other solutions. The so-called “bailouts” merely were loans to countries that cannot service their current debt, let alone trying to service additional debt. This is exactly what the American banks did when giving mortgages to people who couldn’t afford them.

It’s what caused the U.S. recession, which is being ameliorated by federal stimulus spending.

Stimulus today; stimulus tomorrow; austerity never. My question: Why is this so hard to understand?

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

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.
==========================================================================================================================================

Let’s predict.

Unfortunately, to predict, we tend to use today as a starting place, then visualize a linear transition to the future. So, our predictions generally include more powerful computers, better medicine, more efficient rockets – in short, more/better versions of today. A hundred 100 years ago, who could have predicted the Internet, a seemingly non-linear transition from 1900?

So, given that caveat . . .

Those of you who are Star Trek fans – the Captain Picard version – will remember the Borg. They were an alien people, part humanoid and part machine, the defining characteristic of whom was a “hive mind,” i.e. all knowledge and decisions linked by radio. Individuals were not individual, but were part of the collective, perhaps less independent even than ants and bees.

My prediction is that one day, possibly within the lifetimes of my grandchildren, we all will be well on our way toward becoming cyborgs, and this will have a profound effect on economics.

.
—-CAPTAIN PICARD IS FORCED TO JOIN THE BORG COLLECTIVE

An article in NewScientist Magazine hints at this:

Beyond Kinect: Gestural computer spells keyboard death
15 May 2012 by Jim Giles

The advent of multi-touch screens and novel gaming interfaces means the days of the traditional mouse and keyboard are well and truly numbered. With Humantenna and SoundWave, you won’t even have to touch a computer to control it, gesturing in its direction will be enough.

(A technology called) Humantenna uses the human body as an antenna to pick up the electromagnetic fields – generated by power lines and electrical appliances – that fill indoor and outdoor spaces. Users wear a device that measures the signals picked up by the body and transmits them wirelessly to a computer. “It’s just an electrode that measures voltage, digitises it and sends the signal for processing,” says Desney Tan of Microsoft Research in Redmond, Washington.

By studying how the signal changes as users move through the electromagnetic fields, the team was able to identify gestures, such as a punching motion or swipe of the hand. In all, the researchers found that the technology could detect 12 gestures with over 90 per cent accuracy.

One version of the system, presented this week at the Conference on Human Factors in Computing Systems in Austin, Texas, runs off a sensor that sits in a small bag. With training, that sensor can learn to recognise specific gestures. Another paper, under review, describes a version that relies on a much smaller wristwatch-sized sensor. Thanks to advances in processing techniques, this newer system needs no training to recognise the same 12 gestures.

Our brain causes our hand to gesture. A computer senses and decodes our gesture, and makes something happen. But what if instead of decoding our gesture, the computer were able to decode our brain’s signal. Our thoughts alone could make something happen. Such technology already exists.

Monkey think, monkey do with robotic arm
By David Templeton / Pittsburgh Post-Gazette

Making things happen with the mind has long been a favorite topic of science fiction. But with new technology developed at the University of Pittsburgh School of Medicine, a rhesus monkey, with arms comfortably restrained, learned to use a robotic arm to feed itself by thinking about the action.

The monkey used the arm to grasp marshmallows and fruit and put them in its mouth. It even used the grasper, as it would its own hand, to prevent the food from falling from its lips. In a 2004 study, Pitt researchers taught a monkey partially to use a robotic arm, but in the latest research published in the journal Nature they taught the monkey to control the arm fully with its mind.

Back to the NewScientist article:

All sorts of applications would open up if Humantenna can be commercialised. The body could become a kind of universal remote control, and basic gestures such as pointing or swiping might be used to control lights, appliances and computers in the home. Fitness monitoring is another possibility, says Tan. We already have devices that can infer how hard a person is exercising by tracking step patterns, but Humantenna could provide a more holistic measure by monitoring whole body movements.

Imagine switching a phone to silent mode just by pressing a finger to your lips. This is one possible application of Touché, a system that turns any object, including the human body, into a touch interface.

Researchers at Disney Research in Pittsburgh, Pennsylvania, built Touché by sending a small current through everyday objects. A person touching the object changes the flow of electricity depending on the type of touch, be it a finger or a firm grasp.

The system can also send low levels of current through the human body. The current changes when users clasp their hands or touch their faces. The signal generated could one day be used to control a phone or other electronic device.

I don’t know how far and how fast this will go, but clearly the merger of machine and human — the cyborg — is ahead of us. Biology is frail. Machines can be stronger, faster, more accurate and with better sensors — superior in every way to our human body. Consider this article:

Self-Repairing And Self-Sustaining Autonomous Machines
The George Washington University

Machines are subject to wear due to friction between moving parts. Researchers at the George Washington University have developed a real-time sensor and nanotechnology-based system that detects the component surface damage in moving parts, such as gears, and repairs and sustains the moving parts of the machines automatically.

Our future cyborg body not only will be stronger, faster, more accurate and with better sensors, but will be self repairing. We could live forever. And this unstoppable train is bearing down on us, faster and faster. Our grandchildren or great grandchildren will see it happen.

What will be the economics of a “Borgworld”?

Some things will become less important than they are, today. The traditional “big three” — food, clothing and shelter — surely will become far less important. Visualize you, as a borg, standing outdoors. You don’t care about the elements. You use power only to heat or cool your brain, and any other human body parts that remain. Compare that minimal energy use with heating and cooling all the air in all the rooms in your house.

Two-dimensional, human-controlled, surface transportation will give way to three dimensional, computer controlled, air transportation. With dramatic decreases in agriculture (for food, clothing and housing), more efficient transportation (i.e. no traffic jams), and less need to heat and cool homes, much less energy will be used.

Our need for oil, coal, natural gas and certain ores used for shelter-building, will fall dramatically. The resultant reduction in pollution will reverse the trend toward global warming. Farm land will return to nature; trees will convert carbon dioxide to oxygen.

The incidence of disease will decline. Sports will change. Religion will change. Our need for creature comfort will decrease, since “comfort” merely is our brain’s translation of sensory input. Given the appropriate programming, our brains could translate a bed of spikes into “comfort.”

Computers will create any product, just by following your thoughts. Product lack and envy will become less important in the demand equation, so crime will decrease. Economics, being greatly dependent on human desire, will reflect the new reality. Or it may disappear as a science.

With our reduced need for food, shelter, clothing, along with less crime and envy, our need for money and for security will decline. And because the primary purposes of governments are to provide food, shelter, clothing, security and money, our desire for government will decline. A benign form of anarchy-in-unity will emerge — one language, one source of information, one “human nature.”

All human knowledge will be available to everyone, instantly. We won’t have to look for information on the Internet; we will live the Internet. Of course, we don’t have the mental capacity to assimilate all that is on the Internet, so in the final conversion, our brains too, will be replaced.

Homo sapiens will have been a transition species. And at last, immune to aging, radiation and boredom, we will be ready to fly to the stars.

I truly believe, that with the ever-increasing rate of technological advancement, it all will be accomplished well before the end of this century.

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