Lu,
That sums it up nicely but the aircraft doesnt "always" know where it isn't! Don't forget that sometimes the aircraft is powered down. The inertial system then only knows where it calculated that it wasn't at the time it was shut down, if you fool it by moving it from where it knew it wasn't to somewhere else where it wasn't while it is powered down, then the system is confused when it is powered up again. It can easily work out how far North or South it isn't without human intervention, by calculating the rotational rate of the earth, this being its own rotational rate providing it isn't still moving from where it wasn't to somewhere else where it wasn't at the time it is powered back up again. In the latter case it is impossible for the system to calculate where it isn't, wasn't or won't be in the future and it is then in danger of gyroscopic topple or meltdown (depending on the age of the system or technology in use.) Fortunately a human being is usually on hand to assist it with working out how far East or West it didn't move while it wasn't turned on, which is the reason why both Navigational Instrument System Technicians and Flying Machine Operators have to study the subject.
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Through difficulties to the cinema