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No Chance of Default, US Can Print Money

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    No Chance of Default, US Can Print Money

    Sunday, 7 Aug 2011

    Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.

    "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press

    "What I think the S&P thing did was to hit a nerve that there's something basically bad going on, and it's hit the self-esteem of the United States, the psyche" said Greenspan

    Austan Goolsbee, the chairman of the White House's council of economic advisors, hit out at S&P on the same show, insisting the credit ratings agency had got its math wrong.

    "Well, the basic case is they made a $2 trillion math error and forgot to check their work," he said. "So rating agencies that didn't make a $2 trillion math error reaffirmed the AAA status. You saw Warren Buffet say that, if they had a AAAA, he would put U.S. Treasurys in AAAA status."

    Following the decision to downgrade America's credit rating, the head of sovereign ratings at S&P, David Beers, said the Obama administrations analysis of the move was a complete "misrepresentation."

    * Beers will join CNBC's special program on the debt crisis at 8 pm Sunday.

    Greenspan said the current sense of crisis that has unnerved investors is about the euro zone, not the US.

    'The United States was actually doing relatively well, sluggish but going forward until Italy ran into trouble," he said. "That destabilized the European system, and the crisis re-emerged. Europe is very critical to the United States in the sense not only do we have a fourth of our experts there, but more importantly, significant proportion of the foreign affiliate profits, in fact half of U.S. corporations, are in Europe."

    "When Italy showed signs of significant weakness in selling its bonds—the yield is now over 6 percent, which is an unsustainable level—it created a massive problem within Europe because Italy is a very large country, cannot be easily bailed out and, indeed, cannot be bailed out," Greenspan added.

    Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.
    Last edited by AngelinaCat; 08-08-2011, 05:09 AM. Reason: To bring it in line with the specific formatting required for this board. OP, please note.
    All information contained in this post is for informational and amusement purposes only.
    Bankruptcy is a process, not an event.......

    #2
    Haha. If the government actually tries to print their way out of this problem, then all that will occur is runaway inflation like what happened in Germany in the 1920's. And what then? Do they seriously think that people will stand blindly by when their meager income/savings can barely buy a loaf of bread and some milk, let alone pay their rent and other costs? Perhaps our elected officials need to review a little history and see what time and time again the outcome of such a scenario has been shown to be.

    P.S. if a crisis like this hits, the Feds won't have enough bullets (or manpower) to keep the unrest down. People will happily give their lives to fight the government that has let them down in so many ways!

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      #3
      I think we've seen how this story goes.






      At least he's happy that he has a lot of money.
      The essence of freedom is the proper limitation of Government

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