8/10/2011

"Greenspan - US Can Pay Any Debt It Has Because We Can Always Print Money"



"The US can pay any debt it has because we can always print money." This sound like something a third world country would do. Who is going to want to invest in US bonds if they risk the government destroying the value of those bonds through inflation? What does this talk by itself do to the risk of hold US bonds?

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3 Comments:

Blogger Al B. said...

Gee, wasn't that the whole point of the S&P downgrade -- not that there was any risk that we wouldn't pay back our debt, but that the risk that our debt would be paid back with inflated dollars as increased substantially?

8/10/2011 3:40 AM  
Blogger Chas said...

Just print money? Greenspan knows exactly what an irresponsible thing that is to say. Apparently, even Greenspan is resigned to the hopelessness of the situation.

8/10/2011 8:38 AM  
Blogger Mark said...

Yes, and the market seems even more concerned about US debt being repaid with inflated currency after the S&P downgrade, right? That's why before the downgrade, yields on Treasuries from 2 years to 30 years were all significantly higher than they are at this moment, right? And lower yields mean lower Treasury prices. Wait! I got that backwards: LOWER yields mean HIGHER prices. So then, the market currently does NOT seem to be reflecting new concern over US creditworthiness. Confusing!

8/10/2011 12:20 PM  

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