No Chance of Default, US Can Print Money: Greenspan

CNBC ^ | Sunday, 7 Aug 2011 | 3:15 PM ET | Patrick Allen

[Tulsa Ramjet]

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

[hecht]

I think Andrea Mitchell got to him

[evets]

[PGR88]

And also print up a few of these. Point is - currency devaluation happens often and eventually, everywhere. How many have we seen in our lifetimes?

[11th Commandment]

Greenspan is technically correct, but he should be smarter than this and explain what is going on. When Moody's downgrades as US state or a Eurozone member, they are looking a default risk because these sovereigns can not print money. Moody's knows this... As such, Moody's did not downgrade the US short term debt, only long-term. This indicates to me that Moody's downgraded the debt not based on default, but technical value on the bonds. In other words if the Federal Reserve keeps printing money to monetize the deficit, then value of the bonds decline. The longer the term of the bond, the more inflation devalues the bond. Moody's rating is a function of inflation and devaluation of the bond.

I am sure Greenspan knows this, he is just playing lapdog to the elitist that think they know better than all us commoners.

[ChocChipCookie]

AND, our creditors will notice they’re being paid with Monopoly money. What a moron.

[runninglips]

The only question I have is, how will mortgage debt be handled. When you can easily satisfy the conditions of the loan, what happens to the mortgage holder?

[imskylark]

He will blame the Tea Party and say we need to spend more to create ‘shovel-ready’ jobs.

[onedoug]

What´s the House say about this loon?

[Constitutionalist Conservative]

The United States can pay any debt it has because we can always print money to do that.

If that is true, why don't we just print $15 trillion and be done with it? Anyone? Anyone? Bueller?

[ZULU]

“The United States can pay any debt it has because we can always print money to do that”

Brilliant!!!!

WHAT A GENUIS!!!!

I think he’s senile.

[mandaladon]

....................Our new currency

[mandaladon]

[OB1kNOb]

The United States can pay any debt it has because we can always print money to do that.

"But, honey, how can we be broke? I still have lots of checks....."

[bgill]

Cool, so can I print up a few million, too?

[CORedneck]

Same here LOL ! Of course I would immediately convert to something better like Swiss Franc’s and quit working. I would go live in NZ part time as well.

> Print me a 10 million could ya? C’mon Alan...

[Norseman]

>>The only question I have is, how will mortgage debt be handled. When you can easily satisfy the conditions of the loan, what happens to the mortgage holder?<<

In a hyperinflation, the lenders end up with nothing in the end. It’s the borrowers who win, i.e., the profligate, i.e., the federal government.

Buy Treasury Bonds at 4% for 30 years and see who wins, you or the government. Greenspan’s right; they won’t default, but a $1,000 bond due in 2041 will buy you a pair of shoes in 2041 at 12% inflation. At 20%, a Happy Meal at McDonalds. At 50%, use it for toilet paper, because it will be the cheaper alternative.

[RatRipper]

Greenspan Interpreted:

We can steal it from the citizens by instigating hyper-inflation.

[juno67]

I remember when this man was viewed almost unanimously as a financial genius of the first order. Even Bush’s tax cuts had to have his blessing, to provide poltical cover in case they led to big deficits. Poor Greenspan, his time is past.

[TexasRepublic]

If I print funny money, it is called counterfeiting, but when the government prints funny money, it is called Quantitative Easing. The government has nearly carte blanche to print dollars until they are as worthless as Zimbabwe’s bank notes.

[Mrs. Don-o]

It's not even going to be worth stooping over to pick up the bills.

Of course,as a gardener, I can always use the compost.