Granted, because I am in the Austrian camp, I don't know anything about economics and money, but I still think my question should be asked: Is not the very act of paying a debt using newly-printed money in itself an act of default? Or, maybe I should be asking a more pertinent question: What has Greenspan been smoking?
Of course, Greenspan is absolutely right. We'll never default, because of our printing presses. Just don't breathe a sigh of relief. The printing press destroys the value of your money.
- CNBC -
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.