By John T. Harvey – With so many economic, political, and social problems facing us today, there is little point in focusing attention on something that is not one. The false fear of which I speak is the chance of US debt default.
The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.
“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.” Alan Greenspan
Mind you, that doesn’t mean there might not be other economic or political consequences. more> http://tinyurl.com/9sdxbfd
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- When is a Debt Default not a “Credit Event?” (ritholtz.com)
- Which Country Goes Bankrupt Next? (Hint: It’s Not Who You Think) (dailyfinance.com)
