|
Post by mdub on Aug 25, 2011 21:52:55 GMT -6
According to Alan, we will never have to worry about defaulting or having a bad credit rating because we can always print money. Of course, most peoples' standard of living will decline as a result of inflation. According to his logic, any country with a printing press should have a AAA credit rating.
I am actually amazed he said this.
|
|
|
Post by unlawflcombatnt on Aug 25, 2011 22:50:43 GMT -6
I think Greedspan is technically right.
But printing money to avoid default is a disaster for the American people as a whole, and definitely a disaster for everyone except the top income earners.
Everyone except the super-rich DOES have to worry about the inflation (or non-deflation) that occurs when the Fed prints money.
It's often overlooked that deflation is beneficial to those on fixed incomes, as well as those whose wages aren't rising.
Printing money props up the price of overvalued assets--sustaining a "wealth effect." But the benefits of that wealth effect are only beneficial to rich asset holders. Most Americans experience a decreased wealth effect because of the decreased buying power of their current wages.
Though Greedspan may be technically correct, he's VERY wrong if he's suggesting that money-printing is how we should reduce our debt.
|
|
|
Post by jacquelope on Aug 26, 2011 11:11:40 GMT -6
According to Alan, we will never have to worry about defaulting or having a bad credit rating because we can always print money. Of course, most peoples' standard of living will decline as a result of inflation. According to his logic, any country with a printing press should have a AAA credit rating. I am actually amazed he said this. China should be more afraid than us. Their imports will become too expensive to purchase, and all the way down that road we become exporters to THEM. Pity we have to go through the intervening horrors of high inflation to get to Americans building iPads for the world.
|
|
|
Post by graybeard on Aug 26, 2011 12:54:04 GMT -6
We don't have to devalue and steal from every lower/middle class person. All we need are 100% tariffs on non-raw material imports, and 100% inspections - paid by the importers.
The Commies can sell their stuff to their own middle class.
|
|
|
Post by mdub on Aug 29, 2011 1:52:51 GMT -6
I was surpised he said this publicly because it doesn't give the countries that hold our debt much confidence. Great or good credit ratings are supposed to be for countries that don't resort to inflation to pay off debt. US debt should be rated junk - FFF. The only reason interest rates are low is that the Fed is buying most of it.
GB, I think you are right. As long as China maintains it's currency peg, their exports will be cheap for us, but at some point they will have to remove it due to runaway inflation in their country. At that point, imports will become more expensive for us, and prices will go down in China. Then, production will come back, assuming they won't find another cheap country to produce in.
|
|
|
Post by unlawflcombatnt on Aug 29, 2011 11:44:44 GMT -6
We don't have to devalue and steal from every lower/middle class person. All we need are 100% tariffs on non-raw material imports, and 100% inspections - paid by the importers. The Commies can sell their stuff to their own middle class. Graybeard, I'm with you 100%. (or maybe even "200%")
|
|