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. There is no need to speculate on what that likelihood is, I can
give you the exact number:
there is 0% chance that the US will be forced to default on the debt.
We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. 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.
Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:
“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
“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR
“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser
Read more: http://www.forbes.com/sites/johntharvey/2012/09/10/impossible-to-default/
there is 0% chance that the US will be forced to default on the debt.
We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. 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.
Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:
“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
“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR
“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser
Read more: http://www.forbes.com/sites/johntharvey/2012/09/10/impossible-to-default/
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