Printing money

[Russ]

Greenspan said despite the S&P downgrade, U.S. Treasury bonds, unlike Italian bonds, were still a safe investment. "This is not an issue of credit rating. The United States can pay any debt it has because it can always print money to do that. There's zero probability of default," he said. "What I think the S&P (downgrade) did was to hit a nerve. ... It's hit the self-esteem of the United States, the psyche. And it's having a much profounder effect than I conceived could happen." Can someone please explain to me in simple terms why the U.S.A can print more money and Italy and other countries can't?I know that some other countries like Zimbabwe can print their own money.

[SimonPB]

Italy can't print money coz that controlled by the ECB .. An sure the US can print till the cows come home, but as you said - check out those Zim cows .. best way to reduce debt is to print or inflate, printing will ultimately lead to inflation ..

[BoburUncle]

But won't inflation be good for the USA?

[SimonPB]

yes, unless it becomes run away inflation ..

[BoburUncle]

Ah, catch 22

[SimonPB]

when Greenspan dropped rates aggressivelyin Jan 2008 he said it was maket melt down or inflation and he choose inflation .. well we haven't seen it yet, but it remains a risk ..

[grommet]

poor trees

[SimonPB]

lol .. when Greece fired their finance minster they made him minister of the enviroment .. so yes indeed, tough to be a tree these days ..

[Wizard]

Inflation will come. With a lack of growth we will call it Stagflation. Then we will see some serious Gold action. All this printing is creating the impetus for the next Bull run from 2017 or so.

[#10]

Money supply is only 1 of the 3 factors affecting price (& inflation). Fisher equation is MV=PQ. So P (price) = MV/Q - i.e. money supply * number of purchases divided by volume of goods produced. If you print more dollars, but produce more, then they cancel out. If you print more dollars, but spend less, they cancel out. If you print more, and consumers buy more, and producers produce less, then you have a serious problem. Classic economists tend to keep V constant, but in a consumer led recession, spending, in theory drops. Conclusion - impossible to tell if printing money will drive inflation - because it is the only factor in the equation that can be accurately predicted. The rest, who knows what the reaction will be.

[#11]

The US has been printing like nuts since the crash... they stopped releasing there money supply a few months before the crash happened, so my conspirracy theory is that they knew it was coming...

[#12]

Greenspam....nuff said.###Basically,the USA have declared Financial World War 3 with their intentions to print-when-necessary.The Chinese are going to show them an interesting time.The Russians are seeing Deficit pressure due to the new wave of S&P downgrades.Yup, this stuff is going to ripple right through the rate-sensitive ranks from Private-Corporate-Govt...and since the Fascist USA is the Big Gorilla,They WILL sit where they want to.Fin World War 3 leads to actual WW3.And that is the point of the whole exercise.Plenty of money in war.Anyway,let's watch the dominoes fall and experience the new Fad of "Flash-Mobs" as demo'd in England.Soon, we shall have our own version,"Ama Eish!-Quick"...I'm SHORT Rainbows' as at.