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Home Publications Blogs Beat the Press Washington Post: Greek Default Could Lead to Lower Interest Rates in the United States

Washington Post: Greek Default Could Lead to Lower Interest Rates in the United States

Saturday, 24 April 2010 05:51

Actually, that is not what the Post said about the implications of Greece defaulting on its debt. A front page story told readers:

"A default in Greece could also ripple across the Atlantic, hitting banks and pension funds holding Greek bonds and heightening investor worries about the national debt of the United States"

Yes, it "could" have this effect, just like it could lead to a run on calamari and lamb as people read about Greece in the newspapers and get the urge to eat calamri and lamb. But, that is not likely to happen. To date, as has been reported in the Post and elsewhere, the prospect of a default by Greece has been associated with the opposite reaction: a flight to the dollar as a safe haven, which has meant lower interest rates.

It is of course the Post's editorial to promote concerns about the U.S. debt and deficit. Most newspapers try to keep a separation between their news pages and their editorial pages.

Comments (2)Add Comment
written by John, April 24, 2010 8:41
Omigod! WaPo warns of a run on figs and olives, resulting in disasterous price increases.

How will I survive?
written by izzatzo, April 24, 2010 9:15
According to Larry Kudlow
The recovery will be V-shaped
So strap yourselves in
For lots of G-forces

A steep takeoff
Will throw your head back
And Greece will seem
Like a dot on a map

Of otherwise bullish
Growth and investment
Lamb and calamari
Served in first class

Make reservations now
For flights of fantasy
All aboard for Greeceland
Departing from US

Stupid liberals

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.