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

Print
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.