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So many folks doubt the Plunge Protection Team exists. At times, when two elephants are dancing, they just can't hold them and force them up. You just get out of the way and exit the dance floor. Listen to Greenspan himself:

Remarks by Chairman Alan Greenspan
"In practice, the policy choice of how much, if any, of the extreme market risk that government authorities should absorb is fraught with many complexities. Yet we central bankers make this decision every day, either explicitly or by default. Moreover, we can never know for sure whether the decisions we made were appropriate. The question is not whether our actions are seen to have been necessary in retrospect; the absence of a fire does not mean that we should not have paid for fire insurance. Rather, the question is whether, ex ante, the probability of a systemic collapse was sufficient to warrant intervention. Often, we cannot wait to see whether, in hindsight, the problem will be judged to have been an isolated event and largely benign.

Thus, governments, including central banks, have been given certain responsibilities related to their banking and financial systems that must be balanced. We have the responsibility to prevent major financial market disruptions through development and enforcement of prudent regulatory standards and, if necessary in rare circumstances, through direct intervention in market events. But we also have the responsibility to ensure that private sector institutions have the capacity to take prudent and appropriate risks, even though such risks will sometimes result in unanticipated bank losses or even bank failures."

I say, since we owe most of that money to ourself, that we forgive ourselves that debt and lower it.

Do not listen to old slogans like this. They might have bee true 50 years ago when the U.S. was the world’s CREDITOR, but we are now the world’s DEBTOR – we have hocked everything to buy that extra SUV and take those extended vacations, having borrowed the $$ from the Europe and Asia (They got the dollars hot off Greenspan’s presses to pay for all that stuff they export to us.).

So we no longer owe only to “ourselves.” … but even if that were the case, and the debts to “ourselves” were magically forgiven, then that “full faith and credit” statement has just been flushed. Now with the dollars in your pocket worthless, and your CDs valueless, and with T-bills, Notes, etc., not even worth a piece of toilet paper, tell me this: What exactly do you have that would be worth the gallon of gasoline that I have?

Tell the Japanese and Europe to dock our rebuilding them after WW2 from what it would cost today and deduct it from our debt to them.=o)

No problem! They’ll just return to us that $160 billion in worthless pieces of green paper – debt paid in full!

Being DEBTORS, Americans can no longer call all the plays in the world, and we don’t have any good options; we certainly don’t have any simple ones!