Former IMF chief says sovereign defaults will happen
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Former International Monetary Fund chief economist Kenneth Rogoff says numerous nations will default on their debts in the coming years.
According to Bloomberg, Rogoff told delegates at a forum in Tokyo today that financial markets will continue to drive up bond yields meaning indebted European nations such as Greece and Portugal will “have a lot of troubles”.
Rogoff, who is now a Harvard professor, said: “We usually see a bunch of sovereign defaults following bank crises, say in a few years. I predict we will again. It’s very very hard to call the timing but it will happen.”
Rogoff says richer nations such as the USA and Germany will be able to service their debts but will be hampered by slow growth: “They will tighten their belts when the problem hits with interest rates. They will deal with it.”
In August 2008, Rogoff was quoted as saying that “major” US investment banks were set to collapse, weeks before the demise of Bear Stearns and Lehman Brothers.
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