When an individual cannot pay their debt; then they stand to lose their possessions. When a country cannot pay back their debt they are put in a similar situation.
According to Ken Rogoff, a former chief economist at the International Monetary Fund some countries will experience sovereign debt defaults.
A sovereign bond is a bond issued by a national government. These are then sold to create more money for an economy but they are redeemable so if an individual or company wants to cash in on the bond and the country cannot afford to pay it back then this is a sovereign debt default.
After a banking crisis we usually see a bunch of sovereign defaults, say in a few years. I predict we will again, stated Mr Rogoff. This is one of the greatest risks to a global economy. Greece and Portugal will “have a lot of troubles,” according to Rogoff.
Rogoff predicts that the richer countries will see slow growth but they will be more cautious with their spending and should be able to deal with the troubles ahead.
Related posts:
- How Monitored Savings Accounts Make Debt Settlement Possible
- The Impact of Bad Debt on a Company
- Get Me Out Of Debt!- Surefire Tactics For Debt Elimination
- Recovering Bad Debt
- How to Legally Negotiate and Eliminate 60% of Your Unsecured Debt – Personal Finance Tips
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[...] Some countries may have to default on their debt. « Business … [...]
When the US Supreme (idiot) Court overturned campaign finance laws which will allow corporations and foreign governments to essentially buy US elections, I decided it’s time for me to give up on voting, except at my local level. I’m done. What’s the point now?