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Sovereign Debt Crisis Coming to U.S.

Release Date: 
Wednesday, October 13, 2010

Sovereign Debt Crisis Coming to U.S.

Oct. 13, 2010

The sovereign debt crisis consuming Europe will drift to Japan then gravitate to the United States, according to a British historian and renowned Harvard University professor.

"There are more to come and, ultimately, it is going to come to Japan and the United States," warned Harvard University professor Niall Ferguson while speaking with CNBC on Wednesday. "And those crises of sovereign debt will be the big story."

Inflation or default ultimately will result from public debt bursting, he said. Borrowing in one's own currency will lead to inflation and in another currency will lead to default.

Extra liquidity from the Federal Reserve issuing quantitative easing probably will not do much to remedy the economic situation, he said.

"All that liquidity ends up not where it is supposed to be, which is magically creating jobs for American workers in Michigan," he said. "It doesn't do that at all. It ends up pumping up commodity prices on the other side of the world, with lots of unforeseen consequences."

Both inflation and a falling U.S. dollar are generally positive for gold prices.

This news article is independently provided by Brafton and does not represent the views or opinions of Goldline International, Inc. Although the information in this news alert has been obtained from sources believed to be reliable, Goldline does not guarĀ­antee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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