Just wonderful - more defaults

Nouriel Roubini predicted the current financial meltdown a few years ago. He is someone I monitor on a reasonably regular basis as what he says is very much worth listening to. From Bloomberg:

Roubini Says Rising Sovereign Debt Leads to Defaults
Nouriel Roubini, the New York University professor who forecast the U.S. recession more than a year before it began, said sovereign debt from the U.S. to Japan and Greece will lead to higher inflation or government defaults.

Almost $1 trillion of worldwide equity value was erased April 27 on concern that debt will spur defaults, derailing the global economy, data compiled by Bloomberg show. German Chancellor Angela Merkel and the International Monetary Fund pledged to step up efforts to overcome the Greek fiscal crisis, after bonds and stocks fell across Europe in the past week.

Sovereign Debt?

�The thing I worry about is the buildup of sovereign debt,� said Roubini, a former adviser to the U.S. Treasury and IMF consultant, who in August 2006 predicted a �painful� U.S. recession that came to fruition in December 2007. If the problem isn�t addressed, he said, nations will either fail to meet obligations or see faster inflation as officials �monetize� their debts, or print money to tackle the shortfalls.

Roubini, who teaches at NYU�s Stern School of Business, told attendees at the Beverly Hilton hotel that �Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems.�

European bonds have plunged on concern that Greece�s won�t be able to pay its debt, with Harvard University Professor Martin Feldstein and Templeton Asset Management Ltd.�s Mark Mobius saying a default may be needed. The yield on the Greek two-year bond rose as high as 26 percent after being downgraded to below-investment grade by Standard & Poor�s on April 27, before falling to 17.35 percent today. The euro, which dropped to the lowest in a year yesterday, rose 0.1 percent to $1.3235 at 4:05 p.m. in New York.

The old: "we need more money - start the presses" stupidity. Down that road leads madness as we can see in Zimbabwe. The Euro experiment is an interesting one to watch. You have a group of nations tied together to one currency. If one fails, it drags the whole mass down. Not the way I would run things if I were king...