HOT: Harvard’s Rogoff Sees ‘Bunch’ of Sovereign Defaults

Bloomberg reports:

Ballooning public debt is likely to force several countries to default and the U.S. to slash spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big U.S. banks.

Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years. I predict we will again,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo today.

He said financial markets will eventually drive bond yields higher, and European countries such as Greece and Portugal will “have a lot of troubles.”...

“It’s very, very hard to call the timing, but it will happen,” Rogoff, co-author of a history on financial calamities, said in the speech. “In rich countries -- Germany, the United States and maybe Japan -- we are going to see slow growth. They will tighten their belts when the problem hits with interest rates. They will deal with it.”...

Japan has the largest debt of all, with the Finance Ministry estimating borrowings of 973 trillion yen ($10.7 trillion) by March 2011, more than the economic output of the U.K., France and Italy combined.

Japanese fiscal policy is “out of control,” said Rogoff, 56, who is a member of the Group of Thirty, a panel of central bankers, finance officials and academics headed by former Federal Reserve chairman Paul Volcker

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