Morgan Stanley analyst Arnaud Mares in the firm’s London office, issued a warning that some governments will have no alternative but to default on future debt obligations.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote.
In the report, Mares described the risk of default with large, advanced economies as “extremely unlikely”, “but current yields and break-even inflation rates provide very little protection against the credible threat of financial oppression in any form it might take.”
Source: Bloomberg