Drowning in debt.

Banker, The, March, 2009 by Hart, Joanne

Byline: Joanne Hart

Sovereign debt issuance on an unprecedented scale is about to be unleashed on the markets. Major countries, such as the US, the UK and those in the eurozone, face the double whammy of reviving their economies with a fiscal stimulus as well as paying the cost of financial sector bailouts.

The result will be a world drowning in debt and there are concerns that auctions will fail as investors become overwhelmed and fearful about the state of public finances. Governments' attempts to sell their debt to their central banks - who pay for it by printing money - will only add to the worries. Could a major sovereign default or, alternatively use high inflation to pay off its debts, leaving investors holding Treasury bills in a depreciated...

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