BE PREPARED: GOVERNMENT DEBT DEFAULTS VS. INFLATIONTuesday, July 27th, 2010
A borrower or lender shall I be? Borrowers of fixed-rate debt win when inflation is high, while their lenders lose—even if the debts are paid off.
High levels of public debt are associated with higher rates of inflation and poor economic growth. Indebtedness of developed-world governments has soared to levels unseen since the end of World War Two. If fiscal deficits in several countries continue unchecked there's also the danger that bondholders might take fright, driving up interest and inflation rates. According to this scenario, Greece is the harbinger of a sovereign debt crisis that threatens to engulf several leading economies.
Stunted economic growth is also likely to dampen corporate revenue and earnings growth, which has negative implications for business opportunities and stocks.
Join the Wharton Club of Northern California in a conference call with Edward Chancellor, a member the asset allocation team at respected asset manager GMO and author of
Devil Take the Hindmost: A History of Financial Speculation. Mr. Chancellor will share his views on these questions:
- Under what conditions do governments opt for inflation rather than default?
- Why have governments defaulted on their debts in the past? And when have deeply indebted countries continued servicing their loans?
- Is Greece the first domino in a wave of sovereign debt crises about to deluge the developed world?
With these insights you can make more informed decisions about taking out a mortgage, fixed- versus adjustable-rate mortgages, investing in bonds and equities and where your company should be making investments…and perhaps contracting.
Register Online
Date: Tuesday, July 27, 2010
Time: Noon - 1:00 p.m. Pacific Time
Location: Via Conference Call (Dial-in and pass code to be provided the day before the event by e-mail.)
Cost: No charge for current Wharton Club of Northern California members; members-only for this event. Registration closes Monday, July 26th at 8:00pm PDT. (Note: although there is no event registration fee for Wharton Club members, "seating" will be limited at this event--please register only if you are confident you'll be able to attend.)
Edward ChancellorMr. Chancellor is a member the asset allocation team at GMO, a respected asset manager that offers institutionally oriented strategies. GMO invests in equities and fixed income in the U.S., developed international and emerging markets. Mr. Chancellor currently focuses on capital market research.
Mr. Chancellor has also worked as a financial commentator and consultant and has written for the Wall Street Journal, New York Times, The Economist, Financial Times, and Institutional Investor, among others. He is the recipient of the 2007 George Polk Award for financial journalism. Mr. Chancellor is the author of several books including Crunch Time for Credit (2005) and Devil Take the Hindmost: A History of Financial Speculation (1999), a New York Times Notable Book of the Year. Prior to joining GMO, he worked as deputy U.S. editor for Breakingviews.com in New York and for Lazard Brothers. Mr. Chancellor earned his B.A. in History from Trinity College and his Masters of Philosophy in Modern History from Oxford University.
