The Washington Post today lays out one of the biggest dice-rolls of our times:
A massive wave of borrowing will start cresting this year when the U.S. and European governments sell an estimated $4 trillion in new bonds. The surge will course through the world financial system for several years as countries, corporations and banks borrow record amounts of money to repair the damage from the financial crisis and pay back loans from the boom that preceded it.
One crucial concern about the nascent economic recovery is whether markets can smoothly absorb that new debt, or whether it will force less-creditworthy governments into a Greek-style crisis, push weaker banks and corporations into default, and possibly trigger another downturn.
Analysts are split on the prospects. Large amounts of cash around the world and the expectation of continued low interest rates have some predicting a trouble-free outcome, while the sheer level of debt involved has others spooked about a destructive competition for credit. But that wall of debt has become a source of concern among economists at the International Monetary Fund and others who are trying to anticipate where the next crisis might arise.