PIMCO: The US Falls Into the Sovereign Debt Ring of Fire

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In the latest
PIMCO
investor letter
, Bill Gross brings up a chart he likes to call
"The Ring of Fire."

As you can
see, this chart/graph details the amount of debt a country has in
relation to their GDP.

Countries in
the fire zone are headed for hell in a handbasket. PIMCO predicts
these countries, which include
the U.S.
, will increase
public debt
to greater than 90% over the next few years, which
will in turn stall growth.

PIMCO: The
most vulnerable countries in 2010 are shown in PIMCO’s chart "The
Ring of Fire." These red zone countries are ones with the
potential for public debt to exceed 90% of GDP within a few years’
time, which would slow GDP by 1% or more. The yellow and green
areas are considered to be the most conservative and potentially
most solvent, with the potential for higher growth.

Don’t miss:
The
world’s 10 biggest sovereign risks

This is
reprinted from Business
Insider
.

February
24, 2010

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