Europe's sovereign debt crisis isn't over and will continue to spread, first to Japan and then to the U.S., warned renowned Harvard University professor, Niall Ferguson.
"There are more of those (sovereign debt crises) to come and, ultimately, it is going to come to Japan and the United States. And those crises of sovereign debt will be the big story," he told CNBC Wednesday.
The explosion of public debt will inevitably lead to either inflation or default, Ferguson added.
"It just depends on whether you borrow in your own currency in which case is probably going to be inflation; or someone else's, in which case is probably a default."
The British historian says further quantitative easing from the U.S. Federal Reserve will not help the economy, as the extra liquidity is unlikely to stay within the country.
"All that liquidity ends up not where it is supposed to be, which is magically creating jobs for American workers in Michigan. It doesn't do that at all. It ends up pumping up commodity prices on the other side of the world, with lots of unforeseen consequences," Ferguson cautioned.
U.S. shouldn't be blaming China for its yuan policy, said Ferguson, as America seems to also be benefiting from Beijing's weak currency.
"As the dollar weakens and the (yuan) remains more or less pegged to the dollar — it's what I call 'ChinAmerica' in action — China plus America are pursuing a policy that is actually beneficial to both… but leaves other countries… in really quite a tight spot," he said.
"The way that American policy is set up with Chinese policy, so to speak, following it in the rear, points towards a major upward pressure on other currencies and that extends right around the world," flagged Ferguson, noting that South Korea and Brazil were already experiencing the pain of a stronger currency.