EMERGING nations were overtaking the West to become the world's dominant economies in the biggest redistribution of wealth in 500 years, Harvard University academic Niall Ferguson said yesterday.

"It's the single biggest thing that will happen in your lifetime," Prof Ferguson, a Harvard historian, said in the speech delivered at a conference in Copenhagen hosted by the Skagen Fund. "China's gain is at the expense of the US and of the European Union. We are living in a profound global shift."

The 17-member euro zone would probably see defaults this year , he said.

US Federal Reserve chairman Ben Bernanke had saved the global economy from falling into a depression by presiding over a historic increase in the size of the central bank's balance sheet, he said.

"He turned the Fed into the biggest hedge fund in history," said Prof Ferguson. "He bought stuff that no central bank has ever bought before. He bought utter garbage and, in doing so, I believe he saved us from a great depression."

It would take about seven years before the bank's balance sheet returned to normal levels, its vice-chairman, Janet Yellen, said on Saturday.

Prof Ferguson said: "The Fed bailed out the Europeans almost as much as it bailed out the American banks."

The US had yet to take measures to deal with its overindebtedness, but it was better off than the European Union, where an absence of fiscal union was threatening the survival of the euro zone, he said . Bloomberg