Greece edged closer to default this week after disputes over voluntary debt exchanges make financing its operations increasingly unlikely. Meanwhile, E.U. policy makers are starting to warm to the idea of paying out on credit default swaps (CDS) in the event of a default.

Accrording to Reuter's Felix Salmon, the big deadline for Greece's default is less than a month away on March 20^th when it has a 14.4 euro bond coming due that it can't afford to pay. And the journalist insists that it's a default that's going to be hard (or impossible) to avoid.

So, what does this mean for investors? Most analysts agree that the answer depends on the eurozone's reaction. A disorderly default would lead to a crisis of confidence in the E.U. and could lead to a domino effect with traders targeting Portugal and Italy. But a more orderly default may turn out to be a much more benign event.

Federal Reserve Chairman Ben Bernanke made the case for buying more bonds this week after lowering its growth forecasts and pushing back its rate increase horizon. The move means that investors will increasingly look towards riskier assets rather than holding T-Bills.

Emerging market stocks jumped to their highest levels in nearly five months, using the MSCI Emerging Markets Index as a proxy. Investors seeking less risky assets that still pay a decent return are also looking increasingly at emerging market debt as an alternative.

Investors looking to play these trends can check out these ETFs:

• iShares MSCI Emerging Markets Index ETF (EEM)
• Morgan Stanley Emerging Markets Debt (MSD)

It's no secret that Japan is heavily in debt. The country has the largest debt-to-GDP ratio of any major economy in the world at 233.1% for 2011. Meanwhile, that debt is projected to rise to 253.3% of GDP by 2016, with Greece being the next on the list at just 162.8%.

But recently, the country announced that it would probably miss its goal of balancing its budget by 2020 even with its proposed doubling of the sales tax. Many economists had viewed taxes as one of the few ways left to recoup funds as its interest rates already hover around 0%.

Japan's plight comes from the combination of a slower global economy and a rising valuation for its yen (which is ironically seen as a safe-haven currency among forex traders). While the country's actions remain to be seen, they aren't likely to be that great for investors...

Britain may be facing its fair share of trouble, but London is still firmly established as a global financial hub. The London Stock Exchange (LSE) has been working diligently to expand its presence in Asia and the Middle East.

This week, the Hong Kong Monetary Authority and the UK Treasury launched a private-sector forum to strengthen links between the two countries. Specifically, the two countries will focus on the development of new yuan-denominated products.

In addition to its burgeoning yuan business, London and the LSE have also been seeing robust interest from countries like India, despite the exchange's lackluster performance. Combined, these developments should keep London at the center of the financial universe.