Calls to end austerity measures in Europe are moot points, as debt-ridden economies there have no choice but to undergo painful belt-tightening measures to right the bloated economies, says Michael Pento, president of Pento Portfolio Strategies.

Greece agreed to hike taxes and lay off public-sector workers in exchange for bailout money under the notion that painful reforms today will lead to a sleeker and more competitive economy tomorrow that can repay rescue lenders.

Yet critics say austerity sends already sky-high unemployment rates even higher and cuts tax revenues, thus exacerbating recession.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

Either way, Pento tells Yahoo's The Daily Ticker, austerity is coming.

Once a country runs up as much debts as Greece has, default is inevitable, and there are two ways to handle it — the country can go the traditional way and restructure with creditors, Pento says.

"When an entity owes more money than they can possibly pay back, they have two ways of defaulting. They can tell you, explicitly, 'I cannot pay you back. Let's restructure the debt.'"

The other way a country can default is to continue to borrow and print money and pay their lenders back although the currency will be seriously debased and worth far less than it was when initially borrowed.

"The purchasing power of the money that I have given you will erode so dramatically it will be the same mathematical equation as if I didn't pay you money back at all."

Restructuring leads to austerity, while hyperinflation that comes with money printing leads to higher borrowing costs, which, in the end, leads to austerity that will ultimately save the economy.

"The countries that are insolvent are going to have to choose how to default on their debt. It's not my opinion, it's a fact. If they owe more money they can possibly pay back, they must default."

U.S. monetary policy authorities, meanwhile, want action out of Europe soon.

Federal Reserve Bank of St. Louis President James Bullard told reporters in Japan that European leaders need to convey "vision and rapid action" to prevent the crisis in Europe from turning into "a major meltdown for the world economy," MarketWatch reports.

"It's a grave situation indeed," Bullard said.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.