I predicted the crash of 2008 – these are the global “major threats” I can see now | Nouriel Roubini

In the coming decades, the world will face major threats that will jeopardize not only our global economy and financial assets, but also peace and prosperity.

In our partisan political world, where we kick the can on the road — we’re biased toward short-term planning and leave thinking about the future to others — these threats are something different. Left to grow, they will make life worse for people all over the world. It is essential in the public interest that these threats are not ignored by our leaders, but rather are recognized, taken seriously, and addressed – quickly.

Some of these huge threats are economic: the specter of inflation and recession at the same time; Mother debt crises for all as public and private debt ratios reached record highs; An aging population that will destroy our pension and healthcare systems, to name a few. In the years leading up to the 2008 financial crisis, I correctly expect Our pernicious cycles of boom and bust will lead to a global economic meltdown. I am afraid we will face this possibility again.

Here’s what the economic crisis will look like this time around. A global recession that will be severe – not short and shallow – as high debt ratios and high interest rates sharply increase debt servicing problems. Defaults by households, companies, financial institutions, governments and countries where central banks are forced to raise interest rates – not lower them as we have seen in recent decades – to fight inflation. Pricing of advanced economies such as the UK begins like emerging markets after disastrous economic and financial policies, such as those pursued by a short-lived Truss government. The bubbles in private equity, property, venture capital and cryptocurrency will burst now that the era of cheap money is over.

But beyond these times, our turbulent times present us with huge geopolitical threats to our way of life. The global backlash against liberal democracy and the rise of authoritarian radical parties from the extreme right and left has been driven in part by a sharp rise in income and wealth inequality. Workers feel left behind while elites gain wealth and power. This will only get worse with job losses, not due to trade and immigration, but because artificial intelligence, robotics, and automation will lead to permanent technological unemployment. If this is left unchecked, this will almost certainly see the rise to power of more dangerous and aggressive populist regimes.

More urgently, the conflict in Ukraine has increased the risk of a renewed Cold War between the West and powers such as China, Russia or North Korea. Escalating tensions between the United States and China over Taiwan have peaked in recent months and could escalate further. The continuing risk of conflict between Iran and Israel could destabilize us all.

Then there are the most serious and most pressing threats: the global climate crisis, which will lead to unspeakable and irreversible economic and human catastrophes if it continues to be ignored. It’s already at our door, of course. This year alone, natural disasters have caused millions of climate refugees. Droughts and heat waves swept India, Pakistan, sub-Saharan Africa, and the western United States. It’s just a sign of things to come, and yet the powerful do little to address it – most of the talk, and indeed most of the investment, is nothing more than eco-friendly washing and a desire to conserve the environment. What we need is not urgent concrete action.

These are just some of the current ominous signs of huge, much worse and dangerous dangers in the next decade – huge threats that I see our leaders ignore every day, and it is clear that the past 75 years of relative calm should be under threat now.

Here is one possible path to our future world: These threats materialize and feed on each other in a devastating cycle, leading to economic chaos, instability, collapses, and conflict worse than we already know. But there is another future that is less dystopian: a future in which local and international politicians collaborate on sound policies and solutions to ensure that half a century of peace and prosperity continues – however rugged it may be.

It is important that our leaders are aware of such huge threats so that they can be addressed before it is too late. As long as dysfunctional, polarizing politics and feuding geopolitical rivalries prevent much-needed global cooperation, a miserable path seems a more likely bet.

Nouriel Roubini, Professor Emeritus at the Stern School of Business and author of The Great Threats: Ten Dangerous Trends That Threaten Our Future and How to Survive Them.

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