Top Economist Warns of Global Collapse Fueled by Debt, Inflation, and False Prosperity
Veteran macroeconomist Henrik Zeberg has issued a stark forecast, warning that the global economy is approaching a collapse that could eclipse the 2008 financial crisis.
In his latest analysis, Zeberg described a world economy stretched to its limits after years of easy money, surging inflation, and unsustainable debt accumulation.
He argued that the next downturn won’t be sparked by a single event but by the slow unraveling of a system built on artificially inflated wealth. Central banks, he said, have spent nearly two decades keeping markets afloat through cheap liquidity – creating prosperity that existed “only on paper.” Now, that illusion is fading.
A Breaking Point in the Labor Cycle
Zeberg believes the world has entered the final phase of its expansion cycle, where employment can no longer rise and consumer strength begins to weaken. As global demand cools, layoffs are expected to spread, marking the start of what he calls an “inevitable economic reset.” The coming period, he said, will resemble stagflation – prices rising even as wages fall and jobs disappear.
Unlike 2008, when central banks could inject massive liquidity to rescue the system, Zeberg warned that today’s environment is far more constrained. “The world is drowning in debt,” he explained, noting that governments no longer have the fiscal capacity to print their way out of trouble.
Warning Signs From the Housing Market
The economist pointed to the housing sector as one of the first areas showing stress. Home affordability in the United States has deteriorated sharply, with prices climbing roughly 20% over the past five years while salaries have barely budged. The result has been a steep drop in home sales and rising pressure on households struggling to meet mortgage payments.
If unemployment rises further, Zeberg cautioned, the housing market could turn from slowdown to collapse, triggering a chain reaction across credit markets similar to – but deeper than – the one seen in 2008.
A Stronger Dollar, A Weaker World
Another red flag, according to Zeberg, is the strengthening U.S. dollar. As it gains against other currencies, countries heavily indebted in dollars – particularly in emerging markets – could face mounting repayment burdens, leading to capital flight and financial distress.
He described the coming downturn as a “global phenomenon,” not a regional crisis. Advanced economies, he said, will see contractions in consumption and investment, while developing nations could experience debt crises and currency shocks.
Zeberg summarized the situation as the consequence of a long cycle of denial. “We borrowed from the future to live better today,” he said, adding that the reckoning is now unavoidable. “This isn’t just another recession. It’s the end of a monetary era.”
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