Macroeconomist Henrik Zeberg has warned that the world is on the brink of an economic downturn far worse than the 2008 financial crisis, driven by decades of monetary excess, ballooning debt, and rising inflation.

Zeberg said the global economy has reached its peak employment phase, with job losses likely to accelerate as growth slows.

In an interview with Michael Farris published on October 8, Zeberg predicted a period of stagflation, where people will face rising prices for essential goods while struggling with unemployment and declining household income.

The economist argued that the looming crisis is the result of 17 years of aggressive monetary easing since 2008, which created a “false sense of wealth” through excessive money printing. 

That artificial boom, he warned, is now beginning to unwind, leaving ordinary households, not institutions, to bear the brunt of the fallout.

“You will see people lose their jobs unfortunately. You can think of the financial crisis and I think this one is going to be bigger simply because you don’t have the escape situation you had back then which they took by printing money. This time the debt in the U.S. the debt in around the world is much greater,” Zeberg said. 

Cracks in the housing market 

At the same time, Zeberg, who has consistently warned of a “blow-off top”, pointed to the U.S. housing market as an early warning sign. 

In this case, home affordability has collapsed, with prices roughly 20% higher than five years ago while wages have failed to keep pace. 

Existing home sales have dropped to multi-decade lows, and if unemployment rises as expected, many homeowners could be forced into foreclosure, triggering a deeper housing and credit contraction.

He added that a stronger U.S. dollar would further tighten global financial conditions, especially in emerging markets burdened with dollar-denominated debt.

Zeberg warned that the coming downturn will be global in scope, hitting both advanced and developing economies.

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