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The world has entered a geopolitical depression with dangerous revisionist powers challenging the economic, financial, security, and geopolitical order that the US and its allies created after WWII.

Team Transitory clearly lost to Team Persistent in the inflation debate. And now there are early signs that the Great Moderation has given way to the Great Stagflation.

Simply put, the effort to fight inflation could easily crash the economy, the markets, or both. The historical evidence shows that a soft landing is highly improbable. A recession in the next two years is likely.

The global economy has suffered two large negative supply-side shocks - first from the Covid-19 pandemic and now from Russian President Vladimir Putin's invasion of Ukraine - exacerbating stagflationary conditions.

2021 turned out to be a relatively positive year for economies and markets in most parts of the world. But investors are likely to remain on the edge of their seats for most of 2022.

How will the global economy and markets evolve over the next year? There are four scenarios that could follow the mild stagflation of the last few months.

Demand and supply dynamics could lead to 1970s-style stagflation (rising inflation amid a recession) and eventually even to a severe debt crisis.

The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when.

There is a growing debate about whether the inflation that will arise over the next few months will be temporary, reflecting the sharp bounce-back from the Covid-19 recession, or persistent, reflecting both demand-pull and cost-push factors.

The same millennials who were shafted over a decade ago are being duped again. Workers who rely on gig, part-time, or freelance "employment" are being offered a new rope with which to hang themselves.

This crisis may morph over time. The second quarter of 2020 looked like an I, free fall. Quarter three looked like a V, as any rebound from very low levels of activity initially does. My baseline scenario is an anaemic U-shaped recovery.

In February, I warned any number of foreseeable crises - "white swans" - including Covid-19, could trigger a massive global disturbance in 2020. Many are now in play. Why are financial markets ignoring these risks?

Ten risks, already looming large before COVID-19 struck, now threaten to fuel a perfect storm that sweeps the entire global economy into a decade of despair.

The disconnect between financial markets and the real economy is becoming more pronounced, as investors focus on the attenuation of some short-term tail risks, and on central banks' return to monetary-policy easing.

It is only a matter of time before some shock triggers a new recession. Because policymakers will be pressured to do something, "crazy" policy responses will become a foregone conclusion.

There are several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis.

There are three negative supply shocks that could trigger a global recession by 2020. None of them are amenable to the traditional tools of countercyclical macroeconomic policy.

Crypto land has become an unregulated casino where unchecked criminality runs riot. It is high time that law-enforcement agencies stepped in.

The US Federal Reserve surprised markets recently with a large and unexpected policy change. The new normal will be a US policy rate close to or just below 3%.

There may be enough positive factors to make this a relatively decent - albeit mediocre - year for the global economy. But a global growth-stall and sharp market downturn could come in 2020.