2026, The turning point? – Challenges and Opportunities for a new society

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For over eight years, I have been involved in quantitative finance, also known as macroeconomics, where I conduct in-depth mathematical analyses of how financial markets function, how the global economy evolves, and how geopolitical developments influence these dynamics. Over the past years, I have closely monitored fluctuations in currencies, inflation, debt levels, and political tensions.

It is becoming increasingly clear to me that multiple factors are converging to significantly heighten the risk of a global financial crisis by mid 2026. This situation reminds me of the Great Depression of 1929, but now unfolding in a far more complex and digitally interconnected world. Central banks worldwide continue to print money in an attempt to mitigate economic damage, which is leading to a structural weakening of purchasing power.

In case you have forgotten or are unfamiliar with the Great Depression: it was a period starting in 1929 when the global economy plunged into a deep crisis. Millions of people lost their jobs, businesses went bankrupt, and poverty surged worldwide. Banks and governments were not spared here either: many went bankrupt or fell into deep trouble. Thousands of banks collapsed, and many governments could no longer meet their debts or obligations. As a result, trust in existing political and economic systems was severely undermined. In many countries, populism rose as people sought simple solutions and strong leaders who promised to resolve the crisis. In Germany, this discontent and uncertainty led to the rapid rise of extremist parties such as the NSDAP under Adolf Hitler. Many people sought scapegoats for their problems, often blaming minorities and political opponents for the economic malaise and social unrest (Federal Reserve History, n.d., Wikipedia, 2024).

Why does this remind me of the deep depression of 1929? Because now, as then, many factors are converging simultaneously, significantly increasing the risk of a major global crisis. For instance, the amount of US dollars in circulation has skyrocketed over the past 26 years (see Figure 1): from approximately 500 billion dollars in 1999 to around 2.4 trillion dollars in 2025, an increase of about 380 percent. This growth has accelerated particularly since 2020, with a sharp spike during the COVID 19 pandemic. This rapid increase is a result of the Federal Reserve’s policy of creating additional money during times of crisis, which carries significant risks (FRED, 2025).

And that is not even counting the stablecoins from cryptocurrencies and other new currencies. These do not always have a solid underlying value but still flow into financial markets. Altogether, this weakens the position of the dollar, which in turn could cause the euro and other currencies to significantly lose value as well. The result is first inflation and eventually even hyperinflation. We are already seeing that in countries like Turkey, Iran, and Venezuela, where inflation is extremely high or even spiraling out of control. Trust in money is rapidly disappearing. This marks the beginning of a chain reaction.

With hyperinflation, money loses its value at an alarming rate, causing the prices of everyday goods to skyrocket and become unaffordable. For example, at one point in Venezuela, not long ago, a cup of coffee cost millions of bolivars, while a salary paid at the beginning of the month was worth almost nothing by the end of the month. This leads to widespread poverty, shortages of food and other basic necessities, mass emigration, and the collapse of the economy. This situation demonstrates that hyperinflation is not just a financial problem but also has severe social and human consequences (NOS, 2018, VRT NWS, 2018, Investing Ideas, 2024, BankBlog, 2023).

It is often said that the US Federal Reserve should print more money to support the economy, make borrowing cheaper, and make American products more attractive to foreign markets. However, this can also lead to higher prices, reduced trust in the dollar, and greater inequality between the rich and the poor (MarketUpdate.nl, 2025). Especially when we consider that most of the newly created money often flows directly into stock markets, it primarily benefits those who already have significant wealth. As a result, the prices of stocks and other assets rise, while wages and savings for people with lower incomes lag behind. This widens the gap between rich and poor. Ordinary people lose purchasing power, while the wealthy benefit from rising asset prices. Thus, printing money without fair distribution can exacerbate inequality.

If we look at the housing market, we see that real estate prices worldwide have at least doubled over the past five years. The fact that central banks are printing more money and that, in countries like the United States, it is relatively easy to secure a mortgage of up to one million euros without a stable job makes the current situation strongly reminiscent of the period just before the major housing crisis of 2009. For example, during the 2008 and 2009 crisis, we saw a similar situation to what we are experiencing now. In the United States, there was already a culture of excessive homeownership and rapidly rising housing prices. Many people purchased homes with high mortgages they could not afford once the market declined. Banks issued these loans without sufficient collateral, creating a financial bubble that eventually burst.

When housing prices fell, many homeowners could no longer pay their mortgages, leading to widespread defaults and a major crisis in the financial sector. In 2009, housing prices in some parts of the United States dropped by as much as 50 percent, triggering a severe global economic crisis. To save the economy, the US Federal Reserve lowered interest rates to nearly zero and implemented large scale measures such as debt purchases and international cooperation. While there was no official plan for a great reset at the time, many policymakers spoke of the need for sweeping reforms (Federal Reserve Board, 2010, Federal Reserve History, n.d., Norada Real Estate, 2023, Wikipedia, 2024).

Now, in addition to the devaluation of currencies and the rising housing market, we are also seeing tensions emerge on all levels, with geopolitical conflicts such as Iran versus Israel and Russia versus the West creating an explosive mix. Furthermore, the climate crisis is leading to shortages of food and water, gradually eroding trust in governments, central banks, and major tech companies. We are also facing a new wave of generative artificial intelligence, where algorithms are eliminating jobs but also driving innovation and restructuring work. This demands significant adjustments in education and government structures.

Additionally, the global debt burden has never been higher. Governments, corporations, and households are deeply in debt, largely financed with money printed by central banks since the 2008 financial crisis. This mountain of debt is unsustainable in itself, and either the absence of interest rate hikes or an abrupt increase in rates could destabilize banks and markets. As mentioned earlier, we are also witnessing an accelerating weakening of currencies due to excessive money creation, spreading inflation to more and more countries, particularly in developing nations and economically vulnerable regions.

For instance, the International Monetary Fund predicts a global economic slowdown in 2025, driven by policy changes, trade tensions, and growing uncertainty. It warns that increasing downside risks such as trade wars, financial market volatility, and deteriorating international cooperation could further tighten global financial conditions and hinder both short and long term growth prospects (IMF, 2025). J.P. Morgan Research supports this view, estimating a 40 percent chance of a global recession starting in 2025. This is attributed to new import tariffs and reduced government support, which are expected to lower global growth to just 1.3 percent, well below the normal level (J.P. Morgan Research, 2025).

While there is no consensus that a crisis will erupt this year, most experts agree that the global economy is in a vulnerable position. Slowing growth, high asset valuations, rising interest rates and policy uncertainty have made the financial system fragile. A major shock, whether economic, political or technological, could quickly trigger a broader financial crisis (J.P. Morgan Research, 2025, UCLA Anderson, 2025).

On the technological front, reliance on cloud based generative AI and digital infrastructures is already growing exponentially. If trust in these systems were to collapse due to large scale cyberattacks, political restrictions, economic instability or a sudden financial market crash, a significant portion of the economy could grind to a halt. This could force businesses, governments and citizens to rapidly transition to localized AI systems, something that currently seems unthinkable to many. Such a shift could lead to a decentralized movement and fundamentally alter the balance of power between major tech companies and individual users.

In short, we are facing profound societal and structural challenges. The various factors outlined above could make 2026 a pivotal year where economic, technological and geopolitical tensions converge into a global crisis. Geopolitical unrest adds to the uncertainty and instability.

In literature, this is often referred to as an “everything bubble,” which now appears to be unfolding. This term describes a situation where nearly all types of investments and markets such as stocks, bonds, real estate and alternative investments rise sharply in value simultaneously. The risk is that once trust erodes or interest rates rise, many markets could correct significantly at the same time with far reaching consequences. History shows that similar conditions have often led to the escalation of conflicts, the formation of new power blocs and disruptions in global supply chains, energy supplies and commodity markets. It is therefore not unthinkable that essential resources such as food, water, metals and energy could become scarcer, fueling inflation and increasing social tensions. The climate crisis acts as a catalyst in this regard, with droughts, floods and extreme weather severely impacting crops and infrastructure.

Of course, I hope the scenarios outlined above do not come to pass, but there are strong indications that the foundations of our world order are fragile and on the verge of breaking. This is precisely why it is important to start thinking about resilience and autonomy now. Creating self sufficient communities, strengthening local economies and investing in local open source AI, peer to peer payment systems and decentralized networks offer a way forward. These measures can help us not only weather the crisis but also build a new system out of the chaos, one that is fairer, more sustainable and more innovative.

Personally, I believe 2026 could mark the beginning of a radical shift where collective intelligence and self organization take center stage. By this, I mean that we, people, systems and technologies in networks, must work together to solve the complex problems facing our society. We will be challenged to approach things differently, which also presents an opportunity for renewal, collaboration and structural improvement.

In summary, 2026 could very well be the year in which we are not only confronted with major challenges but also given the chance to collectively shape a more sustainable and innovative future. This can only happen if we move beyond the denial phase and proactively adapt to changes, embracing, as the Chinese say, a crisis as an opportunity.

I will soon share more blogs where I delve deeper into developments in technology, the energy sector and financial markets, along with suggestions on how we as a society can turn the coming crisis into an opportunity to reshape our world. Be sure to follow my blogs for the latest insights and updates.

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