At some point, the world is going to have to bite the bullet and accept a huge downsizing in its way of life to bring the assets-to-debt ratio back in touch with reality.

If you ask which of the scenarios I think is most dangerous, though, I will give a different answer. In that form of the question, I regard a nuclear attack, terrorist-generated or otherwise, as the most threatening combination of likelihood and long-term damage to modern life today.

System theorists know that it's easy to couple simple-to-understand systems into a "super system" that's capable of displaying behavioral modes that cannot be seen in any of its constituent parts. This is the process called "emergence."

Trying to solve the problem by creating more debt is analogous to trying to stop being an alcoholic by going on a bender down at the corner bar.

A good analogy is stretching a rubber band. You can stretch and stretch and even feel the tension increase in the muscles in your hands and arms as the gap from one end of the band to the other widens. But at some point you reach the limits of elasticity of the band and it snaps. The same thing happens with human systems.

The unfolding time for the end of globalization or a worldwide deflation is much longer, certainly measured in years, if not decades.

To function effectively, the system scientist must know a considerable amount about the natural world AND about mathematics, without being an expert in either field. This is clearly a prescription for career disaster in today's world of ultra-high specialization.