On Friday, New York University professor and noted economist Nouriel Roubini said that we have now exited the period of relative calm in the global economy, and we will now begin to enter into a period of stagflation, combining slow growth with higher unemployment and rising inflation.

Roubini, who was one of the first economists to predict the 2008 financial crisis, said that due to the host of risks, and “mega-threats” the world is facing, today’s situation may be even worse than 2008.

In an interview with the French news outlet Le Monde, Roubini said, “In the short term, there are [risks] related to the war in Ukraine, of course, to inflation and to the specter of a financial crisis which could arise in the next few months or in the next two or three years. Added to this are mega-threats likely to materialize more or less severely in the long term… starting with climate change… geopolitical tensions which could degenerate into nuclear war between great powers, and socio-political instability.”

Nicknamed “Doctor Doom,” by Wall Street, Roubini made the case that the prevailing beliefs that inflationary conditions are only temporary, and that the hawkish monetary policies of central banks will be able to enact a “soft landing” are wrong.

He went on to say, “I think the landing will not be soft but harsh, and associated with financial stress. Raising interest rates while the economy is losing momentum, with an overall level of debt much higher than in the 1970s, could cause a collapse in stock and bond markets, which could deepen the recession.”

He added, “Part of the solution will necessarily involve inflation, which reduces the debt burden. I’m not saying inflation is desirable, but I don’t see how to avoid it. The era of the great moderation is over, we are entering the great stagflation.”

Roubini also said he foresaw a trade war in the future, between the West, “and a group of revisionist powers,” such as Russia, China, Iran and North Korea, “which could lead to a fragmentation of globalization and a re-localization of production chains, increasing global insecurity.”

He urged the world to learn from history, and marshal their forces now to prevent a worsening of conditions before it was too late.

He explained, “We lived like zombies who go back to sleep despite the alarm ringing, and who have forgotten that history is not linear… The creation of major international institutions enabled us to reconnect with a period of relative peace and prosperity. But believing that such an era can last is a mistake… The main stages of grief are denial, anger, depression and acceptance. If we look our problems squarely in the face, we can wake up and start mobilizing, but we’re still stuck somewhere between denial and anger.”

Image of Nouriel Roubini courtesy of Nouriel Roubini – World Economic Forum Annual Meeting 2012