By Rania Spooner
When the economic red flags started to align for Nicole Foss in 2000, her family packed up, sold their home in England and created a self-sustainable property in Canada.
The visiting multi-disciplined academic says the fortunes of Western Australia's booming economy could "turn on a dime", something she concedes sounds like a radical "out of left field" forecast - and one strongly rejected by a WA resources economist.
Nicole Foss believes the global financial crisis of 2008 was only a taste of a greater catastrophe to come.Credit: Melissa Adams
Ms Foss believes the global financial crisis of 2008 was only a taste of a greater catastrophe to come, a slow leak in a finance bubble that is going to burst on a much larger scale, leaving no country untouched for decades before a recovery.
"The credit crunch is likely to rewrite the rules of engagement between us and our natural world over the next few years," Ms Foss told WAtoday.com.au ahead of a panel discussion in Perth last night.
"It really is the most immediate threat and something that is going to change the way we live."
While she has been referred to as an economist, a blogger, a finance and energy expert and a doomsayer, Ms Foss, critical of mainstream economic theory for being "too narrow", simply calls herself a systems analyst as she analyses varied global market patterns.
She says that the worst of the financial deleveraging will be over the next five years, which can already be felt in Europe. Beyond that, lies an energy crisis.
"The banking sector is extremely globally connected and we're also looking at the Chinese bubble bursting and very strange things happening in India where their investment bubble is bursting as well in places like Mumbai."
Mineral and economics professor from Curtin University Daniel Packey disagreed, arguing the "bright" minds at the helm of global banks and reserves would safeguard against contagion.
He also rejected the idea the GFC and European debt crisis were part of the same global event.
"Yes Europe is having some difficulty and yes the United States is having some difficulty but I don't see a one-to-one correlation and I don't see the linkage that also happens to Australia and I definitely don't see it happening to Western Australia," he said.
"I don't think what started in 2008 is going to continue in this downward spiral until it bottoms out. I don't think people are just going to stand back and watch this crash and burn to the extent she's implied.
"There are underlying mechanisms in there that are designed to stop it and there are intelligent people in there who will be working very hard not to happen."
The GFC could have been predicted decades ago using a broader approach, according to Ms Foss.
"People who started warning back then were dismissed as being doomsters who are never right," she said.
"We've hollowed out our real economy to the point where there's very little substance left and now we're running on fumes in terms of our financial system and when that bubble implodes it can so really quite spectacularly.
"This is really going to be the defining event of our era."
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