The UN Conference on Trade and Development argues that the global crisis is not over. It's worried about the "over-financialisation" of the world. Do you share that view?I agree with that view completely. I believe we're just getting set up for the next crisis. It's like having two heart attacks without getting the surgery in between, so to speak. In 2008, what happened? The central banks bailed out Wall Street.Now come forward another 10 years, perhaps 2018, it will be the central banks and the sovereigns themselves who will be in trouble. Who is going to bail them out?There is only one balance sheet bigger than central banks, which is the International Monetary Fund. So you could have this end game where the IMF floods the world with their money.story_article_left1But going back to 2008, the Fed printed $4-trillion, had $10-trillion of swap lines with the European Central Bank to give the Europeans access to dollars because they can't print dollars. They guaranteed every deposit in the US, guaranteed every money market fund in the US, they pulled out all the stops to keep the system from imploding.The problem is none of their policies have been reversed. The Fed balance sheet is bloated, the swap lines are still in place, and so the five biggest banks in the US are today bigger than they were in 2008. They have a higher percentage of the total banking assets, and larger off-balance-sheet exposures.So everything that was too big to fail in 2008 is bigger and riskier today. We're just waiting for the second heart attack.Where might the next crisis erupt?On current form I would say the dollar-denominated emerging-markets debt will begin to default all over the world and lead to maybe a global depression of some kind. But because of that the Fed might ease and then again reverse these capital flows, so that might actually reduce the burden of the debt, get money coming back. Now there's no end to this, it's just a see-saw. Nobody wins a currency war, you just keep going back and forth.How fragile are emerging market countries?I think they're very fragile and again I fault the Federal Reserve ... the minute the Fed says, well we might raise rates, then ... you sell the rand, sell South African stocks, take the money back, cover your dollar short position and get out of the trade. The Fed's tough talk and walking down this path towards tightening has caused the capital outflows. But there's a feedback loop.The capital flowing out is reducing world growth, creating deflation, making the Fed think twice about raising rates. If we get any more deflation, which we're seeing, the Fed may actually have to go back to easing after 2.5 years of tightening and then ... emerging markets will rally. So it's a very unstable situation.story_article_right2So if we experience some kind of emerging-market-led period of deflation, we might not necessarily see the meltdown some people are expecting?Well, you would get a different kind of meltdown, because with deflation it makes the real value of debt go up. The BIS [Bank for International Settlements] said that there is approximately $9-trillion of emerging market corporate dollar-denominated debt. That's not sovereign debt that the IMF can bail out, it's corporate debt ... dollar-denominated. Every time the Fed talks about raising rates and the dollar gets stronger, the burden of that debt goes up. So that's what will lead to wayward defaults.It could also be looking at defaults in the energy sector ... All this oil from fracking came from a lot of junk bonds, $5-trillion of those. So between energy and emerging markets you could be looking at a tidal wave of bad debt - very deflationary and very threatening to the banking system. So deflation is a potential crisis.Talevi is a BDTV presenter..