It is called a polycrisis. A convergence of simultaneous, interdependent shocks that feed on one another, leaving institutions without effective responses. Armed conflict in the Middle East, Brent crude above $100, central banks trapped between inflation and recession, US public debt in the red zone, opaque private credit expanding untested, artificial intelligence introducing unprecedented systemic risks.
The dominant narrative — from governments, international institutions, financial media — presents this pile-up of crises as bad luck. A convergence of exogenous factors that nothing could have foreseen. An exceptional moment calling for exceptional responses, before returning to normal equilibrium.
This narrative is false. Or more precisely: it is incomplete in a way that is not innocent.
Our 2026 polycrisis is not an accident. It is the logical outcome of a monetary system designed for infinite growth in a physically finite world. Understanding why requires going back not to recent events, but to the deep architecture of the system itself.
A system built on an impossible promise
Since 1971 — the end of the Bretton Woods agreements, the decoupling of the dollar from gold — the global monetary system has rested on a fundamental assumption: credit growth can be perpetual, provided confidence in the issuing institutions is maintained.
This architecture is not neutral. It encodes a presupposition: that economic growth can expand indefinitely, that energy and biophysical resources do not constitute absolute constraints, that accumulated debt can always be absorbed by future growth. In other words, that the future will always be larger than the present.
This is not an empirical description of the world. It is a belief. And 2026 is the year in which this belief begins to collide head-on with thermodynamic reality.
By accumulating perpetual debt on a finite planet, the monetary system implicitly bets on a future always more abundant than the present.
The IMF projection is explicit: global growth slowed to 3.1% under the assumption of a limited conflict, with asymmetric downside risks. US debt could reach 137% of GDP by 2035 if rates remain at 4%. Private credit weighs between $1.5 and $2 trillion, having never been tested through a real recession. Around fifty US banking holding companies report exposures to non-bank financial institutions exceeding 100% of their core capital.
But before describing the mechanisms, let us ask the fundamental question: how does a system manage to accumulate so many simultaneous fragilities? The answer is simple: by systematically externalising real costs — ecological, social, temporal — into spaces outside market accounting.
I cannot say it often enough: the economy of things we always count is only possible because of the existence of things we never count.
Public debt: when the state becomes enslaved to its own currency
Let us begin with sovereign debt, because it is here that the central paradox of the current monetary system appears most clearly.
The US Treasury issues more debt each week than the total outstanding debt of countries like Singapore or Poland. The national debt approaches the peaks reached during World War II — but without the prospect of a war economy reconverting into civilian productivity. Short-term securities issuance now exceeds 100% of GDP, three times its level a decade ago.
This volume of issuance generates a phenomenon economists call fiscal dominance: when the Treasury's financing needs become so massive that they implicitly constrain the Federal Reserve to maintain rates compatible with public debt sustainability, at the expense of price stability.
Non-technical translation: the Fed cannot really choose its rates freely. If it raises too much, the cost of servicing public debt explodes and the state becomes insolvent. If it cuts, it reignites inflation and erodes real purchasing power. This is not a decision problem. It is a structural trap.
Central banks are like crystal balls that do not predict the future, but provoke it.
This trap is the direct consequence of a system in which money creation is backed by debt. Every dollar in circulation corresponds to a debt somewhere. GDP growth does not merely reflect economic activity — it is the necessary condition for repaying past debts and creating new ones. When growth slows, the monetary system enters mechanical tension.
Central banks in the trap: inflation or recession, take your pick
The closure of the Strait of Hormuz triggered the most brutal oil shock in several decades. Brent crude rose by more than 78% compared to its late-2025 levels. This shock is asymmetric: it simultaneously raises production costs, compresses households' real incomes and reduces domestic demand — while fuelling inflation.
Faced with an energy supply shock, monetary policy tools are structurally inappropriate. Raising rates does not reopen shipping lanes. Cutting rates does not compensate for a physical loss of energy production. The Fed, the ECB, and their counterparts worldwide face an equation with no solution within the current system: any action worsens one of the two dimensions of the problem.
This is not the incompetence of central bankers. It is a structural limitation inherent in a monetary system that operates as if energy resources and biophysical balances were exogenous data, external to economic logic — infinite resources that generate no externalities. Yet since at least the first oil crisis of 1973, it has been evident that these constraints are endogenous. They are part of the system. A monetary system that ignores them accumulates them as silent debts, until the moment they manifest brutally as crises.
US core PCE inflation is moving back above target. The Sahm Rule indicator — a recession precursor — is rising. Markets are pricing a 30–35% probability of recession over the next twelve months. The yield curve is entering a bear steepening phase, historically correlated with a slowdown in industrial production. An inversion of cause and effect: it is not the polycrisis that creates the central banks' dilemma — it is the central banks' dilemma that generates and amplifies the polycrisis.
Shadow banking: opacity as architecture
The expansion of private credit is presented as a beneficial financial innovation, financing mid-sized companies excluded from public markets. This is partly true. But structural analysis reveals something more troubling.
Between $1.5 and $2 trillion of credit circulates in vehicles without public ratings, without transparency obligations equivalent to regulated banks, and having never survived a real recession. Borrowers present on average higher financial leverage and lower credit quality than comparable public markets. The interconnections between these funds, traditional banks, insurers and private equity firms create a network of interdependencies that no one maps completely.
This opacity is not a bug. It is a feature. It allows risk to accumulate off-balance-sheet, losses to be deferred through discreet valuation practices, and the confrontation with underlying economic reality to be postponed indefinitely.
But opacity does not eliminate risk. It concentrates it, displaces it and makes it invisible until the moment it explodes — all the more violently because no one saw it coming. In 2026, fifty US banking holding companies report exposures to the non-bank sector exceeding 100% of their Tier 1 capital. The interconnection is such that stress in private credit immediately flows through to traditional bank balance sheets — exactly what post-2008 reforms were supposed to prevent.
Artificial intelligence: amplifier of instability, not a solution
Enthusiasm for AI in finance deserves a dispassionate look. The productivity gains are real. So are the systemic risks introduced.
Concentration on a small number of models and cloud infrastructure providers creates single points of failure at the scale of the global financial system. The offensive capabilities enabled by AI drastically reduce the reaction time needed to exploit a critical vulnerability. A technical incident in infrastructure shared by hundreds of institutions could propagate at incredible speed, without leaving time for the usual correction mechanisms to activate.
Furthermore, investments in AI infrastructure are expected to reach $3.4 trillion by 2030 — largely financed by debt. Bonds issued by major technology companies represent approximately $1.2 trillion, eight times the credit commitments of large banks to that sector. Disappointment on returns on investment — highly probable if the profitability of generative AI is slow to materialise at industrial scale — could trigger a major stock market correction with contagion effects well beyond the technology sector.
This is not a judgement on technology. AI, in a sound monetary system, could be a powerful tool for transitioning toward resilience. In the current system, it amplifies existing instability dynamics.
Why standard recommendations are insufficient
Faced with this diagnosis, international institutions formulate recommendations consistent with their framework: strengthen oversight of non-bank actors, finalise Basel III, improve financial cybersecurity, present credible fiscal consolidation plans, strengthen foreign exchange reserves of emerging markets.
These recommendations are reasonable in their logic. They would marginally improve the resilience of the current system. But they do not solve the fundamental problem, for a simple reason: they treat symptoms without touching the cause.
We are dealing with people who always use the same ingredients, the same recipes and the same cooking, and are surprised that what comes out of the oven is always the same dish.
The cause is that a monetary system backed by debt in a compulsory growth regime can only produce escalating cycles of indebtedness. That a system which externalises ecological and biophysical costs outside market accounting can only accumulate them until collapse. That a financial system whose liquidity depends on confidence in a small number of central institutions is structurally fragile to any confidence shock.
Strengthening oversight of private credit does not change the fact that private credit exists because the traditional banking system, constrained by its rules, can no longer alone finance the growth the monetary system requires. Finalising Basel III does not change the fact that banks, in their profitability logic, will always seek the least regulated spaces. Presenting fiscal consolidation plans does not change the fact that in a system where money is created through debt, public debt is structurally necessary to the stability of private balance sheets.
Every attempted reform within the system hits the same contradiction: it secures one compartment while creating pressure on another. The system reconfigures, fragilities shift. Our 2026 polycrisis is not the failure of financial oversight. It is the demonstration of this structural limit.
NEMO IMS: changing the architecture, not just the rules
This is precisely why a reform of the monetary architecture itself is necessary. Not an improvement of existing rules, but a change in what the monetary system measures, incentivises and finances.
NEMO IMS — the Neguentropic International Monetary System — rests on a fundamental principle: money creation must be anchored in the regeneration of living systems, not in the acceleration of their degradation. This is not a metaphor. It is a precise technical and institutional proposal, articulated around several structural pivots.
First, decouple part of money creation from debt — specifically money dedicated to regenerative activities. In the current system, every monetary unit corresponds to a repayment obligation with interest, which mechanically requires perpetual growth to avoid systemic deflation. NEMO IMS proposes an architecture where money can be created without corresponding debt — anchored instead in measurable regeneration indicators: regenerated biocapacity, positive net energy, preserved social commons.
Second, integrate biophysical constraints into monetary mechanics itself. The central banks' trap in the face of the 2026 oil shock is not a competence problem — it is an architecture problem. A monetary system that treats energy resources as exogenous cannot respond to their scarcity. NEMO IMS provides automatic signalling mechanisms: when biophysical limits are approached, the monetary system adjusts its incentives without requiring centralised political decision-making.
Third, decentralise money creation and monetary governance. The systemic fragility of the 2026 financial sector is largely linked to its concentration: few infrastructures, few models, few decision centres. NEMO IMS relies on the GAÏA standard — a distributed monetary issuance and verification protocol — which structurally eliminates single points of failure while maintaining international interoperability.
Fourth, make externalisations visible. Private credit can accumulate hidden risk because the system permits this opacity. A monetary architecture designed around biophysical and social transparency does not allow the externalisation of what must be accounted for — not through regulatory obligation, but through the construction of the system itself.
This is not to claim that NEMO IMS would resolve in a few years imbalances accumulated over decades. But it represents something current reforms do not offer: a direction. Not how to better manage a structurally inadequate system, but how to build one that is structurally coherent with a physically finite world.
2026… a tipping point?
Our polycrisis is painful, but it is revealing in a way that periods of apparent stability could not be.
It reveals that the current monetary system is not neutral. That it encodes a worldview — infinite growth, systematic externalisation of real costs, the predominance of market value over use value. And that this worldview, confronted with the thermodynamic, geopolitical and ecological realities of the 21st century, produces exactly what we are observing.
The question is therefore not: how do we stabilise the current system?
The question is: toward what system do we want to orient ourselves?
This question is not technical. It is eminently political — and civilisational. It concerns what we choose to measure, what we decide to finance, what we consider real wealth. And the answer we give to it will determine whether 2026 remains as a serious crisis among others, or as the moment when something fundamental began to change.
A monetary architecture is always the reflection of a civilisational choice. Not a law of nature — a choice.
Jean-Christophe Duval