Opinion: The Next Financial Crisis Won’t Be Born of One Cause But of Complacency

When economist Bruno Colmant recently declared that “the next financial crisis is unavoidable,” many dismissed it as another cyclical warning from a pessimist. Yet beneath his alarm lies a question we’d be foolish to ignore: what happens when fiscal excess, political dysfunction, and technological exuberance converge?

Because while Colmant points to debt and the dollar, there’s another accelerant in play, the artificial intelligence boom. Together, they form a fragile triangle of confidence that defines today’s economy. It is confidence, not cash flow, that ultimately sustains the system.

Debt and Denial

The United States’ fiscal trajectory is undeniably troubling. Public debt is now near 100% of GDP and projected to rise beyond 120% within a decade. Deficits persist above 6% of GDP despite full employment. Colmant’s warning about an unsustainable debt path is therefore well founded.

Yet to frame this as purely an American pathology misses the systemic reality. The world runs on US debt because it trusts the institutions that back it, the Treasury, the Federal Reserve, and the courts that enforce contracts. That trust has held through wars, recessions, and political theatre. It is fraying, but not broken.

The problem is not technical solvency, it is political will. The US could stabilise its finances tomorrow through fiscal reform and structural growth policy. But partisan paralysis makes that almost impossible. So the can keeps rolling downhill, cushioned by the dollar’s reserve status, a privilege that feels increasingly like an addiction.

The Dollar: Still King, but Questioned

Talk of “de-dollarisation” has grown louder, particularly among the BRICS nations. Yet the data remain clear: around 58% of global reserves and nearly 80% of trade invoicing are still denominated in dollars. No other currency offers the same depth, liquidity, or legal security.

Still, the cracks are visible. Central banks are quietly diversifying, increasing gold holdings, experimenting with digital settlement, and edging exposure toward the euro and yuan. None of this dethrones the dollar, but it signals a shift in psychology. The moment global markets begin to question US fiscal governance rather than simply price it, the dollar’s dominance could erode faster than most policymakers expect.

The AI Mirage

While Colmant’s gaze is fixed on Washington’s balance sheet, the more immediate excess lies in Silicon Valley. Artificial intelligence has become the speculative mirror of modern capitalism, a story of boundless potential driving valuations untethered from present reality.

AI-related stocks now dominate global indices; the so-called “Magnificent Seven” account for nearly a third of the S&P 500. Venture funds have funnelled record sums into AI startups, many with neither revenue nor viable models. The parallels to the dot-com era are uncomfortable: extreme optimism, circular financing, and a belief that this time is different.

If, or rather, when, this market corrects, the fallout will go beyond tech. AI investment has fuelled a significant share of recent US growth, driving demand for chips, data centres, and skilled labour. A sharp reversal could shave points off GDP, slash tax revenues, and reignite fiscal pressures just as borrowing costs rise.

In that sense, an AI bubble burst could be the spark that tests Colmant’s thesis. Not because the technology fails, it will endure, but because the economic narrative built around it collapses. Every era’s crisis begins with overconfidence in its defining innovation.

Systemic or Self-Correcting?

There is, however, an important distinction between vulnerability and inevitability. The banking system is far better capitalised than in 2008. Stress tests show resilience even under severe shocks. The dollar, while challenged, remains the cornerstone of global finance. And central banks still have tools, though less political room, to stabilise markets.

A crash in AI valuations would hurt, perhaps deeply. But it would not automatically trigger a systemic collapse unless it coincides with a broader loss of confidence in US fiscal credibility. That is where Colmant’s analysis, though dramatic, finds its real force. The danger is not one trigger; it is the compounding of interlinked fragilities, debt, politics, and belief.

The modern economy is built not on gold or algorithms, but on trust, trust that tomorrow’s value will justify today’s price. When trust erodes, liquidity follows, and crises spread.

Europe’s Role and Missed Opportunity

Europe, meanwhile, risks watching all of this unfold from the sidelines. With no unified capital market, no cohesive fiscal vision, and a dependency on imported innovation, it remains more spectator than shaper of global shocks. That absence of agency may prove more dangerous than any single bubble.

Europe could, in theory, anchor stability by leading in digital governance, AI ethics, and fiscal prudence — areas where it already has credibility. But it must move from regulation to participation. Otherwise, as Colmant rightly notes, the continent will continue to fade into the background of a drama written elsewhere.

The Real Risk

So, is Colmant right? Partly.

A financial reckoning is possible, perhaps even probable, but not predetermined. The system is not collapsing because of debt or the dollar or AI, it is eroding because of complacency. We have normalised dysfunction, deferred accountability, and confused innovation with invincibility.

If the AI bubble bursts, it will not just reset valuations. It will test whether governments, institutions, and investors can still act with coherence when the stories they’ve sold themselves start to unravel.

The next crisis, if it comes, won’t be born of one cause.

It will be born of disbelief, the moment when confidence, our most valuable currency, finally runs out.

LET'S SEE.