Former Federal Reserve chief Ben Bernanke, the economist who denied the severity of the subprime-mortgage market in the leadup to the Great Recession, recently dismissed concerns about contagion from Chinas economic slowdown.

Dismissing Chinas $28 trillion debt as an internal problem, Bernanke said, I dont think Chinas economic slowdown is that severe to threaten the global economy.

But one high-profile duo respectfully disagrees with Bernanke, although each comes from different sides of the political spectrum. Both George Soros and David Stockman are singing similar tunes when it comes to the potential for Chinas troubled economy to wreak havoc on the rest of the world.

Soros made a name for himself and amassed a fortune worth billions by running his famed Quantum Fund, which famously broke the Bank of England in 1992 by betting against the British pound. In recent years he has established a reputation as a philanthropist who donates millions to liberal and left-leaning causes.

Stockman was active as a Republican congressman in the 1970s before being appointed as chief of President Ronald Reagans Office of Management and Budget. Stockman went on to join the private sector, serving at companies such as Salomon Bros. and Blackstone and running his own private equity fund company. In recent years he has become a high-profile critic of the Federal Reserve, rampant government spending, and the so-called Wall Street casino.

Deflation unseen since the 1930s: Now check out what Soros has to say about Chinas economic problems: Its deflation and overindebtedness of the Chinese economy, he told Bloomberg while attending the World Economic Forum in Davos, Switzerland. The total social debt is now 300%, and maybe actually it might be up to 350% if you take into account the external debt. So its serious. A hard landing is practically unavoidable. Im not expecting it; Im observing it. The key issue is deflation. Its a key condition that were not used to. None of us have lived in a deflationary environment. The last time that we had that was in the 1930s. We just dont know how to handle it. Its a different environment. But now we have to fix it. China can manage it. It has over $3 trillion of reserves and so on. However, they have a way of inflicting their problem, passing it on, to the rest of the world.

He warned elsewhere that China is responsible for a larger share of the world economy than ever before and the problems it faces have never been more intractable.

Europe on verge of collapse: Soros went on to reveal that he is shorting, or betting against, the S&P 500. This year is going to be a difficult year, and the balance is on the downside, Soros said. If you have a real bottom, its always retested.

He also doesnt expect the Federal Reserve to raise interest rates again this year, noting that he believes the central banks December hike in the face of the global slowdown was probably a mistake. And in a separate interview, he also said he thinks the European Union is on the verge of collapse.

Now listen to Stockmans recent interview on CNBCs Fast Money show. His devastatingly frank assessment of the global economy focuses at first on U.S. markets before moving on to China.

We have a dead-cat bounce, in no mans land around 1870 on the S&P, he said. Weve been there now for 700 days if you can believe that. It first crossed in February 2014. By my count weve had something like 35 attempts at rallying all of them have failed for what I call The Four Nos. Theres no escape velocity. I think were heading for a recession. Theres no earnings growth. Theyre actually going down. Honest earnings on a GAAP basis. Theres no dry powder left in the central banks of the world. Weve been through a spree of 20 years, and I think that theyre done, all of them, from China to here. And theres no reflation because there wont be any credit growth in the world and were going into a much different deflationary era.

We are at peak debt: Now let me just hit the first one, no escape velocity. Forget about jobs; its a lagging indicator, and besides that, the BLS counts anybody that can fog a mirror as having a job. Sales, business sales, are the heart of the matter; theyre down 4%. Capex orders are down 6% from the peak a year ago. Freight volume is down 7% from a year ago. Exports are down 12%. Inventories to sales are at an October 2008 low.

Were in a flat global economy. Everything is inter-related. Were now in a huge deflation as a result of this massive credit bubble weve had. Now let me give two numbers that I think are really important. Central banks had $2 trillion on the balance sheets about two decades ago. Its $21 trillion now. 10X, not chump change. This is high-powered money that caused an enormous expansion of credit and financial valuation bubble. Secondly, that resulted from debt in the world going from $40 trillion mid-90s to $225 trillion today. We are at peak debt. There is no more credit that can be shoved into the system. There has been massive overinvestment in everything: mining, energy, heavy industry, transportation, you name it, shipbuilding.

Everything is beginning to shrink: With credit expansion you can get China in this massive expansion, but now theyre drowning in excess capacity over everything. They created a billion tons of steel. They dont have demand for half of it. They doubled the size of their auto industry; demand is not growing that rapidly. So if we look around the world, everything for the first time in 20 years is beginning to shrink, and the central banks clearly cant do anything. The bank of China is facing a trillion of capital flight this year. When the December numbers are in, itll be a trillion in capital flight. They cannot run the printing presses or they will cause a total panic.

The Bank of Japan is crazy. Theyre buying anything in the fixed-income market that moves and anything that stands still. Theyre done. Europe (European Central Bank chief Mario) Draghi is down to emitting word clouds. There is no more that he can do. And the Fed sat on the zero bound for 84 months at zero. There is nowhere else to go except negative interest rates, which will cause a political explosion in this country.

So I say look at earnings. Honest earnings were $106 per share S&P GAAP LTM September 2014; they came in at $91 in the LTM just ended in the third quarter. Thats down 14% and I dont see why its going up. So therefore I now think were getting to the point where the chickens are coming home to roost, and youre not going to be able to fake your way any further. Theres no hope from the central banks, and thats why these rallies are getting weaker and weaker and shorter and shorter.

Diversify to weather the storm: There you have it: two separate interviews by two politically opposed, highly respected figures in modern finance and economics, and yet they both see many of the same hazards on the horizon: China, debt, deflation, overvalued stocks, and the potential for contagion.

Are you looking for protection from these dangers to the global economy? Because we dont know how all this is going to turn out, diversification across a range of uncorrelated asset classes remains a crucial strategy. Gold and silver bullion and rare coins are necessary elements for any properly diversified portfolio.

Sagging oil prices have sent shock waves through the financial markets in the past several months, and now news that Iran is about to start pumping crude back into the global system has upped the ante on those fears.

The lifting of international sanctions against Tehran over the weekend means that oil prices which already were trading near a 12-year low of $28 a barrel Monday could have much further to fall, the International Energy Agency has warned.

While the pace of stock-building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in oversupply, said the IEA. Prices could go lower.

Why is the falling price of oil important? Because in addition to higher prices being synonymous with positive world growth, plummeting energy prices mean that numerous drilling and refining companies, particularly those in North Americas shale patches, are going bankrupt. That means the loss of thousands of well-paying engineering and processing jobs.

Bonds signal 44% recession odds: The stress is already manifesting itself in the struggling high-yield, or junk-bond market, which is indicating a 44% chance of a recession in the U.S. within one year, largely because of the nose-diving oil sector, Bloomberg reported.

Furthermore, an analysis published at Zero Hedge estimated that 80 U.S. energy firms have a combined debt of $325 billion. And, since 2015, 42 North American oil companies have sought bankruptcy protection.

Recall that the mortgage meltdown helped spur the crisis of 2008-09. Now some analysts are concerned that dropping oil prices could light the spark for a new Lehman Bros.-style catastrophe. Big banks brace for oil loans to implode, a CNN story reported.

Three of Americas biggest banks warned last week that oil prices will continue to create headaches on Wall Street especially if doomsday scenarios of $20 or even $10 oil play out, the story said.

Banks burdened with massive exposure: According to CNN, Wells Fargo has loaned more than $17 billion to the energy sector and is setting aside $1.2 billion to cover any potential losses. Meanwhile, JPMorgan is setting aside anywhere from $124 million to $750 million to cover losses. And Citigroup has built up $300 million in loan-loss reserves, with the danger of that rising as high as $1.2 billion if oil prices keep stagnating.

Right now the banking industry to downplaying the issue. Were not worried about the big oil companies. These are mostly the smaller ones that youre talking, JPMorgan chief Jamie Dimon said.

However, remember when then-Federal Reserve Chairman Ben Bernanke insisted that the subprime mortgage crisis was contained? Now we seem to be hearing the same sort of razzle-dazzle.

For the moment, these big banks are telling the public that the damage can be contained, commented Michel Snyder of The Economic Collapse blog. But didnt they tell us the same thing about subprime mortgages in 2008? We are already seeing bank stocks start to slide precipitously.People are beginning to realize that these banks are dangerously exposed to a lot of really bad deals.

Imagine 1 billion refugees: Moreover, if oil continues to fester or tank even further, the risks of geopolitical tensions and unrest could grow. Look how many countries in Africa, for example, depend on the income from oil exports,said the World Economic Forums executive chairman, Klaus Schwab, ahead of the groups 2016 meeting in Davos, Switzerland. Now imagine 1 billion inhabitants, imagine they all move north, he added, warning of unexpected consequences and a substantial social breakdown.

Falling oil prices and cheap gasoline are often touted as a blessing in our automobile-centric society. But todays energy crisis is showing us that the issue is much more complex, with serious implications for all of our portfolios. While this situation plays out, the most prudent course of action is to stay defensive with a healthy allocation of precious metals and rare coins.

If you needed any more proof that the world economy is slowing, then look to the latest growth report on the worlds second-largest economy, China. The International Monetary Fund already has, and its cutting its global GDP outlook for the third time in a year.

Chinas GDP for 2015 came in at 6.9% for the year down from the 7.3% gained in 2014 and 6.8% for the fourth quarter. The numbers verify that Chinas economy is growing at its slowest pace in 25 years.

This soft GDP announcement compounds to the recent data from China which has followed a negative trajectory and has consequently intensified the mounting anxieties around the slowing pace of growth in the worlds second largest economy, wrote Lukman Otunuga of FXTM. With China GDP growth below the golden 7% yearly target, the visible economic slowdown may have further elevated investors fears toward the failure of a series of aggressive measures by Beijing to revive growth and as such may reinforce the bearish sentiment toward the Chinese economy, Otunuga said.

Dr. Doom says China even worse off: Indeed, the Peoples Bank of China also announced Tuesday that it will inject more than 600 billion yuan ($91.22 billion) into the economy to help ease liquidity concerns before the Lunar New Year holiday on Feb. 8. Wall Street stocks bounced Tuesday on hopes of continuing Chinese stimulus.

But dont go believing everything the Chinese government tells you about its economy, contrarian economist Marc Faber said. My sense is that at very best, the economy is growing at around 4% per annum, but it could be lower, he told CNBC. We have this colossal debt bubble in China, and in my opinion this will have to be deflated through either huge losses in the banking sector or losses in the bond market for investors. In addition to that, we have essentially a stock market bubble, which now is being deflated.

Downside risks running high: As a result of Chinas woes, the IMF has now cut its growth forecasts for both 2016 and 2017, saying: Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy.

It cut its global GDP target for this year to 3.4% from a projected 3.6% in October, while also lowering hopes for 2017 by cutting its 3.8% target from 3.8% to 3.6%. The downgrades follow a 2015 that saw the global economy grow at its weakest pace since 2009 (at 3.1%).

This coming year is going to be a year of great challenges and policymakers should be thinking about short-term resilience and the ways they can bolster it, but also about the longer-term growth prospects,IMF chief economistMauriceObstfeldwarned. Unless the key transitions in the world economy are successfully navigated, global growth could be derailed.

Feds rate hike causing turbulence: The IMF cited three major factors for its gloom: the emerging-market slowdown, Chinas shift to growth driven less by exports and manufacturing, and the Federal Reserves gradual exit from ultra-low interest rates, Bloomberg noted.

Although the IMF is relatively confident about the U.S. economy, others are not so sure. The latest sign that the U.S. is slowing down can be seen in 10-year Treasury bond yields, which fell to around 2% this month. Deutsche Bank has even issued a forecast for sub-2% yields, down to 1.75%.

The American economy has lost its animal spirits, Hideaki Kuriki of Sumitomo Mitsui Trust Asset Management told Bloomberg. The potential growth rate of the American economy is going down. Longer term, yields may go down.

The odds of the Federal Reserve raising interest rates again this year after December 2015s landmark hike have fallen to 69% from 93% at the start of the year, according to the same Bloomberg report.

The bottom line on all this slowing growth is that central banks around the world, particularly the Fed, will be hard-pressed to raise rates and in fact will be forced to further devalue their currencies in order to revive their economies and stoke growth. Just look to Canada, which increasingly seems to be considering imposing negative rates to lift itself out of its oil-crunch-induced depression. The current landscape remains highly favorable for precious metals such as gold and silver.

With equity prices on the Shanghai stock market down about 40% since June 2014 and falling into bear territory last week, Chinese investors are renewing their love affair with gold.

In addition to its plummeting stock market, China is now on course to grow at its slowest pace since 1990. And with China devaluing the currency in an attempt to boost exports and reverse its downturn, money is flowing into perceived safe-haven assets such as domestic bonds, gold and the dollar, Reuters confirmed.

Faith in stocks fading: The news agency published some disturbing quotes from Chinese investors who have been snake-bitten by the startling decline in stock prices. I just have a small amount of money in the stock market. I had planned to sell when indexes got a little bit higher, but soon it dropped to this situation, said a 22-year-old investor in Guangdong named Zhou Junan. I dont have faith in the stock market any more.

Another unidentified investor in Beijing added, Except for gold, all other assets are just bubbles to me. I guess I am a pessimist. If there are really some global conflicts, even dollars and bonds could not buy a meal.

We notice a rise in gold investment whenever theres concern over yuan depreciation, said Richard Xu, the manager of Chinas biggest gold ETF. Buying gold also helps investors avoid risks in equities. It serves double purposes.

Increase in gold buying for new year: In addition to concerns about the bearish stock market and the weakening yuan, Chinese citizens also are buying in anticipation of the upcoming Lunar New Year holiday on Feb. 8.

With the spring festival approaching, there is some increase in demand as people are buying gifts. We expect the demand to pick up toward the end of the month as the spring festival is in early February, Shandong Gold Group analyst Shu Jiang told Reuters.

In the meantime, Chinas financial sector continues to take steps to boost the nations gold trade. Via the Shanghai Gold Exchange and the China Foreign Exchange Trading System, China has launched interbank gold trading at the beginning of this year, in an effort to open up the countrys bullion market, CCTV noted. At least 10 banks will be involved at the first-tier level, including the Australia and New Zealand Banking Group.

Before the new mechanism, banks were not allowed to trade gold with each other and could only buy the precious metal through the Shanghai Gold Exchange, CCTV added.

Whether Chinas economic crisis has the power to take down the rest of the globe with it is up for debate. But nowhere else on the planet right now is the need for gold so crucial than in China, home to an unbelievable bubble of stocks juiced up on massive debt.

In the wake of news that the Atlanta Federal Reserves widely watched U.S. GDP forecasting model had slashed fourth-quarter growth to a mere 0.6%, now comes an even worse downgrade, this from one of the worlds largest banks.

In the wake of dismal December retail-sales and other economic data, JPMorgan Chase has officially grown more pessimistic, slashing its fourth-quarter GDP projection to an annualized 0.1%, from a previous estimate of 1%, and lowered its first-quarter forecast by a quarter of a percentage point to 2%, The Wall Street Journal reported.

Weak retail forces downgrade: The exceptionally weak December sales figure is a bit of a head scratcher, chief U.S. economist Michael Feroli said. Job growth was booming last month, gas prices were down, sentiment measures were up, and warmer-than-normal winter temperatures prevailed last month, which historically tends to boost retail sales.

If JPM is right, and if the U.S. economy effectively did not grow in the fourth quarter, this would make it the worst GDP print since Q1 of 2014, and tied for the third worst quarter since 2009, Zero Hedge commented.

Moreover, JPMorgan also is cutting its expectations for the first quarter of 2016. We are also lowering some our outlook for Q1 GDP growth from 2.25% to 2.0%, its analysts wrote. While the inventory situation should turn to being roughly neutral for growth, the quarterly arithmetic on consumer spending got a little more challenging after this mornings retail sales figure, which implies flat real consumer spending in December. We now see real consumer spending in Q1 at 2.5%, versus 3.0% previously.

Recession chances now at 28.2%: Although JPMorgans growth figures remain in positive territory, the potential for further downgrades is possible, while a new poll finds that recession odds are on the rise.

The chances of a recession in the United States are at their highest levels since the fall of 2011, according to the CNBC Fed Survey, the news company reported. The survey also showed recession fears rising for the sixth straight time among respondents, and are now sitting at 28.8%.

Complicating this picture of Americas slowing growth are ongoing concerns about China as well as worries about slumping oil prices, which could roil the junk-bond market further as well as the big banks, and the likelihood of another negative corporate earnings season. The prospect of four straight quarters of earnings declines is staring investors in the face on top of the worst multiweek selloff for stocks in years, and the worst start of the year ever, noted MarketWatch.

Barrons experts see low rates ahead: The upshot of all this is that the Fed likely will be forced to backtrack on it interest-rate hiking program. The new edition of Barrons Roundtable recently weighed in on the current environment and thinks the Federal Reserve, which finally lifted interest rates in December for the first time in seven years, wont hike four more times during 2016, notwithstanding its stated intentions, Barrons summarized. Thats because market conditions simply wont allow it. Indeed, Fed Chair Janet Yellen might even be forced to ease again after lifting rates one more time.

John Rubino of DollarCollapse.com sees three possibilities for the Fed: 1) a new but modest round of QE; 2) an expansion of the existing QE program; or 3) a more ambitious and inflationary salvo that Rubino calls QE for the people, featuring negative interest rates, debt jubilees, and the helicopter money that Ben Bernanke long ago promised to use in case of full-blown deflation along with a nice selection of capital controls to keep unruly savers, investors and other enemies of society in line.

Under any of these scenarios, in which the Fed views its printing press as the solution to all economic problems, gold and silver bullion plus rare coins remain must-own assets for every portfolio.