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Markets may be dangerously underestimating what comes next.

NYU professor Scott Galloway, known as Prof G, says a chain reaction of geopolitical shocks, inflation and financial stress could trigger what he describes as a “$10 trillion wipeout” in global markets (1).

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The bestselling author and prominent economic commentator has built a reputation for breaking down complex market risks in plain terms — and for sounding the alarm when he sees structural cracks forming.

“I think we’re on the precipice of like a $10 trillion dollar wipeout,” he said on the Pivot Podcast, warning the damage may not come directly from conflict — but from what follows.

That kind of loss would rival some of the largest market drawdowns in modern history, including the 2008 financial crisis, when roughly $29 trillion was wiped from global markets (2).

For everyday investors, it could show up in shrinking retirement accounts, tighter household budgets and more pressure to protect finances.

Galloway argues the biggest risk isn’t the Iran war itself, but its economic aftershocks.

“I don’t think it’s from Iran. It’s from what comes after Iran,” he told Pivot.

At the center of his concerns is energy. Rising oil prices move through the global economy, pushing energy costs higher.

Galloway said that, while oil prices may not spike to extreme levels, “it’s going to be sustainably higher … elevated through the rest of the year.”

Historical trends agree with him. Violence in the Gulf has a decades-long, storied history of pushing oil prices through the roof, in part because the Strait of Hormuz plays a critical role in global trade (3).

Even without additional escalation, the effects of decisions already made could spread across the entire economy. That means the costs of everything from transportation to groceries could rise, squeezing consumers already dealing with higher borrowing costs.

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If energy costs stay high, Galloway warns inflation could return in full force, creating a difficult situation for policymakers and consumers alike.

“Inflation in some markets reignites. The Fed can’t cut rates. They’re trapped,” he predicts.

That pressure hits consumers first and markets soon after.

“I think corporate earnings are really impaired as consumers stop spending,” he added, noting that higher gas prices and falling retirement accounts could hit households at the same time.

But the slowdown may not stop there.

He explained that during downturns, “CEOs … throw in the kitchen sink” to make results look even worse and reset expectations.

In practice, that means companies may bundle bad news together — cutting forecasts, writing down assets or restructuring — so future results have a lower bar to clear.

While U.S. consumers and corporations could feel the strain, Galloway says the real breaking point will emerge overseas. Emerging markets are highly vulnerable to global shocks, especially when they rely on foreign-currency debt (4).

But that doesn’t mean Americans are insulated.

In today’s global economy, financial stress in one part of the world can quickly ripple back into U.S. markets — affecting everything from retirement accounts to borrowing costs.

Galloway points to vulnerable economies that rely heavily on imported energy while carrying debt in U.S. dollars.

“It’s just a toxic cocktail,” he said.

Countries like Pakistan, Egypt, Sri Lanka and Bangladesh could struggle to keep up with rising costs and debt payments — increasing the risk of defaults.

And when those defaults happen, the impact doesn’t stay local.

U.S. and European banks often hold or are exposed to that debt, meaning overseas losses can translate into tighter credit, market volatility and falling asset prices at home (5).

That can show up in Americans’ lives through declining 401(k) balances, more expensive loans and a broader pullback in economic activity.

“We get an ’08-style … ‘which bank is next?’ moment,” Galloway warned.

The key difference this time is that policymakers may have fewer tools at their disposal to respond. After years of stimulus, rate cuts and government spending, central banks may have less flexibility to step in aggressively. Especially if inflation remains elevated.

That could leave markets more exposed to prolonged downturns and slower recoveries.

Even if the worst-case scenario doesn’t materialize, parts of this chain reaction are already unfolding — and they can have real consequences for households.

Higher energy prices can push up everyday costs straining household budgets, while market volatility can weigh on retirement savings.

And if what Galloway describes takes hold, the fallout would show up in household budgets, job markets and long-term investment returns.

For many investors, that raises an important question: How do you prepare for uncertainty without overreacting?

In volatile markets like this, having a plan matters more than ever.

A financial advisor can help crunch the numbers and build a strategy that works for your specific situation — whether that means adjusting your portfolio, managing risk or preparing for potential downturns.

But hiring an advisor can be a lifelong commitment, with the potential to make or break your retirement, which means finding a reliable partner in this journey is crucial.

That’s where Advisor.com can come in. The platform connects you with an expert near you for free.

Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, as fiduciaries, the advisors are legally required to act in your best interests.

Just enter a few details about your finances and goals and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.

Because finding the right advisor isn’t always easy — with no one-size-fits-all solution — Advisor.com lets you set up a free initial consultation with no obligation to hire so you can find the right fit for you.

Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That’s where budgeting and tracking your spending comes in.

Building a financial cushion can also help you weather periods of volatility. Sudden job loss, surging inflation and unexpected health care costs can all set you on the back foot. That’s why stashing between three to six months’ of monthly expenses into an emergency fund is a core piece of financial advice for many.

If you’re looking to build an emergency savings fund, a high-yield savings account is one place to begin.

While the national interest rate average is an APY of 0.40%, online banks can offer you much more competitive returns — in some cases up to 10x more.

You can check out the Moneywise list of the Best High-Yield Savings Accounts and find an offer that fits with your savings goal.

Aside from an emergency fund, you may also want to make the rest of your portfolio more resilient to market shocks — war driven or otherwise. It can also help to have a reliable hedge in place for offsetting riskier assets.

Gold has long been viewed as a “safe-haven” during periods of economic uncertainty because it tends to hold its value when other assets, like stocks, come under pressure. During times of inflation or market volatility, investors often turn to it as a store of value that isn’t directly tied to corporate earnings, interest rates or fiat currency.

Historically, gold has shown a low or even negative correlation with equities during major downturns, helping diversify portfolios and reduce overall risk, according to research from the World Gold Council (6).

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of gold, making it an attractive option for those looking to hedge their retirement funds against economic uncertainties.

To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.

While some investors turn to gold as a hedge, income-producing assets like real estate can also help offset market volatility by generating cash flow even when stock prices fluctuate.

While owning property outright can come with a high barrier to entry, you can tap into this market by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord.

To get started, simply browse their selection of vetted properties, each chosen for its potential for appreciation and income generation. Once you choose a property you like, you can start investing with as little as $100, potentially earning quarterly dividends.

And once you’re an investor with Arrived, you’ll gain access to their newly launched quarterly secondary market, where investors can buy and sell shares of individual rental and vacation rental properties directly on the platform.

This allows you to buy into properties you may have missed during the initial offering or sell shares before a property reaches the end of its hold period.

With access to more than 400 properties in 60 cities, this new way to trade real estate offers flexibility and opportunities to access more properties each quarter.

Even better, for a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Pivot (1); Journal of International Money and Finance (2); Time (3); Global Financial Stability Report (4); Financial Stability Board (5); World Gold Council (6)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.