Nassim Taleb is a very smart man. He traded his way to wealth through options and derivatives. And his books have changed the way millions of people think about risk, fragility and probability.

You may have heard of his best-seller The Black Swan. It was published in April 2007 – months before the global economy began to crash. And it argued that the risk models used by financial institutions and lenders were faulty and would result in a crash.

He was right. Wall Street’s risk models were horribly flawed. They severely underestimated the chances of house prices falling. And they gave everyone a false sense of security. Taleb did very well on his bearish financial bets.

Today, Taleb is one of the few voices warning of another, larger debt crisis to come. In a recent interview with Bloomberg, he explained why more chaos is inevitable. (I am paraphrasing in some places.)

Where is the vulnerability? Is the world more fragile today than it was in 2007?

Of course it is. [The problem today] is absolutely the same disease [debt]. If you put novocaine on cancer, what happens? The patient won’t get better. He’ll feel better, but he won’t get better.

What was 2007? A debt crisis. We have more debt today… You don’t get a free lunch.

I strongly suggest watching the entire interview. It’s a sobering look at the sorry state of our financial affairs. Taleb notes that since the last crisis, debt has surged at the consumer, corporate and, especially, governmental levels. We papered over a debt crisis with more debt.

He points out that the U.S. government will pay more than $300 billion in interest on its debt this year. And rising interest rates will only increase those payments as the government rolls over its debt.

The United States Treasury is on pace to issue $1 trillion of debt just this year… And the already bloated deficit grew by 17% in the last fiscal year.

Taleb compares it to a giant Ponzi scheme: