It's 2020 and total U.S. government debt is approaching $30 trillion. Moreover, it is probably the strongest major global economy on the planet.

Much of the debt in the rest of the world is priced at negative interest rates and a global debt crisis hits the wall. What happens?

This was the topic of a presentation financial writer John Mauldin gave at his Strategic Investment Conference last week in Dallas.

In such a scenario, there will be five major players in a global monetary chain. Sadly, if any single link in the chain breaks, it could derail the entire global economy.

First up is Europe, probably the most precarious link. Either Europe "mutualizes" all their debt with Germany's assent, balances its budgets and becomes the U.S. of Europe "or they will blow up," Mauldin predicted. But what, some might ask, are the odds of the French cutting pensions and slashing farm subsidies?

Next comes China, which view the 21st Century as its own "manifest destiny," a time to re-establish themselves as the world's greatest power, as it was 1,000 years ago. If it is to have any any chance of achieving that goals, the country has to get rid of cronyism, corruption and other endemic problems while transforming its economy to a more consumer-oriented society.

"But you have to do that from the bottom up," Mauldin noted. What are the odds of them achieving these three goals in the next four or five years?

Third is Japan, which Mauldin characterized as a bug in search of a windshield. It has been introducing one stimulus plan after another for two decades with nothing to show for it. Government debt exceeds 200 percent of GDP. What Japan has been doing is monetizing its debt on the back of the Bank of Japan, but to no avail. Can this go on for decades while the insular nation loses one-third of its population?

Fourth up are emerging markets, which have borrowed more $10 trillion in debt since the Great Recession ended. How they will react is anyone's guess, but it's more than likely they will act in their own individual interests, but those may diverge dramatically.

Finally, there is America, the "most fabulous country in the history of the world," as Mauldin calls it. He is most accurate, but getting Americans to agree on any strategy is virtually impossible. If a big bailout is an option, a lot more citizens than simply Tea Party-types are likely to be furious.

What will the Fed do? With all its core values and presuppositions, Mauldin fears it will consider negative interest rates.

Other speakers at the conference, including former Fed economist Lacy Hunt, questioned the legality of negative interest rates. Their collateral damage to money market funds, insurance companies and other major players in the financial system could be serious. And, as Japan
and parts of Europe are discovering, the benefits aren't readily obvious.

One can assume before they do anything else that central banks everywhere will keep printing money as fast as they can. But their record isn't very encouraging.

"I've never met a central bank economist who wasn't ten times smarter than me," Mauldin noted. But when it comes to predictions, they are 0 for 100." It may defy all laws of probability and statistics, but he's right.

In all likelihood, they will fight deflation, which Mauldin sees as a major mistake.

His major fear is that the world enters a totally chaotic currency war, one in which the dollar would soar to record highs.

A debt jubilee in which all parties forgive some of their debt might be the best solution. But every party would need to monetize their debt in a coordinated an rational fashion.

"One country can't do it, they all have to do it," Mauldin said. How high are the odds of that?