Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction, financial journalist Ambrose Evans-Pritchard reports.

“In a report entitled ‘Worst-case debt scenario,’ the bank's asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems,” Evans-Pritchard writes in the UK Telegraph.

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"SocGen advises bears to sell the dollar and to ‘short’ cyclical equities such as technology, auto, and travel to avoid being caught in the ‘inherent deflationary spiral,’" Evans-Pritchard writes.

"Emerging markets would not be spared. Paradoxically, they are more leveraged to the U.S. growth than Wall Street itself. Farm commodities would hold up well, led by sugar."

Though the report stressed that, overall, debt is still far too high in almost all rich economies, it also clearly defined itself as “an exploration of dangers, not a forecast.”

“Inflating debt away might be seen by some governments as a lesser of evils,” Evans-Pritchard comments.

“If so, gold would go ‘up, and up, and up’ as the only safe haven from fiat paper money.”

The top performing forecasters in Bloomberg’s survey of 46 firms predict the dollar will continue falling next year.

The sluggish economic recovery and exploding government debt burden will weigh on the currency, they say.

Already the dollar has hit 14-month lows this year.