Is a new Great Depression upon us?

The risk of a new depression - a sustained, severe recession - has struck fear into the heart of markets and driven monetary policy in developed economies since the current financial crisis began.

"We're in a very unfortunate position to be here," Richard Duncan, author of The New Depression, warned on CNBC's "Squawk Box Europe" Monday.

"When we broke the link between money and gold, this removed all constraints on credit creation. This explosion of credit created the world we live in, but it now seems that credit cannot expand any further because the private sector is incapable of repaying the debt it has already, and if credit begins to contract, there's a very real danger that we will collapse into a new Great Depression," he argued.

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