Europe is shifting away from a market-based economic model and is heading for Soviet-style totalitarianism, says Steen Jakobsen, chief economist of Denmark's Saxo Bank.

In a report obtained by CNBC, Jakobsen provides a series of extreme forecasts, including zero economic growth for the United States and a plunge in oil prices next year.

While Jakobsen acknowledges that the "probability of any one of the predictions coming true is low," he notes they are "based on a feasible — if unlikely — series of market and political events."

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As for Europe veering toward communism, Jakobsen says the eurozone will continue to suffer from economic stagnation.

As a result, the European Commission will push for a wealth tax on those with savings of more than $100,000, he predicts.

"We have gone full circle back to a Soviet Union model," Jakobsen writes. "It will be the final move toward a totalitarian European state and the low point for individual and property rights."

Europe is further away from a market economy that at any time since World War II, he says.

So how should investors react to the turmoil? Opt for hard assets and an exchange-traded fund that tracks gold, he says.

Meanwhile, Barry Eichengreen, professor of economics at the University of California, Berkeley, says that Europe's economic crisis appears to be shifting from debt to deflation.

If that's the case, "the European Central Bank has its work cut out for it, and there is nothing to suggest that it is up to the task," he writes in The Guardian.

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