There's a deadly lag effect lurking in the bushes, says Ambrose Evans-Pritchard.

It occurs when rising unemployment intersects with more cutbacks in government spending, and it's due by the end of next year.

"What is so disturbing is that governments have not even begun the spending squeeze that must come to stop their countries spiraling into a debt compound trap,” Evans-Pritchard wrote in the UK Telegraph.

Evans-Pritchard agreed with French President Nicholas Sarkozy that, “Either we have justice or we will have violence,” a point thus far missed by Wall Street.

“If bankers know what is good for them, they will take a teacher's salary for a few years until the storm passes,” Evans-Pritchard said.

“If they proceed with the bonuses now on the table, even as taxpayers pay for the errors of their caste, they must expect a ferocious backlash,” he said.

“We are moving into Phase II of the Great Unwinding,” Evans-Pritchard said. “It may be time to put away our texts of Keynes, Friedman, and Fisher, so useful for Phase 1, and start studying what happened to society when global unemployment went haywire in 1932.”

The latest results of the Associated Press's monthly economic stress analysis of 3,100 U.S. counties show that the financial crisis continues to cause damage as unemployment, home foreclosures and bankruptcies increase.

Under a rough rule of thumb, a county is considered stressed when its score zooms past 11.

In May, 36 percent of the counties scored 11 or higher, up from 34 percent in April.