These days, it's rare that any proclamation of pending financial disaster can shock market participants -- but that's exactly what the Royal Bank of Scotland managed to pull off, despite likely wear-out on the topic. On Wednesday, the bank warned clients to brace themselves for a coming full-scale global financial crash as inflation freezes key nation's central banks. According to the U.K.'s Daily Telegraph, Bob Janjuah, chief credit strategist at RBS, warned clients to "be ready" for "a very nasty period" in the global financial market over the next three months as the effects of fiscal stimulus wear off and the impact of sky-high oil prices hit markets with full force. "I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names," Janjuah wrote, according to the Telegraph. "Cash is the key safe haven. This is about not losing your money, and not losing your job." RBS wasn't alone in sounding the warning sirens; strategists at Morgan Stanley (MS) sounded a similar -- if more muted -- alarm on Tuesday, suggesting that conflicting monetary policy between the European Central Bank and the Federal Reserve could end in "a catastrophic event," according to a separate report in the Daily Telegraph. "We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe," said the Morgan Stanley report, referring to an accomodative monetary policy in the U.S. as Ben Bernanke and the Fed have sought to bolster a sagging national economy. The ECB, in contrast, has held the line on core interest rates. The price for U.S. flexibility on monetary policy, and the ECB's comparative obstinance, could ultimately end up driving a wedge into the global economy, Morgan Stanley warns. The upshot is that any short-term gains earned in an attempt to guide housing woes to at least a softer landing could come with a very steep long-term price. For his part, RBS' Janjuah predicts that the S&P 500 may fall by more than 300 points by September, and that the iTraxx index of high-grade corporate bonds could soar in a renewed bout of panic on the debt markets. Disclosure: The author held no positions in any of the publicly-traded firms mentioned in this story when it was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.