Investors who believe copper's recent price decline is limited to China are on the "path to ruin", warned Albert Edwards, Societe Generale's uber-bearish strategist.
"The creaks and groans in the copper price reflect the sound of the tunnel supports giving way," he wrote in his latest research note on Thursday.
Edwards went on to warn that central bank liquidity won't come to the rescue of any foolhardy equity bulls.
(Read more: The scary factors behind copper's price plunge)
"Decoupling" – the term used by traders to describe how developed economies are insulated from shocks in emerging markets and commodities - ranks as the "most dangerous single word in finance", according to Edwards. The slump in metal prices is not just due to some temporary local difficulties in China and these lower commodity prices will not boost consumer purchasing power in developed markets, he added.
"Do not rely on decoupling. Do not rely on central bank liquidity. Do not reply on hope. Hope is a false friend in these markets," Edwards said.
Prices of copper – the industrial metal used to make everything from cars to houses – have declined this week to a near-four-year low. The slide began as reports detailed how the bulk of China's copper imports are used as collateral, coming at a time when China's government looks increasingly likely to allow more defaults. A loan default would therefore liquidate the copper stash, flooding the market with more of the metal, and prices have been sent lower in anticipation.
Weak trade figures also weighed on the metal which is often seen as a gauge for the health of the global economy – hence its nickname "Dr Copper". For investors it has become increasingly difficult to separate how much copper imports are due to "real" industrial demand or how much is due to financing activities.
(Read more: Traders watch to see why copper is getting scorched)
Edwards made comparisons to the financial crash of 2008, when rising commodity prices and a surge in emerging markets was met with lackluster growth in developed economies.
"I seem to remember exactly the same sort of nonsense being spouted in the first half of 2008 - but in reverse," he said. "There were to be no spillover effects as decoupling had occurred!"
It's not the first time that Edwards has made bearish predictions on the global economy. In September 2012, he said the U.S. had already entered a recession and it wouldn't be long before the equity market reacts. He also warned about the "ultimate" death cross for the S&P 500—where the 50-month moving average falls below the 200-month moving average. Since that call, the has risen around 38 percent.
(Read more: Are Dr Copper's days numbered?)
With the Chinese government looking at slowing down a huge credit binge in the world's second-largest economy, Edwards says that the nation's officials are left with an ultimatum. China needs to offset the deflationary impact of these measures that are designed to restrain the shadow banking credit bubble, he said.
If it decides to postpone the credit tightening then it is widely believed to be on a one-way ride to a U.S. subprime debacle, according to Edwards. If it bursts the bubble now then it will cause "more limited pain", he said.
"Better to bite the bullet now as however bumpy the landing, it will be inevitably be worse if they postpone the pain," he said.
—By CNBC.com's Matt Clinch. Follow him on Twitter.