Stijn Schmitz welcomes Henrik Zeberg to the show. Henrik Zeberg is Head Macro Economist at Swissblock. Zeberg believes the equity rally is entering its final phase, with a major market top likely within the next quarter. He warns this will not be an ordinary correction but a significant downturn, driven by a weakening US economy that many market participants have yet to recognize. The consumer is in a particularly fragile state, with depleted savings, rising credit card delinquencies, and housing affordability at crisis levels, all pointing to an imminent economic rollover.

Zeberg explains that the current cycle mirrors past business cycles, where high rates and inflation eventually stall growth. However, this time the situation is exacerbated by the massive debt accumulation enabled by years of quantitative easing and artificially suppressed rates. The unwinding of these distortions will be severe, combining elements of both the 2000 tech bust and the 2008 financial crisis, but likely worse due to opaque private credit risks and the psychological impact of recent inflation on consumer behavior. Gold is expected to face headwinds initially as a liquidity crunch and a strengthening US dollar cause a pullback, potentially to $3,100 or lower.

However, once the Federal Reserve is forced to intervene aggressively with yield suppression, gold will enter a powerful rally, potentially rising fivefold in a few years and outperforming equities dramatically. Zeberg sees this as a buying opportunity for physical gold, recommending dollar-cost averaging. Silver and gold miners will also benefit, though they may suffer during the initial downturn. Zeberg advises listeners to prepare for a significant stock market decline, suggesting that taking profits now and developing a contingency plan is prudent.

While the US dollar may be the best near-term safe haven, precious metals and commodities will be the ultimate beneficiaries when the Fed steps in for real. He encourages following his work through Swissblock’s services and his Substack for ongoing analysis.

Timestamps:
00:00:00 – Introduction
00:01:04 – Macro Picture and Equity Rally
00:03:22 – Drivers Behind Market Top
00:05:27 – State of the Consumer
00:09:00 – Inflation and Business Cycle
00:13:50 – Debt-Loads Gov’t & Consumers
00:18:35 – How Bad Recession Could Be
00:21:45 – Equities and NASDAQ Decline
00:24:05 – Chain of Events in Crash
00:27:26 – Government Debt Intersection
00:33:54 – Energy and Oil Crisis?
00:37:00 – Gold Fate in Liquidity Crunch
00:44:24 – Gold Pullback Expectations
00:45:20 – Gold Miners & Upside?
00:49:20 – Stock Market Topping
00:55:00 – Concluding Thoughts

Guest Links:
Substack: https://henrikzeberg.substack.com
X: https://x.com/HenrikZeberg
Website: https://swissblock.net/

Henrik Zeberg is a Macroeconomist (M.Sc. Econ) from the University of Copenhagen. He is a Business Cycles student, Elliott Wave practitioner, and Chartist. He is the Head Macro Economist at Swissblock where he writes the Zeberg letter a comprehensive monthly macroeconomic report.