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In this episode of Wealthion, James Connor of  Bloor Street Capital sits down with Henrik Zeberg, founder of The Zeberg Report, for a deep dive into his startling predictions for the 2024 economy. Zeberg forecasts a recession potentially worse than the Great Depression of 1929​​. He discusses the end of the money-printing era and the severe societal and economic implications of an impending deflationary period, followed by stagflation. Zeberg’s analysis touches upon the current state of the housing market, consumer sentiment, unemployment rates, and the Federal Reserve’s potential actions​​. He predicts a significant deflationary bust, the worst since 1929, affecting various markets including gold, Bitcoin, oil, and the broader stock market​​.


James Connor 0:05
Hi, and welcome to Wealthion my name is James Connor and today my guest is Henrik Zeberg. Henrik has some very controversial calls for 2024, including a recession, which will be worse than 1929. And we’re going to have a very detailed discussion with Henrik to find out how we establishes this severe correction. And, Henrik, thank you very much for joining us today. How are things in Copenhagen?

Henrik Zeberg 0:28
Things are great here. Still cold, but great. And thanks for having me on today.

James Connor 0:34
Denmark is a fascinating country. And I would love to travel there someday I recently read that Denmark just got a new king. And I was totally oblivious to the fact that Denmark even had a royal family. And I’m just kind of curious, are they as notorious is the British Royal Family?

Henrik Zeberg 0:51
No, that’s not my perception of them. I think that they have done pretty well over the years, we’ve had a key queen. So for 52 years now. And you know, she hasn’t put a foot wrong, I would say so. So it seems like we leave that to the British to do that.

James Connor 1:08
So we’re not going to see any documentaries on Netflix anytime soon?

Henrik Zeberg 1:12
I don’t think so. No, I don’t think so. So yeah, but we and we did have a new king, we got the Frederick the 10th. So he came came here on the 14th. So it was a big event and Denmark. Half the country, you know, turned up in Copenhagen and streets were closed and a fantastic event.

James Connor 1:31
Oh, that’s great. It’s always good to have something to look forward to. So let’s move on now. And I want to get your views on the economy. And there’s a lot happening in the world right now, just in terms of geopolitics, and also the global economy. And before we do the deep dive, I want to first start by asking you what most concerns you. Is there anything that keeps you up at night?

Henrik Zeberg 1:52
Well, yeah, I would say that, I don’t think people really understand how bad this can be, can get. We are in we are at the end of this the monoprinting era, I would say, at least that’s what that’s that is coming. And I am, you know, the societal fallout from what we can see with a potential deflation first, and later on stagflation could be quite severe. So so that, you know, doesn’t keep me up, per se, but But it’s something that I do worry about? Yes. So

James Connor 2:26
you made a good, great call in 2023. You were bullish throughout. And now here we are in early 2024? Where do you see the US economy going in 2024.

Henrik Zeberg 2:40
So for now, it’s the economy is still strong, we see that the labor market has not rolled over? Well, I have a business cycle model that I have been constructing constructed with, with Swiss bloc technologies. And what that shows us is that the leading indicators, which actually leads the economy to the next step, has been been declining for the last 20 or so months. And the last time we saw that was before the financial crisis. So what we see is that the, you know, the indicators that are telling us where we are going, so telling us, we are going to have a bad recession. And the coincident indicators telling us where we are right now saying, Well, we haven’t seen a deterioration in the labor market just yet. So what I would expect to see is that kind of continuation of what we have now, with the with a strong economy going into, let’s say, mid of 24. And But But But from then on, I think we’re going to see a strong recession set in, you mentioned that I thought you think it’s going to be worse than 29, I think or you know, the during the Depression, I think it’s gonna be the worst we have seen since 1929, in terms of the market correction, and, and potentially also the fallouts of the in the societal fallouts.

James Connor 3:57
And Henrik, maybe you can provide some more context on exactly what indicators you’re looking at. You mentioned, a number of the indicators that you’re looking at leading indicators have been deteriorating for a number of months.

Henrik Zeberg 4:10
So these are the ones from the Conference Board. And these are well known indicators. So you can go and you can look them up there. In the leading indicators, you will see housing permits, you will see initial claims, you’ll see others. And these are actually the ones that will tell us, as I said, you know, now the Titanic hits the iceberg, and we are going to sync but we don’t sync immediately. And if you check those sessions, you see if you look to the Conference Board, and I do some I have a we we were made a model or we created a model based on those. And if you go back in time, and you’ll see you know, back test all of this, you never you will see that every time you get a recession signal from the leading indicators in our model. For the last 80 years, you will actually see that they have never been wrong. They’ve never made a false false signal, never an extra Session call or any have never missed anyone so, so it’s it’s, it’s, it’s pretty strong and but this is not only the only one that the only thing that I look at, but but the leading indicators here are very, very telling in terms of what what comes and it’s just about the economy, the real economy, the labor market to start rolling over. And another thing I follow is the housing market, obviously, and the housing market is so important for all of us. So when we see housing goes up, go up, we will feel you know, better off well off, and then we will start spending spending more. And and when it starts to decline, and we feel we could get in trouble there, well, then we’ll see. See the opposite. And we will actually see a decline in consumption, which is then you know, going to, to make the decline in GDP worse as well. And right now, we see a worst setup than before the financial crisis, this much is very, very clear.

James Connor 5:56
But I want you to be more specific now. Because when you look at the economy, you mentioned, it’s very strong as around the GDP is growing at around 5% annualized the job market, also very robust. What indicators do you see that are telling you that the economy is slowing down and possibly rolling over?

Henrik Zeberg 6:16
So again, it’s about understanding what what is the steps in the business cycle that are three, if you look into the Conference Board page, which is where we base our business model, Cycle model on as well, you’ll see that the leading indicators that just broke off has been rolling over then telling us and if you go back in time, and you if you look at the model that we have created created, you will actually see how the top and leading indicators then lead to a top in the coincident indicators. But there is a lack. And everybody got last year was talking about the yield inversion. And now it seems like to have been forgotten. But actually, if people just look, they will see that at the bottom of the yield inversion, and we still have a yield inversion. But from the bottom of that, till the to the recession sets off. Normally we see like 12 to 15 months. And this time around the bottom in the yield inversion was in June of 23, which gives us around June of this year before we should see those a recession sets in. But everybody seems to have forgotten about that yield inversion now, because now things are going well, and the market slows up and all that. And as you said, also the labor market as well. But what people do not understand is that the labor market is kind of a lagging thing on the whole economy. One of the things that I’m sure a lot of the viewers here and I can feel myself also that we’ve been hit by is the the the rise in in personal interest payments. So rates have been going up Mangie also be going up. And this is the the iceberg, this is the very definition of the iceberg. So they have been rising of the plane personally and interest payments have been rising faster than we saw before the financial crisis before any crisis we have seen for the last many, many years, I only I only have data to see how far that goes back. And that is, as I said, the iceberg because Pete What people that do is that they will start to cut back on consumption on spending, because they want to meet their you know, on pay their mortgages, simply I mean, we’re just, you know, just human beings. And, and that is what’s gonna we’ll slowly get through the economy. And we have never seen a spike like what we’ve seen this time around. And again, we have never seen, you know, all the other indicators that I follow these were just two of them yield inversion and the interest rate that payments spikes. And there are others. I have seven teams recession indicators that will actually tell me, first of all, when we’ll get there, but also telling me that we are already seeing that slowdown. Is it visible to everybody now? No, it’s not because people will be looking at the market and they’ll be looking at the labor market and the and the housing market, but it will become visible. And I honestly do not understand you know, that we have, you know, famously or known economists and people out there saying oh, we will see a soft landing, I can promise you, you will not see yourself landing you’ll see quite the opposite.

James Connor 9:03
Okay, so you brought up interest rates in the pain that higher interest rates are causing to the average consumer. So let’s spend a little more time on this. And the market has put in a massive move since the end of November, the beginning of December, all based on the expectation of interest rates being lowered. And we have another Fed meeting coming up at the end of this month. What are your views? What do you think the Fed is going to do at the end of the month? Are they going to maintain rates as they are are they going to cut rates What are your thoughts?

Henrik Zeberg 9:36
I don’t think they’re gonna cop I mean they’re not gonna write raise them any higher that they they’re gonna do but they will do that they will do the polls that that’s that stands for pretty clear to me. Despite the fact that we actually see the two year market deal coming down quite slowly, which is really their guidance. I mean, what guides the Fed what drives the Fed is where they see the two year yield and and then they will fall Well, that pretty closely so, but I think in terms of because of the, as we’ve seen, also the CPI number coming out a little more hot than then you know, probably was, you know what they wanted, then they will probably still be, they will not be cutting yet. Also, because the labor market is as strong as it is, so there will not be a need for it, and they will still think, well, we need to orchestrate this soft landing, and we will just, you know, we the labor market still strong, maybe running a bit too hot. So we’ll keep the rates as they are at this point, but they will be cutting it, they’re cutting them and they will be cutting into them, because they see that the market rates, McGill’s will be coming down strongly, and they will see the deterioration of the of the labor market. And if the leading indicators again, speak, you know, for what we’re gonna see the decline, we’re gonna see in the coincident indicators, meaning the labor market and you know, employment and so on. Will will, it will drop very, very dramatic, you know, into, let’s say, June, July, August of this year. And that’s the time when I think so the loss of 24 will be old by cutting from the Fed, but they will be a little late because I’m not sure that they really understand the kind of severe blow that they have cost to the economy, the the dynamic effects of the economy, where you when you start to see inflation, will put a damper on the on the on the inflation by itself. And the Fed seems like they think they need to do all the work, the work is actually done by the economy, what they have done by moving the rates up as aggressively as they have, is to cause even more pain to to the whole situation they have caught, you know, they’ve made the hole in the Titanic even bigger. So I mean, that’s, it’s going to sink and it’s going to deflation, when when you know a year out from now, deflation will be in the in the books not not not inflation, or anything like that. It was, as I said, put many times it was transitory inflation, the Fed thought that they had let the inflation genie out the bottle, what they really did was that they have made a spike and and that spike would have corrected itself. But now, now we are with, you know, standing with the damages of the high rates that they have been been causing. So

James Connor 12:09
let’s talk a little bit about inflation, because the reason why they took rates from zero up to 5%, is because they’re trying to get inflation under control. According to the CPI got as high as 9% last year, and now it’s around 3%. But I think you and I probably both agree, the real rate of inflation is a lot higher, I think myself, it’s probably 10% or more. And this is also really killing consumers. I mean, you take inflation in conjunction with taxes, taxes are your single largest household expenditure. And then you throw on this double digit inflation, like you’re causing so much pain to the average. person, right. And so what are your thoughts about inflation? Do you think inflation is a whole lot higher? And is it going to be a real acceleration of inflation that really takes this economy down?

Henrik Zeberg 13:04
No, actually, I don’t think it’d be a real actual acceleration of the inflation I think, you know, there has been a spike which is causing you know, havoc and damage through the throughout the economy, as you rightly put it, and whatever level is that I don’t know I mean, obviously, there are some you know, ways of correcting or you know, calculating this so, but I think you know, if you look at to truth flip through inflation, as they call them, I actually follow them also for for the components of you know, inflation and the development of inflation I think that they come up with a pretty good you know, piece of calculation for what the current inflation rate is at. And I don’t have any better tools and tools than that, but you’re absolutely right that the the damage to the consumers from inflation from interest rates from everything we’ve had is not hasn’t been felt altogether just yet. It is something where it needs to get through into the cycle it means that you know, we need to start to see the layoffs in certain companies and then that will accelerate and then you know, people will really feel that they are underwater because they are you know, they have these high mortgages and what else so, so I think it’s about understanding that it doesn’t happen immediately. And so all we talked about when inflation was going up, it’s still here, it’s still awake, it’s still making his way down through the So speak the funnel or the whatever the down to the into the consumers and the way that they spend money and do not spend money and and you see that on luxurious goods I mean luxury goods they’ve down because you know, people is that’s the first thing you will put away you do not buy that you know, very expensive watch or whatever it is, but it’s really down to just you know, the simple setup for the customer on the consumer, how do they feel what kind of pressure is on them and right now, as you say, it’s it’s huge and it is causing the The Titanic sink at some point, it just doesn’t happen immediately as most people, I don’t understand why they keep believing that or thinking that should happen immediately. But but because it’s you know, if you just go back in time and and check history and look to the, to the on the to the charts, you will actually see that this is a very normal cycle. Yeah,

James Connor 15:18
you’re right, you made mention of the fact that a lot of these higher wages are still percolating through the system. I read recently that there was 22 major strikes in the US during 2023, a major strike being anything with over 1000 employees. And a lot of those contracts are were negotiated, are still making their way through the system. And this could also lead to further inflation. And another issue that you brought up earlier, and I just want to touch on again, is housing affordability doesn’t matter if you’re in Copenhagen, or Toronto, or wherever you are, the price of housing has just gone stratospheric. And as you know, I live in Canada, it’s a very small country, a population of 40 million people, our government brought in over a million people last year, half of which came to the city of Toronto. So that’s an additional 10%. You can imagine the pressure that’s putting on the infrastructure on housing, and so many other things. What are your thoughts on housing affordability, and what this is doing to the overall system?

Henrik Zeberg 16:20
Well, I mean, housing affordability hasn’t been as low since the 90 9080s, or something like that. And it’s way below what we had before the financial crisis. So so obviously, it’s going to make its way into the economy and thinking otherwise. I mean, when you when I hear people saying something along the lines of that AI will help us or that, you know, liquidity will help us know, because this is about the real economy, the real economy is about do you have a house? And how much is it? You know, value of that? How expensive is it to live in it? And do I have a job, and these are the two most basic things that we need to look out for everything else is, you know, pretty much a Wall Street chitchat, when you have this about liquidity and what the central banks will do. And all that, really, by the end of it is what the consumer how they feel. And right now, the consumers, the housing affordability, they do not feel good to the consumer sentiment is not good. And I think it’ll grow, it’ll become even worse when they start to you. And to see unemployment rates coming up, we still have to remember, unemployment rates at this moment are at historic low, low levels. So if they go up to normal levels, it will start to be felt. And there will be a you know, an add on effect on this. So I don’t understand the people that can look at what you just said here also with housing affordability, and with everything we see with interest payments and, and the like and then say, well, you know what, I think the Fed has got it this time around, they will actually, you know, make sure that it does we don’t have a recession. I can promise you that was what they said also, before the financial crisis, and before any, any recessions we’ve had, they will always say, we got to cover it. We know what we were right. We know, we overdid it. Remember Bernanke stood in 2008 in January and said, Well, I don’t see a recession at this point. And we were in the midst of it. So this about having faith in the in the central banks and the Fed and so on, and then manufacturing or orchestrating a soft landing. It’s not happening, what we see is exactly as you said, housing affordability, and whether the hit on the consumers from every, you know, sort of way is what will cause this, this cycle to really ended up that way. And we have to also understand that there is a supply side to it as well. So we’re talking demand here, the supply side of the companies are the you know, of the world, you know, where they have a fantastic 21 After Corona, we had all the stimulus coming out and everybody was making money. And the if you look at the retails stockpiles that they have, right now, you know, the the inventories of retailers and the likes the well they are 1617 20% above, you know, the long term rate or average, you know, average and that is the highest it’s ever been again, and that will tell us that somebody needs to reduce capacity because it’s not needed. And if you have been adjusting your capacity up to meet the kind of demand we saw coming out of the Coronavirus as well, you probably you try to you you’re ambitious because you thought you were doing well but actually it was just a boost from from from, you know, every central bank of the world and every administration of the world, which of course caused a lot of demand. That demand is now calling calling back. And you’ll see supply needs to do the same and that’s why the deflationary part is coming. That’s where we’re gonna see price decreases and in my setup and what I look at, I see you know, a setup where we will have the worst deflationary bust and this is back to what I said before it is since 1929. I don’t think it’s going to be as bad as the big, great depression. But since 1929, in terms of you know that we’re going to see a deflationary bust which will be have high negative inflation rates. So

James Connor 20:03
before we discussed the deflation and where you see prices going, why don’t we just summarize a few of your concepts? So first of all, we have this stratospheric inflation that’s resulted in this acceleration of interest rates, the fastest increase in interest rates that we’ve seen in economic history. And this is causing a great deal of pain to the consumer. And eventually it’s going to hit businesses in this is why you think the economy is going to pull back or contract. Is that correct?

Henrik Zeberg 20:36
100% Correct. That is 100%. Correct. That is the business cycle as it exists. That is how it has been working for years and years. And that is why when you look at the leading coincident and lagging indicators, also, and you will see that there is a very nice, it’s like a Swiss clock, you’ll simply see how it works it throw it away its way through. And as I see it right now, I’m being asked what what will change your mind, I will say at this point here, there are so many indicators I have seen, there’s no way it’s going to change my mind. I mean, at this point here, if we’re not in a recession by in a year’s time, well, then I have to reevaluate, but I think, you know, it’s more likely that we’re going to see a very strong two year acceleration because of the things you just mentioned there into late part of 24.

James Connor 21:21
So let’s examine your scenario in more detail and what it’s going to do to financial markets, and also this whole concept of deflation. And why don’t we just start with the s&p it’s currently around 47 or 4800. Where do you see the s&p going up until June when you think the economy is going to start slowing?

Henrik Zeberg 21:38
Well, I have this, you know, outrageous talking, which I’ve had ever since October 23. And I said when 66,100 is still my target around that level, based on the technical setup that I see based on Fibonacci extensions, and so on. And I know it’s a very, very strong move going into the two to June, very, very strong move, could could last a little longer, perhaps Yes. And I would think also that the US markets would be the last standing, we normally see that that we hear in the media that well, the rest of the world doesn’t look too good. But we actually see that the US is doing well. And the old US will make sure that the rest of the world doesn’t fall into a recession. That doesn’t happen. And again, it’s always the US that then follows the rest of the world. But I think we will enter June, middle of this year, let’s say we will see a very, very strong move in the markets, it will accelerate it become even stronger than we’ve what we have seen last year. And that is the normal normal behavior. Also, as we see now people thinking, you know, the narratives out there already, that’s what we’re up against now. That is that, you know, people saying the soft landing is here, we believe in the soft landing. And Henrik, just see, you know, you you call the the the TA the you call the the rally, and you got it. And that is actually telling us that we are getting into a new business cycle and we’re moving higher. And and you know, it’s a new bull market, and it will go on for the next until 2030 and whatever. What we’re seeing is the normal, you know, narrative now developing from very pessimistic because we have had an infant inflation spike. And and then people are getting back in saying, Wow, we let’s party. And and I think when we start to see, you know, significant levels above all time highs on the s&p, which we’ll see soon, and and the same with the NASDAQ, where we already had all time highs. And when we start to see the crypto rally, which I think is you know, the we’ve seen Bitcoin, but I think Bitcoin will go up a lot more from here, and I think we’re gonna see all coins, you know, joining and not not only joining the party, but actually, you know, develop into a larger euphoria than we had in 21. Well, if you see all of that, it will be very difficult for people to stand in the midst of that and have earned a lot of money and still understand that the business cycle is actually rolling over. So 6100 on the s&p 27,000. On the on the NASDAQ, maybe even 33,000 could even also be the one of the case for for NASDAQ. I’m a little bit out there, but a lot higher from where we are. And even as we start to see some of the some of the Nikkei, for instance, getting closer and closer to my target off of a very, very extra top as well. So I think there’ll be some foreign markets outside of the US which will do not so well, getting into, let’s say, April, but I think the US markets will stand for a little longer, and then we’re going to see the decline. And it will not be felt on first week and the second week, but I think by the end of this year, we will definitely have felt it. And I think also the Fed will start to react to that when we when we start to see you know levels or the markets were declining strongly.

James Connor 24:50
So just to summarize, you see the s&p going from the current level of 4700 4800 up to 6060 100 by June we Just a move of 25 to 30%.

Henrik Zeberg 25:02
Yes, I know it sounds strong and fast, I don’t. But if you look at the current, you know, slope on the curve, so to speak, I mean, it’s a continuation of that. What we have seen ever since the October lows, if you continue that it’s a, it actually shows us that that is the that could be the pace that we could be expecting. And the next level here, I’m still expecting that when you see all time highs coming in on the s&p, and its means and it stays above that, I think the buying, you know, the push will come from from there, because that seems like that is when people will start to understand that this is going much higher.

James Connor 25:40
And so you touched on Bitcoin, and we have to bring that up, because that’s strongly correlated with the s&p and the NASDAQ. And so it’s currently trading, I think it got up to $48,000 ahead of this ETF announcement by the SEC, it’s pulled back a little bit, but where do you see Bitcoin going between now and June,

Henrik Zeberg 26:03
when the targets are still around 415,000 as a minimum, maybe as high as 150,000. And again, it sounds like a crazy move with you know, with the amount of time but that is normally what we see also going into and again, we have to understand and remember that we are in you know exponential times in terms of you know, when when the party gets going, it’s really gets going and that’s where we start to see the whole FOMO develop and so on. So I think you know, Bitcoin 115,000 would be my minimum target to be reached around that time.

James Connor 26:35
Yeah, I’m one of those people every time I look at Bitcoin, I have FOMO. So I might be getting involved here in the next few weeks is what I’m saying. Okay, so Okay, so we talked about the s&p, we talked about the NASDAQ and Bitcoin. What about gold? What do you see gold doing in this current environment?

Henrik Zeberg 26:57
So I know I’ve famously been called out that I did my I didn’t get my gold call correctly. And And yet, we haven’t seen you know, gold, rallying to no 10,000 or whatever the gold bugs have been saying, I am myself a gold bug. I think gold has a big place in the monetary system. But there’s good times that there are bad times to hold gold and bad times will be the times where you see liquidity crunch. That’s the time where, you know, there’s a purpose why people there’s a reason why gold is what you’re supposed to hold is because of you know, the long term trend, you have inflation, of course, but in terms of prices, you need to have liquidity you need to be able to pay off your debt and what else and you need simply to you know, yeah, liquidity US dollars is what you want to hold there. And to get that, you know, you don’t want to you probably see gold and silver and miners getting sold off. So I’m very bearish, the precious metals at this point here. Could we see gold reaching 2500? Before we get there? Potentially, yes. But do I think we will? No, I don’t I think we actually have seen the top and I think gold is trending lower from here. But again, could I be wrong with that? Potentially? Yes. But I still think 1200 1200 50 would be the like the Yeah, the the bottom around that level. For gold, we could even develop to lower levels. But But But gold is going to to decline and crash into a liquidity crisis. And we saw that also in during the financial crisis we saw from March of 2008 until September of 2008. We saw gold declining 33% And we saw silver declining 60%. So I don’t understand why people are just saying oh, well, we need to hold gold because the crisis is coming actually you need to understand when there is a crisis, you don’t want to hold precious metals you want to hold the Quiddity US dollars and then you want to get into that when when the Fed steps steps back in so it’s about the timing of that and people again can just look to back in the times and they look into the deflationary bust we have had well you will see gold do not do tremendously well there during those busts.

James Connor 29:00
And so just to clarify, you see gold you think gold has already topped out at around $2,000 An ounce

Henrik Zeberg 29:09
as I said I again, I mean I’m not trying to time that I’m trying to time that the one I’ve seen the bottom so I but I think there is a chance we could have seen the top in gold at this point yes. And then they will see the declined into into around 1250 whereas there will be a rather strong decline. I mean, as as you know the deflationary bust that I see developing is going to be very very strong I can I don’t know how I can put this this is this will be you know days of miners, you know what 567 8% on the on the stock market. We will see the you know, stops on the market. We’ll see marketing and taking the pulse and all that and I think there will be a lot of panic, there will be a lot of panic for crypto enthusiasts, and there’ll be a lot of you know, all this and, and again, gold will not do well in that environment. The environment workers will do well is when they when we get to the next phase is when the Fed steps back in not just with rate cuts but comes up with their win on other fantastic solution like printing money again or doing something else and then we’ll see what gold then does because then I think we can easily see gold at 10,000 But but there is there’s another part of bottom coming before we see gold going to those levels

James Connor 30:23
so the gold bugs have had a very tough few years so you’re saying it’s going to get a lot tougher for them

Henrik Zeberg 30:30
Yeah, I think the I think it will and I you know, I think there’ll be blood in the streets before we get to the point where where gold will be will be you know to pick up again if you’re a long term investor and you say well I can sit through a crash from current levels to 12 150 that’s that’s good and fine you know because gold will come up again and it’ll do so fantastically fast but if you look at it and again you analyze you want to have you want to be long gold when silver is leading gold ore and our miners are leading is leading gold and you don’t see that you’ve seen actually miners and you’ve seen silver down a lot this year that down a lot since 2011 Gold is the only one who’s made a new high on it. But that’s normally not a good sign for the for the gold market you want to see that Silver’s leading gold into new highs and you want to see the miners leading it and so right now we are in a bounce I know that sounds weird but we are in a bounce from from the first decline we had in the in the in the gold bear market that started in 2011 then we’ve seen this bounce bounce into 2020 which was higher than 2011 I get that but but the next decline is going to be the worst and I think that’s that’s where people will you know Will we need to hear a piece of people saying something along the lines of You know gold will will will never have its roll again and you know all these things and then it’s time for to to get in but and I want to see also that we start to see you know the recession is clearly and they’re like what we saw and when we have the when we have some of the black swan events that I expect into the deflationary bust that’s when we should start looking at Gold

James Connor 32:06
yeah you’re right about these gold miners they have been horrendous here in the last few years and even when you take even if you look at the price of gold here and the move we’ve seen in the last few years adjusted for inflation it’s still very disappointing and and then when you compare it to something like Bitcoin oh my god yeah,

Henrik Zeberg 32:25
exactly. And I think you can see Bitcoin will go to 100 times the value of gold before we get to the bottom of gold so So and again that’s because we need to understand and I and again that comes down to the the talk about Bitcoin becoming the new gold and that’s not what we see right now we see actually the opposite we see that you know, Bitcoin is something you get into when you can become really risk on and you want to you know you you want to be part of you know, a risk on rally and then you see gold is not tremendously doing well not so well there. And I think you will see that there is a time for gold that will be when we get to the into a recession and the Fed steps back in where I don’t think Bitcoin will do tremendously well actually, I think it was going to have a really tough time so so again, there will be different time for this but but bitcoin is not a new digital gold. I mean, it’s not behaving like that. Let’s put it like this. So

James Connor 33:16
we have to talk about oil. This is a big driver of any economy and it’s been very volatile in the last few months, topped out around $95 A barrel now it’s trading in the low 70s and this is in spite of everything that’s happening in the Middle East and also Ukraine. But what are your views on oil in this deflationary environment?

Henrik Zeberg 33:38
No, I mean oil is the is the driver of inflation and if you have a deflationary environment you will see oil coming down strongly and I wasn’t too surprised to see that oil turned when it did I wasn’t too surprised to see the decline we’ve seen so far and if we take it from the 101 30 we saw back in midst of mid of last year I think it is well we down now at 70 Something I haven’t looked at it today and well that is that I would say was is normal what we saw back then was the spike because of the of the artificial created bounce and Spike and the huge amount of stimulus coming out into a supply crisis then you see oil coming up you see inflation rates coming up. But now you see gold down sorry oil get down again. And I think you’re gonna see it decline much more and I still have a target below $10 Going into the deflationary bust. Would it be as bad as during the corona crisis? I don’t know but I also had a target below $10 Before up you know from 2019 into I didn’t see the corona crisis coming but I did see a crisis I did see a create a recession coming because the again the the business cycle indicator sets told me that this time around, it’s going to be a big a deflationary bust and an oil will do not well Because oil will do well, when you see the economy is flourishing. And right now at this point it has come to a standstill, but it’s going to be bad times in the economy. And that means that oil will go a lot lower and I say, below $10 will be my target into the into the deflationary bust.

James Connor 35:19
And we’re where do you see oil going from now until June, you see the market topping out or the economy slowing?

Henrik Zeberg 35:26
Yeah, so I, I There are two ways actually, and this is easy, either it goes up or goes down. Right. So it that’s very easy. But there is in terms of the technical model I have its you know, there could be a bounce it but I don’t actually that’s not my favorite thesis at this point, I actually think it’s just going to decline and it’s there are some levels it needs to break through at this point as I remember it. And I think when it drops there, you know, there will be a larger decline. If I look at the mark deals, we are in for a huge decline in market yields, which set in by let’s say March April, something like that. And I would not expect to see that unless I also see a decline in oil. So, so I think there will be a lot of decline there. And then the again the bounce at some point and then the final decline into my into my target. But But again, I am short term, I could see two way two roads here and two paths. And, and but but my favorite scenario is actually that we do not see much more of a of a bounce, and then we just continue lower. Yeah,

James Connor 36:31
it does appear to be very weak. So okay, so let me just summarize here what you are suggesting investors do from now until June it’s risk on. So stay long. The s&p Stay long the NASDAQ’s they love Bitcoin. But then when the economy starts slowing, and we start getting this pullback in all the financial markets, how, how would you suggest or what do you suggest investors do to profit from this or protect their wealth.

Henrik Zeberg 37:00
So there are different ways to do that, obviously, first of all, you need to have liquidity, you need to have the US dollars, that’s not the time now, because I still have a target, which is around Dixie 494 on the Dixie. So I don’t think that’s the time now. And so that will be the risk on face. But when you get to the bottom of that you need to hold liquidity you need to have cash, and cash will absolutely be king at that point. I mean, that’s that’s when the markets are dropping, you know, just holding cash at 0% You know, will be good or even a positive you know, rates. And there will be also there are ETFs out there you can you can invest in, you know, going against the Euro versus the dollar, which will be one way of doing it. And also TLT, you know, US bonds, German bonds, something like that hold as well, and start to scale more and more into I see the TLT can move from the current levels around 90 or 98, or something I’m not really sure, but but then I think we can go up and see. And we can see a level around 200 of that. So I think we can easily see a doubling of those prices, so to teach will be good. That’s during the deflationary face. And, and then also you can short the markets, if you will, but that’s of course more risky. And that you need to have the stomach for that, because there will be a lot of volatility, I will mean I will go against you know, every they’ll hurt again, when we hear start to hear that Bitcoin will hit the you know, 1 million or 2 million or whatever they come up with. I think shorting Bitcoin at some point will be a fantastic opportunity and the miners, Bitcoin miners and what else we can do. I mean, there’s so many opportunities there too, on the short side of the market. But that, of course is more the risky game, the more safe game will be to enjoy the rally in the market, understand that there’s a time that there is an end date to this and then understand that you need to have liquidity you need to be into TLT send us bonds and then German bonds and the likes. And then and then you know stay safe there. And understand also at 0%, you know will be a good return also sometimes or even low percent. But that will be difficult for understand for people to understand who have come from this, that I’m doubling my money on crypto in a one or two weeks. And then you have to settle with you know, a small percentage is going into a crisis. So a lot of people will be caught on the wrong side of this I you know, and that is just unfortunately, the history and the nature of things. And when I talk about this with a recession now I can start to feel that people are in disbelief even though I would say the signals are clearer than what we saw before the financial crisis. So I think it’s weird to say that people do not understand this with the business cycle. So but there are ways to, to hide out and to make sure that you’re you don’t lose your hard earned money. So

James Connor 39:42
Henrik, we most of our discussions have been focused on the US the largest economy in the world, and why don’t we touch on China now second largest economy in the world. And of course, we never really know what’s real and what isn’t coming out of China, but a lot of the narrative a lot of the commentary we’ve seen is that there is a definite slowdown there. And there’s issues with the real estate market, both residential and commercial. Do you have any thoughts on China and what this might mean to the global economy?

Henrik Zeberg 40:12
So I think that China is, is, you know, is a, are isn’t big problem problems or troubles, I mean, absolutely. But there is many other places around the world, I don’t think, you know, Europe looks fantastic, either. And, I mean, actually, I think the US for now looks, you know, better than most other places around the world, so, but China is obviously obviously have, you know, problems and they have tried to create this fence or more this mirage of a, you know, continuous growth and by, by building, you know, being, you know, manufacturing the largest property to bubble in the in history, and, and now we see the consequences of that, I mean, the consequences is that, you know, at some point, you know, people are not gonna move into those provinces, and they have to, you know, tear them down again. And that means that the financial growth that you saw the the growth, the economic growth, you saw years back, was actually artificial. I mean, no surprise to anybody, but it’s just because it’s been going on for such a such a long time. So China will, will be in trouble. And, and I think a lot of places around the world will be as well. And we can just hope, again, that this will not create some outfalls, in terms of, as I said, societal, I’ve come to a geopolitical situations or anything like that. But I do fear. And when you ask me, what keeps me up at night, this is one of the things I mean, because you when you start to have a large economy like that, where you have so many people moving into the middle income class or, and then they will start to see the that they actually maybe lose that status again, or starting to become poor again, well, they will want to see action, they want to see something getting done by it. So. So I think China is a is an example of what not to do in terms of how to create growth, first of all, second of all, well, it is going to is will show us the way for you know how bad things can be. But again, they will not just, you know, let this go. And that’s why I think there’s another go in terms of the market as well as also and I see people that are saying get out of China, I’m not too sure that you want to get out of China’s Chinese stocks at this point. And you actually could see a huge bounce in the in the Chinese stock market indices going in again to the next six months here, because you’ll see the dollar pulling back and well what else we see. And I think a lot of the hype we’re gonna see in in crypto and the like is going to come from the Chinese central bank inducing a lot of money again, so we will see a lot of liquidity coming in from that as well.

James Connor 42:41
So you’re very positive in the short term risk on between now and June, and then you become very negative, okay, and then it’s risk off. Now, if there was something that might derail or change your thesis between now and June. So maybe you don’t foresee this major correction in this deflationary environment, what would it be?

Henrik Zeberg 43:05
Well, there are two ways either It either goes faster, or we don’t see the recession at all. And if it needs to go faster? Well, I could be mistaken on how fast it could go. I mean, how fast we could actually get to it. And then when I say June, I think it’s a, it’s already a stretch in terms of when we see the markets up. But let’s go with June, I think that’s probably June will probably be the month of the beginning of the onset of the recession. So but in terms of not seeing it, if we’re going to get into we will not see the recession, and the people calling for a new bull market, a new, you know, economy just keeps on growing here. Well, what do I need to see, I need to see my leading indicators in my business cycle turning positive immediately, and I need to see a bounce in the, in the coincident indicators at this point, but that wouldn’t be the first time in 80 years. So I do not expect that it will be irrationally irrational of me to expect that to happen. But that would be needed to see we need to see that the dollar starts to decline in and actually stayed stay low and do not you know, begin the rally, I expect after the Dixie Reed hit reaching 90, which is my target, well then I think dollar rally will come which will take it to 120 years, like in that region. And, and and that we cannot have because if that happens, then you will have deflation or bust. So I need to see the dollar continuing down from here and that’s unfortunately also not what I see. So So I think it’s very much you know, baked into the you know, to the K here we got what we got we have tried to to counter a supply crisis by pouring money into onto it and creating demand and that has created a new new situation. And now we will have to live through that face. Unfortunately, I mean, because it will create a lot of you know, challenges for people and havoc in the economy. So I don’t like it. But what I have to you know, look at what I see and and and I got you know So many indicators telling me that a recession is coming. It’s not here yet. It’s not here yet. And I want to emphasize that, but it’s coming. And with Europe, looking as subdued as it does already, and the China as you also mentioned, so where are you going to see come from if you’re if all of a sudden us is starting to decline as I expect it to. So, so but but leading indicators moving up, and the Dixie keep falling and declining and staying, you know, low, would potentially change my mind, but I just don’t see it coming.

James Connor 45:32
When I hear your targets, I don’t think they’re outrageous. I mean, the s&p was up 20%. In 2023, the NASDAQ was up 40 or more, Bitcoin was up 170%. And a lot of those moves came in the last few months of the year. So I think your actual price targets are not outrageous, the one thing I would take issue is would be the timing, and how fast is going to happen.

Henrik Zeberg 45:57
Fair enough. And, and you know, Timing can be difficult. And I would I could be able to show here in six months time and saying, Well, maybe a couple of more months to go. And I talked to Raul the other day on run Niner show and I said, Well, I think if you if you do an interview, again, in a year’s time, we will definitely see it. Again, the timeline or the timing of it comes from what I see in the, let’s say in the yield inversion, for instance, and other things. So, but I haven’t seen the deterioration in the labor market yet. But that can come really, really quick. That’s what I want to say also, so. So when I don’t say that, when I say there’s no recession yet, and I’ve been surprised also to see, you know, the strength of the labor market, but it that can turn unfortunately, rather fast, because all the leading indicators are telling you so and they have been down, as I said, 20 some months, I think it is now and that up to the financial crisis, they were down a similar amount of time, before we saw that kind of crisis unfold. So we are getting, you know, it’s the upturn of the market move higher, and the economy, you know, strong economy is getting long, and it’s too thin here. And I think we will, you know, the deterioration will come through the, you know, the, the indicators, or through the, the, the examples we talked about with housing and with personal payments, and so on, so forth. So, but But I hear what you’re saying in terms of the timing, and, you know, time will tell.

James Connor 47:27
So I want to ask you about your comments about 1929, us have said that the resulting pullback is going to be similar to or worse than what we saw in 1929. And I just want you to clarify this. And just to provide some more context to our viewers, the Dow peaked in September of 1929. At 381. It bottomed at 41 in 1932. So that was a pullback of 89%. But why do you think it’s going to be like 1929? And why not ’08/’09?

Henrik Zeberg 47:58
So So I say it again. So since 2.9, and 29, I just want to emphasize that I think it’s coming over quite a few times. And I need to say that it’s since 1929. But it’s actually based exactly on the way you what you’re looking at there in terms of the the client and the size of the client. And if I look at the s&p, I could see a market decline going from 6100, to maybe between 15 to 1800. So 1508 1800. And if you look at that, that’s a sizable decline. And then people say yeah, but that’s not so bad, because you’re actually seeing, you know, we’ll be going up so much over the last couple of years here, then I’ll say exactly, and that’s why you say the percentage decline will take us back to 2015, or 16, which is not so bad. But that’s the decline I’ve seen in the s&p, if I look at the small caps, I see more of a 80 90% decline in those when we get to the top that I expect. So not from current levels, but from the top that I see. And also if you look at elsewhere, and one of the things that I do not understand people also maybe you know, miss out on here is that, well, we have a we have a crypto market also where I think a lot of the devastation will come from and I think that if I’m right on the size of the front at the top of the of the of the the peak here coming peak, when I think that there’ll be a 5.4 point 5 trillion crypto market maybe as high as 5 trillion chips a crypto market and if that is going to be almost you know, decimal decimated as a minimum but you know, maybe cut down to barely nothing I see Bitcoin declining a lot and I see some of these Kryptos you know, getting annihilated, then you’ll see a lot of money in money falling out of the system. I see a lot of startups business startups that we’ve seen over the years, everybody has been searching for yield. If you’re a private equity fund, you’ve been you know, pounding the table and say why can’t you find you’ll find yield from me go buy this company and what else and we have seen these You know, outrageous valuations on companies, you know, across the, across the globe. And that has been running for some years, but some of these businesses simply do not have a sound business case. So all of these I mean, the whole mis allocation of money, which comes from too low interest rates, and you know, we don’t have that right now, but we have had it and if we get down to these levels, again, in a recession is going to come you know, to make sure that we Yeah, that the whole situation come home to roost, because, you know, the fallouts will be that there will be no more funding money for it and no venture money for for the startups. Crypto money will be annihilate you will not hold, you will not have a million dollars in your pocket in your wallet any longer. And, and what else have you so a lot of people will lose a lot of money. And what I also see and you have to understand that there, I see a two steps to this, I see a deflationary phase, which where the central banks will start to pour money on to it again. But the thing is, we have had the free lunch in 2008, where you could actually throw free money on it. Well, we’ve seen this time around when we saw the corona crisis was that the real economy didn’t really turn immediately. And it took you know, it took a little while before we actually started to see the real economy making a move on it. And that’s why we saw inflation coming up later on. So the what I’m expecting us to see at this time here is that the real economy will actually turn much much slower. And because pouring money onto the on the poll problem is done because you want the central bank’s they want us to stop taking on loans again. So you know, go take this loan, it’s cheap, spent money. But if you’re just getting it just gotten hit by you know, high interest rate payments, interest payments, you don’t want to put more debt on immediately. So it will take a while to convince the consumers to start spending again, even if you pour a lot of money on this liquidity will not work in the real economy unless you get that exact, you know, behavior out. And that is what people do not understand. So they’ll just throw money on it, and then you’ll have the magic will work. No, the magic comes through the consumer. And if the consumer doesn’t pay in, you know, you want doesn’t want to do it because he he’s unemployed now and you want to save his money, make sure he doesn’t, you know, get in that situation again, well, then it takes time, and free money will not help it. But what we could see is that free money will then start to float into and chase some other asset groups like you’d like commodities. And that’s why I think you could get to a situation where the first phase will be in stagflation, sorry, deflation, sorry, deflation first, you’ll then see the Fed response. And then you’ll see a stagflation unfold for a couple of years. Because you’re actually not seeing the bounce in the economy, the bounce in the economy, and that you cannot stimulate, you’re out. If you haven’t seen a real stagflation for many years, we did see some of it coming through. And when was the stagflation we solve after the corona crisis. But we did see when both stocks and bonds going down, we saw pension funds having a lot of problems, which is another thing I think we’re gonna see. Because if I’m writing my thesis, we’re gonna see exactly that scenario, which will just be much bigger this time, and you’ll see pension funds having a lot of problems. And that that will cause the the double whammy, so to speak in terms of this crisis, but this is a little further out. So we have to understand there is a deflationary bust. And of course, you’ll see the Fed coming back in, but how will the economy react to that stimulus? Will you as an unemployed person? Maybe you lost your home? You know, God forbid, but still people will? Will you then say, Yeah, I want to take on that extra loan, because now I want to spend money because the Fed tells me to, I don’t think that’s what you want, what you want to see. And that’s the real nature of the economy, which people do not understand that as I see it. That’s the real business cycles.

James Connor 53:54
Now, you raised some very interesting points there. And and we’re all feeling a lot of pain right now with these taxes exorbitant taxes with double digit inflation. And now we got high interest rates to deal with. And so it’s going to be quite interesting to see how things evolve here in the next few months. And Henrik, as we wrap up, if someone would like to learn more about you and your services, where can they go?

Henrik Zeberg 54:18
Well, we got the Zeberg report, where I on a weekly basis set and explain about the markets what I see from a holistic perspective, meaning I look into all markets, so to speak, and then you know, commodities and bonds and equities and Kryptos and so on. And I draw up this holistic picture of it where all these markets needs to go in sync. And in order for me to have an outlook then I create a narrative on that. That narrative I explain on my weekly shows, live shows where you can also ask questions on the on the show and ask for specific charts to be to be analyzed. So So that’s on the the And, yeah, that’s where you can hear more and then I’m on Twitter. My My handle is at Henrik Zeberg. And that’s where you can see hear more about my thesis, my outrageous thesis.

James Connor 55:09
Well, I really enjoyed this discussion today, Henrik, and I want to thank you for spending time with us. And we’re going to have to do it again later in q2.

Henrik Zeberg 55:18
Absolutely. And thank you very much for having me on today.

James Connor 55:21
Well, I hope you enjoyed that discussion with Henrik Zeberg. You might not agree with a lot of his calls. But that’s what makes a market is a difference of opinion. Some people are bullish, some people are bearish. And if you have any other suggestions on who we should interview on Wealthion please let us know in the comments below or send us an email we would love to hear from you. And we’re always looking for new ideas. If you are trying to figure out how to prepare for your financial future during these uncertain times. Consider having a discussion with a Wealthion endorsed financial advisor at After providing some basic information Wealthion will put you in touch with a vetted adviser. There’s no obligation whatsoever to work with any of these advisors. It’s a free service that wilfy On offers to all of its viewers. Don’t forget to subscribe to our channel, and also hit that notification button so you can be kept up to date on future events. We have some amazing content coming out in the next few days in the coming weeks to help you prepare for your financial future. Once again, thank you for spending time with us today and I look forward to seeing you again soon.

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