Renowned macroeconomist Henrik Zeberg has recently sent shockwaves through the financial world with his bold forecast regarding X (formerly Twitter) and the Bitcoin price. Zeberg predicts a meteoric surge in the value of Bitcoin, projecting it to reach a peak of $115,000 to $150,000. However, this remarkable rise is predicted to be short-lived, as it will be followed by a devastating macroeconomic downturn that Zeberg believes will be the most severe since the crash of 1929.
At the heart of Zeberg’s prediction are seven key reasons. According to him, the Business Cycle has already signaled a recession in 2023, and the Leading Indicators have fallen below the Equilibrium Line. Zeberg confidently asserts that this recession signal from his Model has never been wrong in 80 years of data, making it an incredibly accurate predictor of economic downturns.
Zeberg also highlights the significance of yield inversion, a well-documented precursor to economic downturns. Despite analysts dismissing this signal in 2023 due to impatience, Zeberg emphasizes its historical reliability. He points out that, typically, there is a period of 12-15 months between the bottom of the Yield Inversion and the onset of a recession. Zeberg’s remarks underscore the widespread underestimation of this critical indicator.
In his analysis, Zeberg examines the trajectory of US industrial production and draws alarming parallels to the period just before the 2007-08 financial crisis. He identifies a similar pattern of divergence and warns of an upcoming significant drop in industrial production, which is often a signal of an impending recession. Additionally, Zeberg turns his attention to the housing market, highlighting the plummeting NAHB index as a significant warning sign. He emphasizes the direct relationship between housing market distress and the broader economy, particularly in terms of rising interest rates, which lead to reduced consumer spending and an economic downturn.
According to Zeberg, personal interest payments play a crucial role in his argument. Historical patterns have shown that increases in market rates burden consumers with higher mortgage and debt payments, ultimately leading to recessions. This is due to the pullback in consumer spending caused by the need to allocate more income towards interest payments. Additionally, housing affordability, or the lack thereof, is a critical component of Zeberg’s analysis. He paints a bleak picture of the future, where a worsening unemployment situation could lead to widespread defaults and a collapse of the housing market.
Zeberg points to the bloated inventory levels of retailers and companies worldwide as a ticking time bomb for the economy. He attributes this to the demand hype of 2021-22, driven by stimulus funds that have since dried up. With a significant mismatch between supply and anticipated demand, Zeberg warns that this situation could have severe repercussions for the economy.
In the midst of this dire economic forecast, Zeberg directs a unique spotlight on Bitcoin. He predicts a temporary period of euphoria for the cryptocurrency, with its value skyrocketing to an all-time high, potentially reaching between $115,000 and $150,000. However, he cautions that this surge in Bitcoin is part of a broader misleading narrative. Zeberg believes that economists and analysts will be lured into a false sense of security by the “Soft Landing Narrative,” which will ultimately blind them to the impending recession.
Zeberg’s analysis leads him to forecast a major recession that he believes is both inevitable and imminent. He compares the current economic situation to the Titanic hitting an iceberg, emphasizing that interventions from the Federal Reserve or any administration will be futile. The question that remains is how Bitcoin will behave in a recession, as the cryptocurrency has not experienced such a downturn since its inception in 2009. Zeberg wonders whether BTC will become a safe haven or follow the fate of equities, as he predicts.
At the time of writing, the Bitcoin price continues to trade sideways at $42,392. It is important to note that this article is for educational purposes only and does not represent NewsBTC’s opinion on whether to buy, sell, or hold any investments. Investing carries risks, and it is advised to conduct thorough research before making any investment decisions.