Henrik Seberg, Swissbloc Chief Macroeconomic Economist, Author A tower on sand on coinsstarted making frank predictions about the economy and the market.
In his opinion, the current enthusiasm is out of proportion and that a recession is imminent in the United States. But he sees strong upside potential for the stock, as detailed in a recent interview.
For Zeberg, Financial markets are not the central point for assessing economic healthHowever, job offers. “The fewer jobs that are created, the worse the economy will be,” he said.
Seberg emphasized that private job creation is the most direct way to measure economic momentum. “When you talk about the current state of the economy, the easiest way is to focus on job creation, especially private job creation,” he said.
In that sense, he highlighted the latest data available on private job creation in the United States, which corresponds to December and was released last week. The figure was 41,000 positions, he explained.
Employment and consumer deterioration
According to the economist, this figure is alarming when analyzed from a historical perspective. “History shows us that 41,000 is not a good number,” he says. and he added: Long-term trends provide even clearer signals.
“Even though the economy is much larger now, if you look at the 12-month moving average, it’s lower than what we’ve seen before each of the last 10 to 12 recessions,” he said.
“Nothing falls in a straight line, there are always ups and downs. That’s why we look at moving averages,” he explained. He added: “These averages today show that we are not yet in an open recession, but we are clearly slowing down and slowing down quickly.”
Economic deterioration is also reflected in consumption. Mr Seberg warned that the impact would be uneven, disproportionately affecting people other than the wealthiest.
He argues that American consumers, especially those outside the wealthiest 10%, are worse off today than they were before the 2008 financial crisis or even before the Great Depression of 1929.
In his opinion, this In contrast to the prevailing market perception. “People have a very distorted view of what’s going on,” he says. He explained that many investors are focused on artificial intelligence, big technology companies and the stock market. “They think everything is fine, but it’s not.”
As he pointed out, liquidity increases despite bad economic signs. As a result, he believes it’s only a matter of time before stock prices reverse.
Seberg clarified: This phenomenon is not limited to the United States.. He noted that similar things are happening elsewhere, including in Europe. However, he acknowledged that US data tends to be more visible and accessible.
distrust in the economy
The economist said we are in a dangerous transition period. “Our economy is slowly sinking like a ship, and someday we will be in a complete recession,” he said.
In his opinion, the Federal Reserve System (FED), the central bank of the United States, Focusing on inflation underestimates the problem. “She still doesn’t seem to understand this and continues to focus on inflation, which is a lagging indicator.” “When the economy slows down, inflation in turn falls.”
Zeberg estimated real inflation at about 2.7% and expected it to slow further as a result of the economic slowdown. “The models that try to predict that show that the price index could fall below 2%,” he said.
This situation creates what he calls the “Twilight Zone.” This indicates that the stock market is doing relatively well and is rising strongly. Moreover, since Bitcoin (BTC) and cryptocurrencies have not collapsed, “everything is assumed to be fine,” he argued, but the true economic engine has stopped working.
“That engine belonged to the second and third class passengers on the Titanic,” he commented. “We are increasingly seeing them facing difficulties and this will ultimately have an impact on the economy.”
In this sense, Seberg warns: The stock market may be nearing a breaking point. “We are currently in the final stages. blow off top In the stock market,” he said.
and blow off top An explosive top is the final stage of a bullish cycle in financial markets, characterized by very rapid and significant price increases driven more by excitement and expectations than by economic fundamentals.
“We are in an inflationary environment and the risks are still there,” he said. Therefore, he thought: blow off top, S&P 500 stock index could rise 18-20% From here.
the US dollar will rise
“Gold and silver are starting to show signs of the end of this,” the financial analyst added. According to a report from CriptoNoticias, these rising assets are typically boosted by periods of economic uncertainty.
Mr. Zeberg emphasized his opinion as follows: There is no universally winning asset.. “In the long run, there could be different types of regimes,” he explained. “In some regimes it is useful to hold cash, in others it is better to hold gold or silver, and in others it is better to hold something else like Bitcoin.” Because of this, he concluded: “It’s not always good to keep things the same; it’s important to move between different regimes.”
In his view, cash liquidity is needed in a situation where everything collapses. Therefore, he believes that “we will enter a dollar regime, and this regime will not be based on gold, silver or Bitcoin.”
(Tag translation) Analysis and research
