Renowned macroeconomist Henrik Zeberg has sent shockwaves through the financial world with his grim prognosis for Bitcoin amidst an impending macroeconomic downturn. Using his business cycle model, which has been flawlessly accurate for over eight decades, Zeberg predicts a recession signal in 2023 that will unleash the most severe economic crisis since the 1929 crash. This model forms the foundation of his forecast, as he emphasizes the unprecedented accuracy of the recession signal.
Zeberg delves into the significance of yield inversion, an indicator often overlooked by analysts. Despite its dismissal in 2023 due to impatience, Zeberg highlights its historical reliability as a precursor to economic downturns. Observing the pattern of a 12-15 month period between yield inversion and the onset of a recession, the economist emphasizes that this signal should not be underestimated.
Drawing alarming parallels to the 2007-08 financial crisis, Zeberg examines the trajectory of US industrial production. He warns of a looming drop in industrial production, which historically signals the start of a recession. By highlighting this worrisome pattern of divergence, Zeberg raises a red flag for the broader economy.
Zeberg’s analysis extends to the housing market, where he points to the plummeting NAHB index as a significant warning sign. The economist highlights the direct relationship between housing market distress and rising unemployment, exacerbating the situation. Rising interest rates further hamper the housing market, reducing consumer spending and fueling an economic downturn.
Personal interest payments play a crucial role in Zeberg’s argument. He underscores the historical pattern where increases in market rates burden consumers with higher mortgage and debt payments, ultimately leading to recessions. Zeberg cautions that every rise in rates, as consumers pull back on their consumption, has caused a recession.
Housing affordability, or the lack thereof, serves as another critical component of Zeberg’s analysis. With affordability dropping below pre-financial crisis levels, Zeberg paints a grim picture of an impending unemployment crisis leading to widespread defaults and a collapse of the housing market.
Zeberg points to the bloated inventory levels of retailers and companies worldwide as a significant concern. He explains that this excess supply is a consequence of the demand hype of 2021-22, which was driven by stimulus funds that have since dried up. Zeberg sees this mismatch between supply and anticipated demand as a ticking time bomb for the economy.
In the midst of his grim economic forecast, Zeberg shines a unique spotlight on Bitcoin. He predicts a fleeting period of euphoria for the cryptocurrency, with its value soaring to an all-time high between $115,000 and $150,000. However, Zeberg cautions that this surge is part of a broader misleading narrative and warns about the blow-off top phenomenon that economists and analysts failed to forecast.
Zeberg concludes his analysis with a forewarning of an inevitable and imminent major recession. He dismisses any potential interventions from the Federal Reserve or administration, believing them to be futile in preventing the sinking of the metaphorical Titanic. As the question lingers on how Bitcoin will behave in a recession, the cryptocurrency stands at a pivotal crossroad, with its fate intertwining with the impending economic crisis.
At the time of writing, the Bitcoin price continues to maintain a sideways trend, trading at $42,392. As with any investment, readers are advised to conduct thorough research and exercise caution.
Disclaimer: The information provided in this article is for educational purposes only and does not represent the opinions of the author or NewsBTC. Investing in any asset carries risks, and readers are encouraged to make their own informed investment decisions. Ownership of investments carries financial risks, and individuals should consult with financial professionals before making any investment decisions.
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