Episode summary
Henrik Zeberg: Now We Rally — Not Because Things Are Great, But Because Things Are Bad
The Julia La Roche Show
· · Hosts: Julia La Roche · Guests: Henrik Zeberg
Summary
Henrik Zeberg argues the market has already put in a near-term bottom and is setting up for a final, sharp rally rather than a fresh durable bull market. He compares the setup to 2007, saying the economy is rolling over while stocks can still rip higher, with the Nasdaq potentially up about 30% from current levels before a top around January. In his view, the rally is being fueled by late-cycle psychology, retail chasing strength, and a rotation into the last euphoric phase rather than improving fundamentals.
Zeberg’s framework is built on the business cycle: housing leads, jobs follow, and the consumer ultimately decides whether growth continues. He says labor is already weak, housing is stalled, and the AI boom has contributed far less to GDP than the market narrative implies. He expects bond yields to have already topped and says the next major signal will be yields moving lower as the cycle turns down.
After the rally, Zeberg expects a bust that is first deflationary, then potentially stagflationary once the Fed responds. He sees private credit as the next major hidden risk and calls it a much larger problem than most investors appreciate. On gold, he expects near-term weakness first, then much higher prices later, with a long-run target of $25,000 to $30,000 an ounce in the early 2030s.
Key takeaways
- Zeberg says the bottom is in and expects a final Nasdaq rally of about 30% before a January top.
- He thinks the setup resembles 2007: the economy weakens first, but stocks can still surge into the peak.
- Zeberg says the Fed can trigger stagflation later, but it cannot prevent the initial bust or fix the recession.
- He calls private credit the next "nuclear bomb" because its opacity could hide far larger losses than investors expect.
- Zeberg expects gold to dip toward about $3,000 first, then eventually rise to $25,000–$30,000 in the early 2030s.
Notable quotes
“The final run of the longest bull market of our lifetimes starts here”
“I think we have to see that this is probably somewhat the same that we're going to see now”
“the next domino is going to be the debt that we have se that we've seen building up in private credit”
How the episode opens
There are many similarities to actually the situation we had in 2007 where we were in the same phase in the business cycle and you had a dip into August of 2007 and then the the market just rallied very strongly from there in like 25% in uh in the NASDAQ over 8 weeks and that was it and then you had the and then you had the financial crisis and I think we have to see that this is probably somewhat the same that we're going to see now. Henrik Zeberg, head macroeconomist at Swiss Block, also author of the book The Monetary House of Cards: The Bust of the Everything Bubble Caused by Central Bank Hubris. Welcome back to the show.
Great to see you, Henrik.
Thank you, Julia. Good to be again to be on again. Thank you.
It's great to have you. For folks um watching and listening, we are recording on Wednesday, November 4th before the market open here in the US on the heels of the midterm elections. Henrik, it's been a while since we had you because we're a little delayed.
We usually have you on at the start of each quarter and now it's been a month, but what a great time to have you because I was reading your Substack this morning. The piece you just published, now we rally. In the piece, you make the case that the bottom is in.
This is the bottom. Now we rally and not a bounce, not a brief rally that fades by Thanksgiving. The final run of the longest bull market of our lifetimes starts here.
Let's start there. Can you elaborate a bit more on the piece that you just published and where you see things today and where you see things headed?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nasdaq rally
- business cycle framework
- deflation then stagflation
- gold price outlook
- private credit risk
Companies and tickers mentioned
- Nasdaq
- SwissBlock
- S&P 500
- Fed
- Augusta Precious Metals
- Monetary Metals
- Gold
- The Monetary House of Cards
- The Fourth Turning
- AI
- Private credit
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Danielle DiMartino Booth: Warsh Could Slam the Economy Into Recession -
Axel Merk: I Sat Down With Kevin Warsh — What the Fed Is Really Up To and Where Gold Goes Next -
Chris Whalen: Fannie & Freddie Stuck, Foreclosures Rising, Credit Problems Coming
The Julia La Roche Show, this episode and its artwork belong to Julia La Roche. Octagon is not affiliated with the show; this page is an independent summary.
