Macro strategist Henrik Zeberg thinks the economy is currently in the midst of an “everything bubble” that’s primed to get even bigger.
The economist tells his 143,400 followers on the social media platform X that the current bubble’s blow-off top isn’t finished.
“Bubble – where?
Below is Market Capitalization to GDP (gross domestic product):
1929 was a major Bubble: 105%
2000 was a major Bubble: 138%
2007 was a major Bubble: 105%
What do you think the current level of 188% represents? Then add on Crypto Bubble and Private Equity Bubble. When recession sets in the ‘Everything Bubble’ will pop!”
Private markets have witnessed a “remarkable” period of growth for more than a decade, surging from $9.7 trillion in assets under management (AUM) in 2012 to an estimated $24.4 trillion AUM by the end of last year, according to analysis from Big Four accounting firm Ernst & Young (EY).
Earlier this week, Zeberg said central banks like the Federal Reserve in the US and the European Central Bank (ECB) tend to cut rates shortly before a recession.
“Economic Expansion ahead – or Late Cycle and hence Recession ahead?
Let me make it easy for people who find it difficult to understand where we are in the Business Cycle.
On Thursday, ECB chose to cut its Fund Rates.
ECB and FED always will try to cut rates late cycle to hinder economy from falling into recession.
Now look at the chart.
Are we ‘Late Cycle’ – or standing in front of ‘New Economic Expansion’?
THINK!”
The Federal Reserve will likely issue its next statement on the Federal Funds Rate at the June 12th Federal Open Market Committee (FOMC) meeting. The central bank is expected to keep rates the same.
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