Blow Off Top Then Crash in Gold and Bitcoin and Global Markets | Henrik Zeberg and Jimmy Connor

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Henrik Zeberg, Senior Macro Economist at Swissblock, shares his views on where the markets are going in 2026. Henrik …

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Henrik, thank you very much for joining us today. How are things in Copenhagen? >> They are cold. We're getting close to Christmas, so um yeah, I just been in uh for for some time in Maya, Spain. It was really warm. And getting back here, it's cozy but cold. >> Yeah, that's why I I can never go away in the to any place warm in the winter because when you come back to the cold climate like I'm in Toronto, it's just too much of a shock. So, I never do that. Now, I have never had the pleasure of visiting Copenhagen. Not yet. Anyhow, and I'm kind of curious about the how's the local economy there? How is the economy in Denmark? How would you characterize it? >> I mean, we are very dependent on what happens in the in the rest of the world. I mean, we're such a small country, just past 6 million inhabitants or, you know, population of 6 million. So, uh so it's it's a small country. I uh I think we're probably one of the canarian in the coal mine. So, if something something happens, you'll probably very soon or very fast see it with you know, here we don't have um you know, big issues here. Uh so the economy is is good and okay you know working fine for now the unemploy unemployment is not moving up uh strongly or anything like that. Uh so I think things are fine. Uh housing market is a bit frothy I would say a little bit no very expensive to to live in Copenhagen and also in Denmark in general I think so um but but things seems fine here yet still >> in many countries in Europe have an issue with immigration. Any issues there with [clears throat] immigration? Yeah, we we start to see that uh there are you know different fractions here and it's something that comes up and it's also something that will be I think is more and more on the agenda of the political parties uh you know both left and right. So so yeah definitely and it's something that is u paid more attention to also by by you know ordinary citizens and people that I talk to. Yeah. So, let's move on now and talk about the economy. And I can't believe 2026 is just around the corner. And I'm sure you would agree with me when when I say that 2025 was a remarkable year. And we had this massive pullback back in April. All due to the uncertainty associated with the trade wars and tariffs, etc. S&P was down 20% at one point and then it had a massive rally. Next thing you know, it was up 30% from its lows. And one thing we've seen this year is that the S&P just continues to climb this wall of worry. It doesn't matter what's going on in the economy, other financial markets. You could have war in the Middle East or war in Europe, the potential for a regime change in South America. And the market just keeps going higher. And when I look at the economy, some elements of the economy look very strong, others look very weak. And when you look at the US GDP right now, it's growing at 3% which is quite robust. The unemployment rate is ticking higher. It's at 4.4% now, but historically that's still a low number. I just saw these numbers out of the National Retail Federation for the shopping over the four days from Black Friday to Cyber Monday. All-time record. It came in at 203 million people were out shopping uh over those four days and that exceeded 197 million people last year. But then there's other elements of the economy that I keep hearing about and it looks like the economy is starting to suffer. And Challenger Gray and Christmas said the number of layoffs we saw in the month of October was historical. Companies announced the layoffs of 153,000 workers in the month of October alone. And so I want to get your thoughts on what you think of the economy right now and help me make sense of all this so I know how to position myself for 2026. What's your take? Well, I think it's taken uh longer to see the slowdown that we have. As you know, my my uh uh business cycle model suggests that we should see a slowdown over this year and we certainly have uh because it uh it crossed over when it's and sent the signal in November of last year and uh just to to first comparison, it it did the same thing in 2006 in in November as well. And then it lasted, you know, a year a little more before we saw the recession back in 2007 and December setting in. Uh I think this year also we we started out the year by having hearing Paul saying oh the economy is so strong the labor model is unprecedented strong and then came August and all of a sudden all that strength was just a mirage and it wasn't there and it hadn't been there actually. So we saw the revision in the job numbers and we it's been at a st standstill or stall stall page I would call it at since um at least since summer. See, we have to understand that when it's a an economy of this size, the global economy, the US economy doesn't just roll over immediately like a speedboat turn direction. It's something that is a slow move and we're definitely seeing that now. I mean, I think, you know, first of all, GDP is a lagging uh number. So, lacking because of when they calculate the number, it's you know, the end of the month or the end of the quarter and then, you know, it has to get out through the the media and so on. You'll see that this is something that goes, you know, some months back. Also it is based on a lot of uh it's based on a lot of um uh yeah so numbers that are coming out and but but these numbers can also be revised and when the final number of TDP comes out often you'll see that it's getting revised. For instance back in in Q Q4 2007 you saw that that was also revised quite considerably at a time where the Fed thought everything was fine October of 2007 and the recession started in 2000 uh December of of that year. So I think we can look to the GDP numbers. We need to look to the the leading indicators first and foremost and they have been telling us for a long time that things are not great and these are the the especially related to the housing market. The housing market in the US has been at a has frozen you know solid at this point as I see it. The affordability of the for consumers in terms of being able to live in their own homes have just been know been crashing. So I think this is one of the things that puts pressure on the consumer which we see also then in the consumer sentiment which is now at rock bottom levels. The same is the affordability that doesn't play out then overnight but consumption will then slowly start to uh to to uh weaken which we are seeing and we can see also that in the durable goods and and and else and other the retail control index also we saw here just the other day. So, we're starting to see that uh slowing and now today we actually saw the number of uh was it 30 minus 32,000 uh private uh ADP in the ADP number just a few uh an hour ago or something. So, I definitely see the slowing and and I think this people just maybe have an anticipation that that's something that happens overnight. It is something that happens slowly and all of a sudden it's like now it's it's as bad so that the recession sets in. I think we are on the I mean there are some of my imminent recession indicators that are beginning to flash now which means that we are very close to something. The the economy is stalling as I see it and uh and the and the stock market uh is having a you know party which has had all the all year almost and every dip has been bought up and we're continuing higher. So I don't think we have much time left before we see the rec. I will say that recession by latest Q1 of 26 that is um I think that is almost a given at this point. >> Just repeat that again. A recession by Q1 of 2026. >> Yes. that we will find you know when the end you know the NDER will come out 6 n 12 months from now and then look at the the you know at a point in time when the recession started in 2008 they pointed out I think it was December 2008 they pointed out that the recession started in in December of 2007 uh I think when we look back in a year from now you will say that the recession started one of the months of January February or March that is what my business life indicator is clearly indicating at this point >> so Scott Bant recently did an interview and he said he does not see a recession in 2026. He did admit that there are pockets of the economy that are weak for example housing. Uh so you disagree with him totally >> completely. I mean I I honestly I have difficulties to see how people cannot see this. I mean there are so many clear signals at this point. I maybe I can show maybe a chart or two here if you want. Uh but you know we we are definitely seeing something that could um that is going to accelerate. The thing is these things are not just happening overnight. It's something that is in the process. That's why the momentum of the economy just like the momentum of a super tanker. If it starts to turn and it turns is it takes a lot for it to to to yeah turn in the right direction again. And on and for now it seems like we're just in a situation where things are going to uh continue to um to be let me see here. This is the unemployment level in the US. And if you look at that simply and you'll see well we need you don't need to know much about economy to see when we have these rounding bottoms in the unemployment level and we have the the momentum as I talked about pushing higher well then you get a recession and uh there's not so much to say about it. That's the the feedback loop. The the consumer is feeling bad, they will consume less. And when they consume less, well then there will be less uh you know jobs available and when there's less jobs, there will be more people unemployed and so on and so forth. And that is happening right now. And the Fed is overly hawkish at this point and which is a very big problem and has been they have been overly hawkish for way too long. So one of the things we really don't know what's going on like because of the government shutdown which was I believe 42 days we really have no idea what's going on with the economy and also with the unemployment numbers and the John uh non-farmms for example the last numbers we saw were for September uh they came in at it was a big increase it was an increase of >> 119,000 >> 119,000 jobs versus a loss of 4,000 jobs in August. They're cancelling the October numbers. They just said, "Ah, the hell with it. We don't need them." And we're not going to see the November numbers until December the 16th, I believe. So, there could be so much going on there. Like I mentioned that, >> oh, >> the the uh the number of layoffs in the month of October. It was massive. So, it's going to be interesting to see what this unemployment rate is when it comes out. >> We have the slowdown as we have every time we get into a recession. And uh and again, now they're trying to hide the numbers. that's going to hide that's not going to hide the reality of of of things. And today, as I said, we have the ADP numbers. Uh first of all, let me say in the terms of the non-found payrolls, the 119,000 is the first revision. It's the first print and and you'll see revisions on those. So, we have to remember that the 19,000 and the minus3,000 in June, they were actually I think it was 144, and 200 or something, they were brought down considerably. They over the last five years we have seen on an average the revision to be around 65,000 and in a slowdown you often see them much much bigger and right now you look at if you look to the private jobs we just had that number today it was a minus of 32,000 and if you look at the again the trend here there's no doubt about the trend of this I mean the trend is down and lower so that people think that things are great here because the stock market is doing well or because somebody says they doesn't see it because there's only pockets of it. Well, if one pocket is the entire labor market, then I I will agree with him because that is what we see now. We have seen the leading indicators the the housing market weakening. Consumer is now, you know, in the gutter. We haven't simply seen anything like this. And and this is uh this is going to be uh you know, a recession that is the most easiest to to spot that we've ever had, I think, and it's going to be one of the worst as well. And just in case somebody is listening and not watching, the chart you're showing right now is the ADP number. Can you just tell us what that's indicating? Yeah. So the ADP national employment report that measures the the level of non-farm private employment and we can see how that has just you know after the co situation in 2020 when it just you know rocketed higher because we had all that stimulus coming in and all businesses around the in the US and around the world were just you know overd delivering and actually you know performing at much higher um you know um just because of the stimulus. So if you stimulate an economy there will be a high demand and when there's a high demand businesses will have to deliver and so on. on so forth. It takes a while when it's such a an extreme stimulus as we got back in uh in 2020 there before we see that you know coming uh you know full cycle but that is what we see right now and there is no need for the or for businesses right now to to uh to hire people in because if we look at the the capacity the utilization of that capacity we have in the US well the latest number is now at 75 I actually had to update that 75 was the latest number we got here now uh in December mber that is a very very low number for use your capacity utilization. Why would you hire people in if your capacity is only utilized at 3/4 of of you know of the capacity? Why would you hire people in? You wouldn't. That's the thing. So I think people are misunderstanding that just because things are not happening just after we saw I don't think one bit first of all that it was the tariffs that created the situation. I think it's a economy that has been rolling over for longer and uh and my November crossover was a u was before that but the tariffs have not helped. It's not those who create it but it has not helped absolutely but but right now you see the businesses around the the world and in the US in particular they why would they hire people in and that is what we start to see in the we don't see the spike in the in the initial job jobless claims which we should see but that can have to do with the severance payments or whatever you have of packages as you if you you lose your job but we do see the continuous jobless claims if you look at that actually moving up and and has and has reached a you could say an uncomfortable uh high level here uh which which also is is not a good thing. That means that people when they lose their job they they find it hard to find a new job. Again people can say we don't think this is going to develop into something bad. I say I think it develops into something bad because right now there's no who will be the ones that actually comes out and do does the change to this? Why would it change at this point? the the the cycle right now is in in the in the wrong direction, so to speak. >> Yeah. And just to continue on with this theme of unemployment, Amazon came out last month. They they were one of the companies in the month of October that announced some massive layoffs. They're the second largest employer in the US. They employ 1.5 million people. They said they want to automate 75% of their business by 2033. and they also want to double their revenues by 2033 but maintain their current uh workforce. Okay, so just think about that. So by doing this they think they're going to it's going to result in in um hiring 500,000 people less. Okay, so they're they want to double their business with the same number of people that they have. And you got to wonder I like what does AI mean for the economy overall? I know um I don't know what's going on in the in Denmark, but in Canada, youth unemployment is at 15%, in the US it's at 11%. A lot of people are saying this has to do with AI. So AI is eliminating entry-level jobs. Any thoughts on that? >> No, but absolutely. But that's what you know people are saying, oh, AI is going to be fantastic. And let me just put that first. There are, you know, as with everything, there is a short-term perspective, a middle-term, and a long term. And if you look at the short-term perspective, if you are a business and you looking there and you can say usually I would hire two people in for this you know this task here now I am actually just going to hire one in because you know this guy can actually be double product as productive. See in the bigger scheme of things that's fantastic because that means that every business can then be more productive. But in a world where the and an economy where it's the um demand is is is declining and you have uh and businesses can't fill the capacities well then it's not a good thing that's a bad thing for the economy and that's what people don't understand in the short term AI can actually be a bad thing in the long time frame I think it's going to be something that is going to propel the productivity and the you know everything for the human race as long as we can you know uh master it and uh and and stay on top of it but but it's going to be fantastic short term it's It's not going to be fantastic. And the and and to think that the businesses that you have, you know, will just because they earn more money is going to help and then all of a sudden that investment that they will come out and that will just bring more people into work. Well, there is a certain truth to that, but at least it will take a while and but but then again, it will also not employ all the people that are are losing their jobs. And the problem right now, and this is why I brought this chart up here, is that if you look at the average weeks of unemployment, you can see that that is rising right now. And if you look into the financial crisis, before the financial crisis, an average, you know, unemployment uh was around 16 weeks. Now it has risen to around 24 weeks. And this is before a recession. That's one observation. That means 50% higher or longer time your people will on an average be be unemployed which means everything else being equal that they will be more uh disconnected to the to the labor market which is a bad thing. You will lose your competences you will you know there will be a lot of thing and you have to think 80% of you know let's say 30% of the people who who are in this you know uh lose their job they will have even longer than the you know 24 weeks they will have maybe 50 weeks or something. So this becomes more of a structural issue and that is actually what we can see here. If you look at the level how it's been rising in the US over the last many many years into the financial crisis and it's just elevated this point it's higher than any point since 1948 to 2009 which is a problem that is simply that people are becoming more alienated to the labor market. So this requires a shift. It is a fantastic shift. If you look from humankind in a bigger perspective, it's like in the, you know, I know that you're probably driving automatic cars there, but you know, people with a stick there, you know, you have to kind of, you know, to get into the next gear, you you kind of, you know, push down the clutch and you'll see that there's a little little loss of of momentum. That is what we see also here now in the economy. It's shifting gears into a higher gear, more productive, more, you know, strong in the long time frame, but in the short time frame, there's a loss of momentum. And that's what we're looking at. We're looking at a generation of people um you and me I mean if we were for us sitting using computers on a daily basis we would probably also feel that this about AI well that's you know a little difficult and and the job that I had you know 5 years ago all of a sudden can be taken care of by a a computer I mean these things are a you know serious challenge to the 70 maybe not the all 70% but the bottom 20 30% of a of the economy especially in the US where you have a lot of manual jobs that will then be taken over by this. So yes, great long-term perspective, short-term, medium-term, not so great and uh and and actually bad thing because people will, you know, find it increasingly difficult to find a job which is what carries the economy at this point. >> And I read an article in the New York Times recently by Jason Ferman. He's a professor at Harvard and he suggested that if you remove all the capex and all the spend associated with AI, there'd be zero growth in the economy. And right now the government's telling us the economy is growing at 3%. So uh >> I don't think you'd even need to do that. I I actually did a calculation on that and I just took away the public spending uh spending on in the US and I then also ra um uh eliminated the deflation or the inflation on in the numbers as well and you'll actually see that there's been a stall speed in the US after corona there's been a stall speed for two or three years now below 1% just around 0 to 0.5% in terms of growth and then as you said also if you take the other ways rate as well Sorry. Uh oh, sorry about this. That's what happens. There we go. Then you will see that the that there will, you know, be um an economy that has a completely different character and different at a different state than than most people understand. And Henrik, once again, just for the sake of people who might be listening, the chart we're looking at right now describes what >> unemployment for the US economy, which means that if you you look at when people are becoming unemployed, how much will they on average, you know, how long will they stay unemployed? And uh you can see that that's if you go back to the 70s, it was all way all the way down in, you know, 12 weeks, 10 weeks and something. And it's been fluctuating up and down. But there is a clear shift as we go into the financial uh crisis and we can see it moving higher and going all the way up to I can't even see how high it was up at 40 weeks into the after the financial crisis. It has come down again but we are still now at around 24 and we are clearly at a higher level than the highest points we have seen since uh 1948. Uh which is as I said that's a structural problem for the economy. There can be more you know short-term you know cyclical problems but this is structural. This means that there is a large part of the labor force that is actually in becoming irrelevant or disconnected to the to the to the job market in the future you know that that may be what we see but right now with the way things are run it is a problem for an economy that people can't find job or becomes irrelevant for the market and this I don't think I don't hear that you know a lot of talk about that in the in the news or anywhere but but this is a big problem and as you mentioned also youth unemployment and so on I mean if that starts to spike as well Then we'll have young people not getting connected or not getting into the labor market which is an even bigger problem because then you never get started at all before you uh you you you have to yeah you find yourself um obsolete almost. >> Yes. And just to add to your point 70% of the economy is based on the consumer. When I say the economy I mean in the US. And so if they're not spending money if they don't have money well the economy uh is just going to decline significantly. Now, just to further reinforce the points that you're making, I recently read an article in the Economist. It was titled, "What if the AI stock market bubble blows up?" And in that article, they basically said the AI crash would destroy 8% of household wealth. And of course, a lot of the people that are spending money now is they're doing so because they feel rich. Their house has gone up in value. The stock market has gone up in value. But if that were to change suddenly then that uh the economist suggested that it would cut consumption by 500 billion or 1.8% of GDP. Thoughts on that? >> We could just uh we can take a look at it. We can see how the uh if you look at the um the price uh see if we got that here. Uh so prices I think it is. If you look at how it actually is declining already and when we see that we see the the momentum of the US house price index here and you see the decline we have here and we see the similar decline here every time we have declines in the housing price this is a yearon-year uh you know uh price um so uh you'll see that it's still at 1.7 but there is a clear downward momentum and at the same time we see the unemployment level moving up I mean that is a bad cocktail because if people are feeling you have two things that are really important in two things as you know um that is will be your house the the value of your house it don't make you feel rich or not so rich and then there will be the um it will be the whether you have a job or not and this the recessions that are those shallow ones are the ones where the housing market does not take a hit those are the ones we had in 2001 which was a dot and crashed and we saw a lot of you know you know devastation in the stock market but actually the recession was not that bad the same was for the uh 1990s the early one in 1990 I think or 91 one as the start of that was also a rather shallow shallow one. But if you look to the double recession we had in in in the early 80s that was a severe one and we have one now and we had the financial crisis obviously and we have one that is also now seeming to become a very severe recession because we are the consumers depressed and that's what I I looked at here before. So the consumer is just in the gutter and and and their house the the value of their homes are are starting to see also taking a hit and they're they can sell their um their homes. If we look at the uh if we look at the um existing homes sold um from a and this is one of the most I don't again one of the things I don't understand why people don't mention and when they talk about how strong the economy is back in the early days of uh let's see how I can put us here let's put us over here. Um so the existing home sales here we see that we can see when that takes a tumble that's normally when we get into a recession and we have seen that tumble in that one. So meaning a very few homes are actually being sold. This is an absolute number of 4 million around that level which is a level we have seen all the way back in let's say 94 when it was at a spike there but the US economy was 80 million fewer people at that time than it is today. And also we we saw it back in 78 when it was even smaller the US population which means that if you look at this and you say how many homes are sold per per you know as part of the population it is right now in the worst gutter than we have ever seen and this is at a time where the unemployment level is low. Now go figure if things are now turning out and those businesses that do not want to um build more capacity by hiring in more people and they rather use AI uh and if we start to see an unemployment spiking here what is going to happen to the home prices then they're going to plummet even further you're going to see a negative development in that and I think you're already seeing that in a lot of I' you know seen some interesting charts that are saying that there are certain areas in the US where you you start to see that you don't have it nationwide just yet but it's uh it definitely looks like it becoming. So yes, and and and we know it from ourselves. If our home is starting to depreciate in value, we don't feel as you know ready to go and and and take up and take a loan on to to build a or you know some kind of refurbishment of the house or buying a new car or whatever it is. That is the way we are we work and and act and and and god forbid if we also lose our job then then it's even worse. But I think we're seeing the unfortunately a lot of factors coming together here and into at the same time what is the worst bubble in the stock market we have ever seen. So we have a cocktail that is just becoming toxic and uh and and it looks like we're very close to uh to to yeah to see what comes out there. >> Before I get your views on the S&P and the NASDAQ, I want to continue on with the economy. And one thing that continues to frustrate the hell out of me is inflation. And the governments in both Canada and the US, they want you to believe they got it under control, but the CPI or inflation has been trading above the Fed's 2% target now for I think it's 57 months. Okay? You might as well round it up and say five years. And and if you look at food inflation, like just in the past year, like the price of coffee is up 30% year-over-year. Ground beef is up 15%. The price of bananas is even up 10%. And in my mind, the only thing saving us right now is the fact that oil is hanging in around $60 a barrel. So the price of oil or energy has is down on the year. But what are your thoughts on inflation? If we get this massive pullback in the economy like you're suggesting, what's going to happen with inflation? >> Difficultation between what is inflation and what is price level? So, so what you mentioned here was price level and I think that is correct. Price level has risen by 20% or something like that depending on country and depending on region and so on but around that level from 2020 which is a lot but that is exactly what kills the consumer. It does that slowly. I mean for some time you may survive you may have some extra cash especially from all the stimulus that came in during uh after COVID but eventually you will have to make you know to to earn that money to to to to uh meet that kind of extra cost that you'll see on a daily basis. That is why we see the housing market simply being frozen solid. So but right now the inflation level is not that high. I know it's on higher than the 2%. And people kind of say it's higher than two. 2% is something that the you know has been picked out of the of free air and it's just like it's it's not a calculated number that it needs to be. An economy that works at around 3% inflation is okay. It's not a problem and we can actually see if we go back in time we'll see that it's been you know times where the economy has been thriving at around 3%. So this about the 2% is kind of a stigma that we need to get it down to 2% otherwise the problem. The real problem here, as I see it, is that inflation is lagging, which means that the things I'm talking about with the housing market and with the labor market starting to roll over. If that happens, you're going to see the opposite of inflation. You're going to see deflationary development. This has, you know, pressure on inflation. I'm not one bit worried about inflation in the short term because I think you got more worries about the the actual potential outcomes of the economy rolling over. Uh I know people feel it and they feel that the price level has risen and that's what they're talking about. But they're not talking it's like the bathtub. The price level is how much water is there in the bathtub and the and you know what comes out of the whatever you call that is you know is is the the rate of inflation and uh so as long as and right now the inflation rate is is actually coming coming down. I know it sounds even though we've had these you know jumps up and down you can look to true inflation they can also they have do really good job on that and they can see that there is actually a downward pressure on that but if you look at it further also you go into the previous times you'll see that into the financial crisis which was here inflation actually rose it's a lagging indicator which means that when the economy rolls over you'll still see some inflationary pressures that is what we see now and people are confusing price level with inflation because a threele percent 3% level right now at the state we're in in the business cycle. It's not a problem. That is not a problem for the economy. It and and the problem is more that you have an overreaction to that now from the Fed. You can see into the financial crisis. It was up at 5 something%. Was inflation a problem by the end of 2018? Absolutely not. It was quite the opposite. Was it the problem at the uh at the end of the com um uh recession? No, it was not. Inflation was down at 1%. So people are confusing that and that is actually a problem because right now that creates an environment where the Fed from political reasons cannot be more than you know they need to be hawkish on it because inflation kills the consumer. We know that and that's unfortunately what has been happening. But the Fed right now is overly hawkish and you can just look at it from a perspective we say inflation minus the Fed fund rate. And if you look at that right now at this at today you can say that we are actually in the period where the Fed is overly hawkish especially when you look at how strong the unemployment level is coming up. So when unemployment level is coming up to this degree and we know the Fed has a dual mandate they should actually way before now have been starting to stimulate the economy. That is however something because they look in at what I would call outdated data and at least lack lagging data and they have the inflation as one of their key targets and the policy mandate. It's actually becoming a problem and that's the problem we see right now. They they sit and they talk about inflation which most likely is going to roll over and and then they are becoming overly hawkish which then kills the the cons the the consumer even more. So the Fed is actually in the in the very uh you know uh process of of creating one of the largest policy errors ever has seen that I think we ever going to see. They they they probably going to see that they will be uh yeah doing whatever they can to solve off deflation when the housing market starts to drop which I think it will when the unemployment number starts to come up which I think they will. There's a reason why we don't see them for October and why the November will come last. It's not because they're great. It's probably because they're not so good and that's also what the my econ my model is suggesting. So the Fed is overly hawkish at this point and even with a 25 basis cut here now that's not going to bring it into the doubbish area. The problem has been the whole thing the reason here that they were the whole situation here where they were overly uh doubbish for a very long time going all the way back to 2009. for a long time they were you know uh fed inflation was was was uh was you know uh higher than the fed fund rate and that was the reason why we have seen the the everything bubble and everything building up. Um but now the Fed should have been reporting way before that inflation is not a problem and no matter what the Fed does at this point it's not going to inflate the market all of a sudden because people are in the process of losing their jobs. Businesses are in the process of cutting capacity because they are just running at 75%. So inflation is not what you see there and that is what people you know misunderstand these days I think. >> And if we get this slowdown in the economy like you're suggesting where do you see the unemployment rate going if it's currently at 4.4%. Are we going to 5% 6%. And I guess what I'm asking is how severe will this recession be? >> Much much higher. First of all, I mean, you're going to see a I mean, I it's difficult to calculate how, but I I see no reason why would uh it would be lower than what we saw into the spike of unemployment in 2009 uh eight and and n there. I think you're going to see a massive loss of jobs. I think you're going to see uh you know growth being negative for for a long time. I I I think you're going to see horrendous um stock market drop. So, um I I don't have a number that I can give you in terms of unemployment, but I would say it's probably going to go above and north of what we saw back into the financial crisis. >> Okay. So, why don't we move on now and look at the financial markets beginning with the S&P. Uh the last time you and I spoke it was in July and at that time you were very bullish. Uh I think you your target on the S&P was 6,800 to 7,000. We're pretty well there now on the S&P. Um where do you see it going in Q1? saying, "Henrik, where's the where's the blowoff top?" And uh I don't know what they really what they are talking about because when I started to talk about the blowoff top, that was in 2022. And if you look at this development that I we we have seen here, this is the very definition of a blowoff top. This is I don't know how many% that actually is, but we can take it. If I get it to the 7,800, that's 115% ever since 22. That is extreme in 3 years. I mean, that is absolutely extreme. So, this is the blowoff top. You know, of course, you have had these small declines, but if you look at these monthly candles here, they are just insane. And if you look at it on a 3-month basis, you can see how we had smaller candles here, and then they just got bigger, bigger, and now they're just insane. So, we are getting closer and closer to my my target. My target will still be around 7,800. I think that is where we will see a top. We can be there. Just hang on. I think we can be there by December. We can be there this month. We can be there next month. I don't think we get long far into to 26. We have a hanging man here on this monthly candle. It's not necessarily a good thing. I don't think it's going to top here, but we are getting very very close. And if we get closer, if we move in closer on the on the S&P here, um then we'll see also that the that we actually have a um if you look at the yeah, my setup here is that we are in a situation where we could end it up here around 7,500 as I said to 7,800. But on a weekly chart, uh we have definitely uh something that is not looking good. We have a divergence here with which is something we only see into major tops especially when the economy is deteriorating at the same time which we definitely see signs of. So I think we are in the really the final innings of this. It's taking a bit longer than I expected. We are still going to the levels that I see but now the the signals are coming out and we just need now everybody to be pulled right back up again and then the real economy rolling over. So I would say 7,500 7,800 is going to be the target. Uh with a rotation, you can see small caps doing really well into this final phase and you'll see probably thread having an extreme run. Uh I think it started just the other day because now it's evident that the Fed is going to come in and cut and uh and they are running off the quantity tightening. We have the TTAa funds coming in now after the US shutdown. All these things and the dollar is still declining and uh and all these things are going to to to bring about a fantastic blowoff top that rise you know whatever kind of percentage that is for the the S&P here but uh let's say up to it could be seven it could be third 13 14 15% even uh on the on the NASDAQ and the S&P >> so I just want to clarify so your blowoff top the level you're looking for now is 7500 to 7800 on the S&P >> correct Yes. >> And do you have a timeline associated with that? Are we talking Q1, first half of the year? >> As I said, no, no, no, not first half. I say it will be again, it could be as soon as even this month. I know I know it sounds crazy, but the the final blowoff tops are always insane. You can look to the Nicke uh 1989. You can look to the NASDAQ in 2000. And uh you can see those extreme candles at the at the very end of it. And if I had to say, I'd probably say it's in it's going to be in January. So I I'll probably say January could be the time where we reach this. We have a spike into it and the reversal and then I think you're going to see that that um and again people will not see and feel it from immediately there. They're probably going to see the first decline and then everybody will think, oh that was just another dip and now we go up again and then you'll see a lower high into May and then you can see the real decline. But the top could still be as soon as in January. >> All right. You mentioned Bitcoin and we've had a big pullback here in the last uh month or two months. It got as high as 125,000 went down to 85,000. Now we're trading in the low 90s. Where do you see this going? >> We saw in 200 uh 17 and uh we had a fantastic rally into that top and I think we're going to have that again here this time around. I think we're going to have a let's see just did I stop sharing here? I hope I did. um that that we see a fantastic top like in 2017 where it just went up up for some time and also in 21 you saw that it had a fantastic three four weeks run um and then you're going to see a rotation into the small uh caps or you know crypto that means into all coins and you're going to see a top there as well into maybe late January maybe early February but that's that's as far as it takes I think it's uh going to be faster and stronger than most people anticipate here because we're starting to see the things that can kill this this uh bull market here. We're starting to see the talks about the whole AI situation with Nvidia and so on which you see in the micro strategy also now starting to oh interestingly enough starting to build a US dollar reserve. um interesting when you don't like fiat and that you just have to build a fiat reserve anyway. Uh sounds interesting and we have the whole situation with tether where we just saw that the S&P uh rating agency was giving them a a week which means that they cannot see through how is there really backing for the tethers that they are you know in terms of US dollars or is this just you know a mirage. I think we are uh seeing the some of the things that at in the aftermath is going to be the things that people say oh this was the thing that actually you know killed it all. It will not be because the real thing is that it's the economy that rolls over and then you'll have it. But there will be some of the big losses there. But again, we have to differentiate between short-term, medium-term, and long-term. Short-term, which means the next few weeks here into early January, I think you can have a fantastic bull run. And I see Bitcoin going to 140, 150,000 even. But I don't see it much over that then. And that would be enough. I mean, that would be quite strong from here. >> And I'm glad you brought up Micro Strategy. The the name now is actually strategy. I'm not sure why they changed. >> It's called Strate. >> We've had a massive like this stock. Oh my god. So, it got up to 400 bucks. Uh last time I looked at it was at like 180 or $185. Um do you think there's there's hope for those people that own Micro Strategy or Strategy? >> Yeah. Again, that depends on how what we mean about hope because I think the the market is going to prove everybody wrong right now. And I think you're going to see that the market will then accelerate and I think strategy is going to make new highs and people especially if Bitcoin recovers 100,000 then uh you'll see people will be flocking into it and and and chasing it and talking about how what you know the genius of that Mike Ser is and uh and then you're going to see the the final blowoff top there. So in that time frame yes everybody you know there is hope but in the larger perspective no absolutely not. I mean it it speaks for itself when somebody who hates fiat as much and they are starting to be build a fiat uh you know reserve that's that's because reality is starting to dawn reality is that you cannot pay your you know loan your mortgage payment whatever it is with bitcoins they try to tell you that it's going to be but you can't and when you leverage up like what strategy is at some point is going to go you know terribly wrong and if they if ter if if you know Bitcoin is going to reach the levels to the downside that I expect. Well, then there will be no more strategy. So, I could see a again just imagine these crazy runs. We have the most insane bubble in the world. We have you know everything is stretched. We have to think in those terms when we say how far and how high can it go. And I could see strategy going above 800 and above a,000 in price in a you know five six times up in no time because you will see that everybody will be now be running into it when this when Bitcoin recovers 100,000 and you know Mike Sea will again be uh you know looked upon as the uh the saver of the world and the same with Bitcoin. So but but but that's going to be the the final end of it and the negative divergence on that is actually just quite extreme. So if you take a weekly chart on on Bitcoin and you look at the since March of 24, you'll see how the the momentum of the tops of the of the uh the move has been lower and lower and lower. And everybody talks about how strong it has been and so on. It's not strong. It's actually technically weak. And uh as I see it, I have to say, and I will say it here, I saw Bur coming out saying it's it's worthless. Uh, I I will be a little more kind and I'll say it'll be a collector's item in a few years. >> So, I just want to clarify. You threw out a lot of numbers there, but once again, Bitcoin is trading in the low 90s and you think it's going to stabilize here. It's going to rip to as high as 140,000 and then all hell is going to break loose and we're going to have a breakdown in the economy and Bitcoin is going to get destroyed. If you look back in the four times you've had a larger pullback in Bitcoin, it was about 70, you know, 70 to 90%. Uh this time around is a real recession setting in a real recession is not going to be kind to Bitcoin. Uh you will have that the stock market is going to decline if my model is correct and we're going to see a very massive top. You're going to have a massive decline in NASDAQ and NASDAQ is only is outperformed by by Bitcoin in terms of upside and downside. So, so I think you're going to see Bitcoin crashing quite a lot and um you see there is actually when we have days like uh yeah the last few weeks here all of a sudden I mean what brought Bitcoin down from 125,000 to 80,000 $45,000 in in a matter of two weeks what was it wasn't really a big thing I mean there wasn't a big thing going on now imagine if you have a credit crisis if you had the dollar going to 110 uh the Dixie 110 or 115 and you have, you know, massive defaults and you have, you know, the stock market, you know, cracking. Who in their right mind would think that Bitcoin will survive that when it can drop by $45,000, 30%, 35% in a matter of no time due to nothing. I think people talking about all their diamond hands and so on, I it'll prove and will come out it's all paper hands when it comes to it. So, and I don't see Bitcoin as the savior of the financial system. They there no way you'll have something like that saving the financial system. The financial system needs saving without a doubt. It needs a monetary reset. We need to get do a new, you know, sound monetary future, but that's not going to be Bitcoin. I'm I'm sorry to say. And I have to be a little more harsh on it now because I think honestly people out there need to understand the the reality of things. I hear so many people sitting and thinking, "Oh, but Bitcoin is going to stand." And I'm just like, "What? Look at the declines we have had without any reason. Why would you then think a severe crisis could bring Bitcoin to its high? And then they come with something with money printing. And you can just look through the charts and say NASDAQ dropped in the financial crisis a lot. Even though there was massive money printing, the the NASDAQ dropped also in the 2001 crisis. Even though was there was massive money printing. Why would you think Bitcoin would do any better than that? And that's why what what I think so people are unfortunately being led by by all these uh bitcoin maximalists and uh defi and whatever it is. And I I think this is just a narrative of a bubble. That's the narrative. You and I are old enough to remember also the bubble of 2001 and uh you know the you know the com and we had all this with the new economy and all this and uh you know it's not about how much money you make anymore. It's about how much you spend on marketing and uh you know all these things. It's about how many clicks we see and all this. I mean, this is the very definition of, you know, the narrative you need to see in a bubble and that's what we have. >> All right, so let's move on and talk about gold. Now, gold has had it had a pretty good 2024. It was up 25%. It's already up 50% 2025. Looks like it's got a lot of momentum. Um, what do you think? >> I think uh yeah, I've been wrong on on how high a goal could come. No doubt about that. uh it's it's uh could go. Um I didn't see that. I didn't see how much it would rise before. I would I have all along been expecting gold to come into a massive bull market after this. What I think we're seeing here is the the prelude to what is coming after. Uh and when I mean after, that's because I look into the the decline we're going to see here first the crash that different kinds of crashes to the market. If you look to the 22 2022 um crash or the decline that you had there in the stock markets, it was really driven by a inflationary situation where stocks was declining because inflation was rising. That's not a good thing for the consumer and hence it was not a good thing for the stock market. Um what we can see now is that potent the the decline we could see here in next one that comes will probably be a deflationary bust which means it'll be similar to what we saw in 2008. In deflationary bus there will be organizations, countries, private organization uh you know hedge funds and so on that will be needing liquidity. If I get it right you go see the floor is going to open up. You'll see a lot of you know value dropping into that and liquidity will be needed. That is also why Bitcoin will drop. The Fed will not step in and close those gaps immediately. They first of all they can't they can't get out to it and especially if we have a what I can see as a private private credit crisis developing and you'll see the more opaque structure of that uh potential setup there you'll have a lot of holes opening up everywhere liquidity will be needed liquidity meaning dollars and it doesn't mean gold it doesn't mean bitcoin in that setup I don't think golders will do well and I still think you're going to see a massive decline uh first but the rally that we have seen is telling us that it's setting up for something quite extraordinary. And if you look to a ratio like uh SPX versus gold, so SPX to gold ratio, it has clearly broken lower and that we have only seen four times in a century. That was in uh 1929 when there was a speculative bubble and gold started to outperform uh the the uh the stock market. We saw it again then in 1971 when we had Nixon coming out coming out and and and doing the uh temporary uh what do you call that abandonment of the convertability of uh to gold and then we had in 2000 when we had a spacuit.com bubble this time I think we have a combination you have what you had in 71 where it was a starting a beginning to a uh losing faith in the in the financial system because that is what happens when the all of a sudden you just print money. You don't it's just connect not connected to gold any longer but that we have now as well and we have a situation also where you have a speculative bubble so I think you have the d the double of that and if you look to that ratio uh then that decline could suggest that gold by far could outperform the stock market in the coming 10 years uh so I think you'll see gold will do extremely well over the next many years but does that to out rule rule out that you cannot see gold declining in dollar value. No, because in a deflationary crisis, you probably see that you need real dollars. So, I still think there's going to be somewhat of a pullback and then you'll see it going to rise. But, but yeah, definitely gold is uh going to outperform Bitcoin and again, we need to start short, middle, and uh long term. Long term, you're going to see gold by far outperforming Bitcoin and by far being a very very uh solid asset. And by that by the way into the next you can say next many many years when we through the first part of this crisis I think you'll see commodity companies in general will do fantastic. >> Do you have a gold chart by chance? >> I probably have a gold chart here. Let me see if I can get something up here. Let's see if we have uh let me see. I have a something I call for. Yes, I have one here which is the or um [clears throat] where we you know we had the old top here back in 2011. We had the decline. Then we probably had something of a move higher which you know this consolidation here was really a long one and a strong one and when it broke here that is obviously very very important. It does not take away that you can see a big decline and I think you are actually going to see that big decline. I don't think we are in a situation where you just see this going higher if the Dixie is going to the 120 which I think is going to go to and I think liquidity will be everything but in the greater scheme of things I mean even I mean everything is correcting also but in the bigger scheme of things if this is going to happen then this move here is going to be absolutely fantastic and uh and I think if you're going to see that let's see if I have a little go long-term chart here somewhere think I have let's um find it now. But I definitely think we'll see that that this move here will bring us into you know above 10,000 15,000 and I think into the 2030s you'll see gold there are you know credible calculations that can suggest that gold can go even to as high as um above 30,000 uh dollar per per ounce. Uh but again I would wait to see what happens into a deflationary bust. But bottom line is any significant pullback, it's a buying opportunity. >> Yeah. Yeah, definitely. Definitely. I mean, this this this has been strong uh stronger than I expected. No doubt about that. Uh wrong on the short-term outlook though. No doubt about that. Uh but um but let's see if the pullback comes and then we'll see that because I think gold will be part of also redefining the monetary uh setup regime that we have at when when that comes um when when that comes around. And when will that happen? that will normally come about when the time when we start to see potential backflation the moment when the dollar starts to decline in a strong manner you'll see that there will be some kind of uh you know need for a reshuffing of things what I talked about earlier there will need to be a sound monetary system to support the economy and the world and that will again as I see it become a you know where gold will have its uh its place and uh it will not be bitcoin it will be gold and um we'll just have to see what will the the pullback that I expect here mean we will see then uh you know there are a lot of my know fellow analysts out there that thinks that it's just going to keep going higher here and I think maybe that's the dangerous um perception at this point but again I was wrong before so let's see how it goes this time >> yeah I think the the I would agree with a lot of your points I think it's a reflection or a referendum on what's happening within the global economy from a fiscal point of view if you look at the US just the US $40 trillion in debt they're trying to get these interest rates down so their interest payments are are can become lower. They're paying a trillion dollars a year in interest payments. But it's just not the US. It's anywhere and everywhere in the world. Like there's just things are out of control. And then if you look at inflation, to me, this is the real issue. I know you think inflation is going lower. I don't think it is. And I think this is telling us there's serious problems out there. We continue to see these central banks around the world buy 25% of all gold production. That's been the big trend in the last three or four years. Now we have new players stepping in. You mentioned Tether earlier. It's estimated they have bought or acquired 80 to 100 tons of gold here just in the last six months. Okay. The other thing Tether is doing, they're also buying Bitcoin, but they're they're a lot more aggressive when it comes to gold bullion. They're also buying gold royalty companies. They've already taken positions, I believe, in three or four royalty companies. The other thing that I find quite interesting now is you're starting to see some US uh funds get involved in in the gold space. There's a a big firm out of New York called Elliot. They've own a large stake in Triple Flag Precious Metals. They just took another stake in OSCO royalties and they also went activist on Barrett Gold. So when you see something like this happening, of course you see a lot of head headlines on it. Then you get other funds looking at it, right? So I I think myself uh gold this is just the beginning and and I would agree if you see any significant pullback you got to get long and I know a lot of people like to draw parallels between gold and bitcoin and they refer to bitcoin as digital gold I see none whatsoever until central banks and governments start buying bitcoin never going to happen >> I I but you can look at also you can look at certain charts you can look at the the ratio between bitcoin and and gold and it's quite clear that there is a I think there's going another top in that and that's where I think I will challenge say Bitcoin short-term again could outperform gold uh quite a lot and I think even gold will drop but uh in a longer time frame there's no no doubt about my where which horse I would be betting on >> now I didn't ask you about silver gold's up 50% on the year silver's up over 70 any any views on silver >> well the there's the the move that we see I think I think there's a level around 65 that I think it's going to to respect and I again I have to It's a little it feels a little uncoordinated also with gold. Gold was up and then all of a sudden silver spikes now and silver is really an industrial product and if you look at it it's not really resonating with what we see in the economy in terms of so I think there's a lot of people have been front running the inflation narrative and I I know I hear what you're saying. Uh I just don't think the inflation will be what can carry it through a a financial sorry a financial crisis but also a very sharp deflation. But I take the point and I again I think uh both silver and gold will be a completed much much much higher levels than we are today. Again silver and gold have been front running things a little too much I think. So I I think there's going to be a pullback but let's see. >> So we talked we discussed a lot of things here in the last few minutes Henrik and I want to thank you very much. I just want to summarize a few of your points. So you're really you're still bullish on the S&P. You think uh so right now let's just say the S&P is at 6,800. you see it going up to 7500 or 7,800 here in the next couple of months. Could be could be a lot faster. Uh you're bullish on Bitcoin, so it's currently trading in the low 90s. You see that ripping up to 140,000 and you're still bullish on gold? I'm sorry, did you throw out a target on the gold price here in the short term? I I think I think your short term I don't know but there is we need to see when the dollar starts to strengthening and and after that bottom is in on the dollar which I think is going to be around January as well then when you see that then I think it's it's over for the rally both in gold and silver and Bitcoin for that matter but but I think then you're going to see it. So I'm not sure that the if gold is going higher I don't know maybe maybe not. I think silver can go to 65, but I think gold is going to go to to drop a lot actually. And I I I hate to say it, but I I wouldn't be surprised to see it way below 3,000. >> Yeah. But that's on the back of an economy and a faltering >> back back of the back of back of the the decline. But shortterm here, I mean, what I've seen over the last few uh the last week since we had the top there, I think that is still a correctional structure. So, I would not be betting too much on that move. Can be wrong. Let's see. because the only thing that will be driving it really will be when the dollar starts to uh to rally and if that rallies then gold will probably not be you know fairing so well >> and just the last point you think the US is going into a recession and that's going to happen by Q1 of 2026 >> I think when we look back in time at some point it'll be January March uh February or March that will be the beginning of that month and if I had to guess I'll say February >> well this has been a great discussion and I want to thank you very much for spending time with us today if somebody would like to follow you online or read your se research where can they go? >> Yeah, so first of all I'm very active on X and they can find me at Henrik Seabour. Uh we also uh at the Swiss blog we also publish um a lot of macro work uh for uh institutional clients um and then I have a substack also that people can follow. So try to go look me up there. >> Henrik once again thank you and good luck in 2026. Thank you. Likewise, James