A Recession Signal Just Triggered — Here's What Happens Next | Henrik Zeberg

Summary

Henrik Zeberg, head macro economist at SwissBlock, argues that while financial markets are in a euphoric blow-off top, the real economy is quietly rolling over into a structural recession. He expects a final melt-up in risk assets driven by a weaker dollar and rotation into small caps and crypto, but then calls for a bursting AI bubble, a crash in Bitcoin below $20,000, and a massive dollar rally to 120+. He also outlines his 'Solomon Protocol' to rotate from equities into bonds and details near-term bullish trades in gold and Bitcoin before a subsequent bearish reversal.

• Zeberg's macro indicator signals a structural recession is imminent, though he awaits two more signals (liquidity rollover, falling short-term yields) to call it.
• Real economy deterioration (labor, housing, consumer) contrasts with financial market exuberance, mirroring late-cycle dynamics of 2000 and 2007.
• Markets haven't topped yet; he sees a blow-off top with S&P and NASDAQ potentially up 15% and rotation into small caps (Russell 2000) and risk assets.
• Near-term dollar weakness to 93-94 will boost gold and Bitcoin, which should see short-term bounces.
• Subsequently, he expects the AI bubble to burst, NASDAQ to crash like 2000, Bitcoin to fall below $20,000, and the dollar to surge to 120+.
• For conservative investors, his structural recession signal today suggests stepping out of equities into bonds 100%.
• He is contrarian on inflation, expecting disinflation due to weak consumer savings, and sees the Fed as overly hawkish.