In the realm of economics, macro strategist Henrik Zeberg believes that the current state of the economy is like an “everything bubble” that is poised to expand further. With 143,400 followers on the social media platform X, the economist shares his views that the current bubble has not yet reached its peak.
Zeberg points to historical data to support his theory, highlighting the Market Capitalization to GDP ratios of major bubbles in the past. He notes that the current ratio of 188% is higher than previous significant bubbles like those of 1929, 2000, and 2007. When factoring in the Crypto Bubble and Private Equity Bubble, Zeberg predicts that the “Everything Bubble” will burst when a recession hits.
According to a report from Ernst & Young (EY), private markets have experienced significant growth over the past decade, with assets under management (AUM) increasing from $9.7 trillion in 2012 to an estimated $24.4 trillion by the end of last year.
Zeberg also points out the tendencies of central banks like the Federal Reserve and the European Central Bank (ECB) to cut rates before a recession. With the ECB recently lowering its Fund Rates, Zeberg questions whether the economy is heading towards a new economic expansion or if it is nearing a recession.
Looking ahead, the Federal Reserve is expected to maintain its rates at the upcoming Federal Open Market Committee (FOMC) meeting on June 12th. Investors are advised to stay informed and exercise caution when making high-risk investments in Bitcoin, cryptocurrency, or digital assets. The Daily Hodl reminds readers to conduct their own research and be aware of the risks involved in financial transactions.
