Henrik Zeberg: Why Bonds May Be Too Cheap

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Henrik Zeberg (1:30)

These are completely insanely valuation levels we have right now. We saw a 45% rally in the Nasdaq. 45% in seven weeks. And then we saw it actually in two to three weeks. It just dropped 40% almost. It's just a matter of time before it starts rumbling down.

Maggie Lake (1:49)

Hello and welcome to Wealthion. I'm Maggie Lake. Joining me today to discuss global markets is Henrik Zeberg, Macro strategist at Swissblock and founder of The Zeberg Letter. Hi Henrik, it's great to see you again.

Henrik Zeberg (2:01)

Great to see you, Maggie.

Maggie Lake (2:03)

Every time we talk, I always feel like these days I start out by saying there's so much going on. And there really is. I mean, the markets are really moving.

So there's a lot to get through. A warm welcome to everyone listening. If you have any questions about this volatile time that we are in, or would like to stress test your portfolio, you can get a free review with one of the advisors in the Wealthion Network. Just go to our website at wealthion.com. So Henrik, we have, as we talk today, we have oil prices spiking again, which is adding to these inflation concerns that seem to be roiling markets. What's your, I know you do a lot of your own bespoke work on trying to figure out what's happening with the global economy. What is your macro navigation framework telling you about growth and inflation at this point?

Henrik Zeberg (2:50)

Well, this is always where it's difficult, because it's, there is what seems to be right in front of us and what everybody seems to see. And then there is the real engine down beneath.

And if we, you know, if we take first what people are saying and what we see, well, we can see inflation apparently, you know, is stubbornly high, or we also got some TPI numbers here coming out. And, you know, we will see that, as always in this part of the cycle, that there will be a lot of narrative about how the inflation is sticky, how it's, that it's, you know, this time is different and it's not going to come down, even though the Fed and the Fed is kind of losing its, you know, the control of the situation and the bond market is blowing up and all these things.

We've just seen this before. And what we see always is that when we come to the phase, the late phase of the cycle, we will have that inflation is, you know, pushing through for various reasons, because that's where the party has been going on for such a long time. We have had such, you know, tremendous demand for capital going on with the AI boom and everything else. So all this is actually what is pushing, you know, the system, so to speak. But down beneath, and that's where we have what I call the real economy. That is where we have the consumer. We have the 70% that nobody speaks about in the US., the consumers there, and it's also, you know, probably relevant for what happens in Europe and elsewhere. But, you know, the US is the big engine here. And what we can see there is that the housing market in the US is still frozen solid.