Yields Are About to Collapse. Gold Is Not Done.
Henrik Zeberg told GoldRepublic the market is staring at the wrong fire. Sticky inflation and a sovereign debt scare are the story on the screen. The warning, in his model, is the labor market, a frozen housing market, & a consumer who cannot take another bill.
“The consumer is probably the weakest we have ever seen, and I mean even with 1929 I think we’re setting up for something that is much worse.”
He said the median American cannot carry an extra $2,000 bill. Housing is at a standstill. Job creation has been running near 16,000 a month, a level he says has never shown up outside a recession. The AI boom, in his accounting, added 1 to 2 percent to GDP without creating the jobs that number implies. Government spending kept the headline above the waterline. Neither one lasts.
“These things, when you have investment like that, they can’t go on forever, because at some point there will be a require for return.”
That is why he expects bond yields to plunge, not spiral. Inflation lags the labor market. Job creation is already vomiting. When the market figures out there is no inflation left in this tape, yields follow the jobs data down, and they follow it hard. His recession signal, he said, has never missed across eight recessions and has usually been one to three months early.
“We are heading in the direction where all of a sudden we will find out that there is no really inflation here, and yields will come plummeting down.”
The Fed, in this map, is playing with fire by reading the wrong numbers. Stagflation is what comes after the bust, not the thing already on the screen. Before that bust he still wants one last risk on phase: a dollar dip, a Nasdaq blow off, then the deflationary break. Equities and crypto get hit in the first quarter of next year. Short yields lead long yields down. Credit stress shows up.
Gold is the hold through the correction, not the trade to abandon because the inflation story is fading. He said he was wrong on how high gold could run before the pullback. He is not wrong, in his telling, on the destination.
“The pullback that we could see here, which I think can be quite severe still, is the pullback that will then set us much higher.”
He still has a decline toward $3,100 on the table, and he said he will be buying it. The next leg is the Fed stepping in once deflation shows, the same pattern he maps against 1929, when gold rose for years against stocks after the speculative bubble broke. By 2030, $27,000 to $29,000 gold would not be controversial to him, because of the debt.
“I do think that gold could go a lot higher. And I think, you know, $27, $29,000 by 2030 would not be controversial to me.”
Bitcoin, he said, can still outperform gold on the last risk on stretch, with a path he marked toward $115,000, before the deflationary bust takes crypto down with equities. Altcoins get a final blow off. Gold is what he wants on the other side of that.
What proves him wrong is simple. Housing starts selling again. Jobs reaccelerate to 80,000 to 120,000 a month. Yields drift down because growth is healthy, not because the labor market broke. Absent that, he does not think there is much time. The yields the market fears are the ones he expects to collapse. The metal he wants is the one you buy on the pullback, and hold.
