Are We Facing the Largest Recession Since the 1930s?
Renowned macroeconomist Henrik Zeberg has raised alarms about the global economy nearing what could be the most significant recession in nearly a century. Drawing comparisons to the Great Depression, Zeberg attributes this looming crisis to years of aggressive central bank monetary policies, which have led to extensive market overvaluations now described as the ‘everything bubble.’
What is the ‘Everything Bubble’?
According to Zeberg, the term ‘everything bubble’ reflects the dangerous overextension of global markets. This bubble is driven by liquidity injections from central banks that have fueled soaring prices in equities, cryptocurrencies, and other assets. However, his proprietary business cycle model—which has accurately predicted recessions since 1950—shows that the bubble is nearing its breaking point.
Zeberg’s analysis indicates that leading indicators signaled the downturn as early as November 2024. These indicators, historically reliable predictors, were instrumental in flagging the 2007-2008 financial crisis before it unfolded.
Parallels with the Financial Crisis of 2008
Zeberg draws notable similarities between the current economic climate and the financial crisis of 2008. Back then, his leading and coincident indicators rolled over just weeks before the recession officially began in December 2007. He warns that, much like before, the global economy is ‘closing in’ on a recession.
“The coincident indicators are the ones telling us when it begins, together with our imminent recession indicators. This is when the Titanic actually sinks! Before the Great Financial Crisis, they rolled over in November 2007. The recession began December 2007. Market topped October 2007. These are suggesting that we are closing in on a point where it could begin! I say it again. ‘Closing in’! However, not signaling it just yet – but closing in,” Zeberg noted in a statement shared on November 26, 2025.
Markets Show Temporary Optimism
Despite looming fears, Zeberg acknowledges that markets have entered a final phase of ‘euphoria,’ driven by central bank liquidity. He expects equities, Bitcoin, Ethereum, and other cryptocurrencies to rally until December. However, investors should tread cautiously, as this short-term upward trend may create a false sense of security.
Zeberg also noted the U.S. dollar’s bottoming pattern, signaling potential strength into 2026. This reinforces the volatile mix of market optimism and apprehension currently gripping investors worldwide.
What Lies Ahead?
While markets such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have recently surged, many experts describe this behavior as reflective of a ‘late-cycle’ environment. Much of the growth stems from speculative investments in tech and AI-linked firms, raising questions about sustainability amidst slowing economic momentum.
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The Takeaway
Global markets are riding a wave of optimism, but underlying economic indicators tell a more sobering story. As the ‘everything bubble’ edges closer to bursting, now is the time for investors and individuals to prepare carefully. Stay informed and make data-driven decisions to protect your financial future in uncertain times.
