Eight ‘outrageous predictions’ from Saxo for 2024

Saxo has shared its 2024 Outrageous Predictions focusing on the US presidential election and the potential impact of artificial intelligence and the knock-on effects of Ozempic.

The firm’s predictions for the year ahead are:

• The end of capitalism in the US

The US government is forced to increase fiscal spending exponentially amid the 2024 elections to keep the economy going and avoid social unrest. Due to lingering inflation pressures and foreign investors repatriating capital, demand for US Treasuries remains sluggish, provoking a spike in US Treasury yields. In a desperate attempt to normalise borrowing costs, the US government makes income from government bonds tax-free.

• GenAI deepfake triggers a national security crisis

Generative AI, hailed as a productivity boon, becomes a national security threat after a daring AI deepfake heist against a high-ranking official in a developed country. Governments crack down on AI with new regulations, puncturing the AI hype as VCs flee the industry. Public distrust in AI-generated news soars and governments impose new laws, allowing only a small group of entities to disseminate public news.

• Robert F. Kennedy Jr wins the 2024 presidential election

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In 2024, for the first time in the history of the US, a third-party candidate, Robert F. Kennedy Jr, wins the US presidential election. His populist platform against the warmongering Democrats and against the corporate elites resonates with both disgruntled traditional Democratic and Trump supporters. A new political era in the US begins with the dramatic pivot away from plutocracy, as voters demand an end to drastic inequality and injustice and the end of forever wars.

• Luxury demand plunges as EU goes Robin Hood and introduces wealth tax 

As the EU needs more funding for various policy goals, including climate change mitigation, health care and education, and the population realises how little in tax billionaires are actually paying, the EU Commission implements a law that annually taxes 2 per cent of wealth. The law sends shockwaves through Europe’s luxury industry, with the luxury behemoth LVMH plunging 40 per cent.

• World hit by major health crisis as obesity drugs make people stop exercising

As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.

• Deficit countries form ‘Rome Club’ to negotiate trade terms

The sustained and worsening divergence in current accounts between a group of surplus and deficit countries is a result of managed currencies and is not sustainable long term. As the US debt situation has become uncontrollable, a group of six deficit countries form a “Rome Club” to cooperate on reducing deficits by collectively negotiating new world trade terms with the surplus countries. We see gold, silver and cryptocurrencies doing very well in an unpredictable environment for the world’s reserve currency and the unsustainable current accounts among deficit countries.

• Japan’s ‘lucky 7 per cent’ GDP growth rate forces Bank of Japan to abandon yield curve control

Japan was an economic powerhouse for many years before the bubble burst in 1991 and a long period of stagnation began. Corporate profits and wages were depressed, and an ageing society meant labour supply shortages and a drag on consumption. But a new bottom is found as deflation ends and wages and private capex pick up, bringing productivity gains and fast-paced economic growth.

• With oil at $150, Saudis buy Champions League soccer franchise

Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage as Crown Prince Mohammed bin Salman manages to create a World Champions League after buying the UEFA Champions League franchise.