FX.co ★ Saxo Bank warns about tough global challenges in 2024

Saxo Bank, which astonishes market participants with regular jaw-dropping forecasts every year, has unveiled new predictions. One of them, the end of capitalism in the US in 2024, has come as a bombshell.

Remarkably, even fantastic forecasts sometimes come true. Foreseeing an unexpected response, analysts at Saxo Bank say that they are just flirting with this idea, so their outlook should not be taken seriously.

Analysts at the Danish investment bank presented a series of forecasts for 2024 under the pessimistic title The End of Path. They warn about a “series of unlikely but underappreciated” events that if they were to occur, would “send shockwaves across the financial markets.” Saxo Bank cautions about two tough challenges that will have an impact on the US: the end of capitalism and the first unconventional presidential elections.

The bank warns that the global economy is approaching the end of “the old normality”. Analysts consider new technology with apprehension. Though it somehow solves ongoing problems, it entails new troubles, sometimes even more dangerous. Experts forecast that on the back of the US presidential election in 2024, the authorities will have to ramp up fiscal spending to avoid economic woes. However, due to mounting inflationary pressure and capital flight, demand for US Treasuries will be poor that, in turn, will push their yields to high levels. To make borrowing cost less volatile, “under intense pressure from the White House, Congress makes capital gains and interest income on US Treasuries tax-free”. “This dramatic move marks the end of capitalism, as money rotates from private corporations to the public, and holding riskier assets becomes more expensive,” Saxo Bank predicts.

Another outrageous forecast is that Robert F. Kennedy Jr. will win the presidential election. It will be the first victory of an independent candidate in US history.

Analysts made an amazingly bullish forecast of crude oil. The benchmark Brent grade will soar to $150 a barrel in 2024 from the current $78.5. Therefore, Saudi Arabia, the OPEC de facto leader, is shifting its economic priorities with tourism high on the agenda. Moreover, Saudi Arabia will buy European soccer’s Champions League in order to take it global. Nowadays, it is one of the most prestigious soccer tournaments in the world.

The threat to the world comes from a generative AI deepfake which could trigger a security crisis. This groundbreaking technology capable of creating texts and images was developed to boost labor efficiency of employees. The AI bandwagon has been rolling around the world so that all content on the Internet could be generated entirely by chatbots. Saxo Bank predicts that crooks will frame up a high-ranking official in a developed country through deepfake. This event will convince the authorities to take action to tame the AI hype. On the other hand, tough regulation will harm risky investments.

Oddly, analysts at Saxo Bank even foresee a health crisis because the population will be prone to give up sports and indulge in junk food. As a result of such an unhealthy lifestyle, global adult obesity rates shoot up in 2024.

Analysts also expect the EU authorities to introduce a wealth tax of 2%. Besides, the countries with trade balance deficits might enter into an agreement on new mutually beneficial trade practices.

Curiously, economists at Saxo Bank do not aim to produce perfectly accurate forecasts. They strive to peep into the foreseeable future to mitigate risks for their clients. “It’s all about provoking thought processes, and what I’ve found over the last 21 years is that boards like it when they’re doing forward planning, central banks like it for the risk mitigation and I think our clients love it because it’s engaging — it’s like being at a good dinner table conversation where people are pushing against each other,” analysts explain their viewpoint.