"Low interest rates no longer foster aspirations of a peaceful world based on renewable energy, equality, and autonomous central banks. World economies will enter War Economy mode in 2023, where sovereign economic benefits and self-reliance will overcome globalisation." That's how adamant Saxo Bank, which has recently released its report on the year's black swans, is.
Black swans are occurrences that appear to be unforeseeable, have a significant socioeconomic impact, and that, once they have occurred, are evaluated with hindsight and eventually become events that might have been predicted.
The following are the Danish bank's ten "crazy" predictions:
1. A multibillion-dollar coalition forms the new 'Manhattan Project,' a trillion-dollar energy plan.
The world's ever-increasing need for energy causes the world's wealthiest to band together and undertake an R&D effort on a scale not seen since the Manhattan Project handed the United States the first atomic bomb.
2. Resignation of French President Emmanuel Macron
Political gridlock in France, combined with the ascension of Marine Le Pen following the 2022 election, has forced President Macron to leave politics and resign from office.
3. Gold jumps above $3,000 after central banks fail to keep inflation under control.
Gold jumps above $3,000 as markets and central banks realize that the notion that inflation is temporary is incorrect and that prices will remain high for a longer period of time.
4. The European Union develops its own military forces.
With the region's issues continuing and the United States' military failing to fulfill its traditional position as global defender, the European Union has agreed to establish its own armed forces to defend itself against numerous geopolitical hazards, such as the Russia-Ukraine war.
5. One country has agreed to phase out all beef production by 2030.
In order to become a world leader on the path to net-zero emissions, one government decides not only to impose a high cost on meat, but also to outlaw domestic production entirely.
6. The United Kingdom holds a referendum on Brexit.
Following a recession and significant internal pressure, the United Kingdom is mired in political turmoil, which will culminate in a vote to depart the EU.
7. Widespread pricing controls to keep official inflation under control
Rationing and price controls have historically been associated with wartime economics. And this time is no exception, as rulers begin to impose stringent pricing controls, which have a range of unforeseen repercussions.
8. OPEC+ and 'Chindia' abandon the IMF in favor of new reserve assets.
Sanctions on Russia have caused enormous havoc in countries throughout the world that do not regard the US to be an ally. To break away from this, they exit the IMF and establish a new reserve asset.
9. The USD/JPY exchange rate is locked at $200 while Japan overhauls its banking system.
Following the struggles that the Japanese yen faced in 2022, the Bank of Japan attempts to keep the currency from falling. In the absence of long-term success, Japan will restart its whole financial system. As public outrage over increasing inflation reaches a fever pitch, the USD/JPY jumps between $160 and $170. When the USD/JPY crosses $180, the government and central bank intervene and set a cap at $200.
10. The prohibition on tax havens destroys private capital
The war economy brings with it a greater emphasis on national interests and the power of sovereign countries to assert themselves. In this sense, the OECD countries focus their attention to tax havens and bring out the big guns, outlawing them entirely.
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