Saxo Bank’s 10 crazy predictions for 2023: “The war economy will dominate”

Investing.com – “The days when low interest rates fueled dreams of a harmonious world built on renewable energy, equity and independent central banks are gone. In 2023, world economies will switch to War Economy mode, where dominant economic interests and self-reliance prevail over globalisation.” Saxo Bank, which has just published its report on the “crazy” developments of the coming year, speaks so clearly.

Here are the bank’s 10 “crazy” predictions:

1. Billion-dollar coalition creates a new “Manhattan Project,” a trillion-dollar plan for energy
The world’s ever-increasing energy need pushes the world’s richest people to start an R&D project that the world has not seen since the Manhattan Project brought the first atomic bomb to the USA.

2. French President Emmanuel Macron resigns
The political stalemate in France and the rise of Marine Le Pen after the 2022 elections put President Macron into a corner, forcing him to resign from politics and resign from his post.

3. Gold rises to $3,000 after central banks fail to control inflation
Gold rallies to $3,000 as markets and central banks realize that the idea that inflation is temporary is wrong and that prices will stay higher for longer.

4. The European Union establishes its own armed forces
In the face of the ongoing difficulties in the region and a US army that does not fulfill its traditional global protector role, the European Union agrees to create its own armed forces to defend itself against various geopolitical risks such as the Russia-Ukraine war.

5. A country agrees to ban all meat production by 2030
A country that wants to be one of the world leaders on the road to net zero emissions decides not only to impose a heavy tax on meat, but to ban domestic production altogether.

6. Britain goes to referendum against Brexit
After a recession and major domestic repression, the UK is plunged into political turmoil that will end with a Brexit abandonment referendum.

7. Widespread price controls to limit official inflation
History tells us that the war economy brought about rationing and price controls. This time, the situation is no different, as managers start to impose strict price controls, leading to various undesirable consequences.

8. OPEC+ and “China” agree to leave IMF and deal with new reserve assets
Sanctions against Russia cause widespread turmoil over the movements of the US dollar in countries around the world that do not see the US as an ally. Countries that want to get rid of this leave the IMF and create a new reserve asset.

9. Dollar/yen pegs at $200 as Japan overhauls its financial system
After the Japanese yen’s difficulties in 2022, the Bank of Japan tries to prevent the currency from depreciating. If long-term success is not achieved, Japan will restart its entire financial system. The public reaction to the rapidly rising inflation reaches a feverish peak, while the dollar/yen rate rises to $160 and $170. Once the dollar/yen pair goes above $180, the government and the central bank step in and set the $200 limit.

10. Tax haven ban destroys private equity
With the war economy, there is a greater focus on national interests and the ability of sovereign countries to defend themselves. In this sense, OECD countries turn their attention to tax havens and draw their strongest weapons and ban them completely.