Could the world be heading for a bumpy path? "Shocking predictions" for 2024 unveiled

Denmark's Saxo Bank has unveiled its "Shocking Predictions for 2024." Investment experts project a surge in crude oil prices to $150 per barrel, a fresh tax in the EU, a dramatic reduction in physical activity, a crisis triggered by AI, and the unexpected victory of a candidate in the US presidential race.

Saxo Bank's "Shocking Forecasts" is a conventional thought experiment that envisions a series of improbable events that, if they materialize, could send shockwaves through the financial markets. Every year, Saxo Bank releases these forecasts to spotlight potentially risky scenarios. However, these forecasts are not the bank's primary predictions but a creative exploration of alternative realities.

In the 2023 predictions, Saxo Bank's "Shocking Forecasts" primarily focused on the potential outbreak of war. These predictions included the birth of EU military units, a surge in gold prices to $3,000 USD, and a Brexit withdrawal referendum. So what does the upcoming year have in store according to these predictions?

Saxo Bank's forecast highlights that the world's tranquil trajectory post-Great Financial Crisis - marked by stable geopolitics, low inflation, and low interest rates - has been disrupted, primarily due to the pandemic. According to the bank, by 2024, the world would have reached the end of its smooth course, and ahead lay a terrain filled with perils.

So how would the world deal with the definitive end of the "old normal", and how would new technologies address old issues whilst creating new, perhaps more dangerous dilemmas? Saxo Bank presents several scenarios.

The first prediction, offered by Ole Hansen and Kim Cramer Larsson, states that oil prices may hit $150 per barrel. According to their perspective, Saudi Arabia will use high oil prices to modernize its economy and boost tourism, in a bid to minimize its reliance on oil-based revenues.

Prince Mohammed bin Salman, with the backing of FIFA, takes control of the UEFA Champions League, one of the world's most prestigious football competitions. Upon acquisition, a global league is formed with a good number of matches taking place in Riyadh.

Manchester United's stock price doubled, and Brent oil prices skyrocketed to $150 per barrel. Manchester United reaps considerable rewards from participating in FIFA's World League of Champions, making it one of the primary beneficiaries of the new Saudi initiative. Meanwhile, Brent oil prices reached record levels, with Saudi Arabia and OPEC+ effectively controlling supply and demand bouncing back post-pandemic.

In the subsequent forecast, Charu Chanana and Peter Garnry anticipate a severe health crisis, as obesity drugs discourage people from exercising.

Obesity drugs, particularly those containing GLP-1, are seen as a cure for the obesity epidemic. The market for these drugs is projected to be worth $71 billion by 2032. With these drugs becoming cheaper and more accessible, they pose a big challenge.

This leads to countries slashing healthcare spending. People grow dependent on the novel drug for their health while giving up on physical exercise and healthy dieting. The result? A surge in global obesity rates among adults: from the current 39% to 45% in 2024. This includes a host of other side effects, from an increased incidence of diabetes and a stark rise in heart diseases to more muscle strength-related injuries and a general dip in immune system efficiency.

Market impact - The demand in the processed food industry sees a significant boost, and shares of companies such as McDonald's and Coca-Cola surpass market returns by 60%.

The following prediction by Althea Spinozzi concerns the US. The US government is compelled to drastically inflate fiscal spending during the 2024 elections to uphold the economy and prevent social unrest. As a result, demand for treasury bonds plummets. Due to inflation and foreign investors repatriating capital, the US government struggles to find buyers for its treasury bonds.

The US government then exempts treasury bonds from taxation in a desperate bid to inflate demand. Hence, control over the economy is shifted from private corporations to the government. Consequently, a lengthy period of nationalization and government intervention in key sectors, struggling to attract capital, begins.

Peter Garnry predicts AI. Hailed as the boon of productivity, artificial intelligence (AI) becomes a threat. In an unforeseen turn of events, a criminal group uses the most deceptive generative AI deepfake ever witnessed, defrauding a high-ranking government official from a developed country to hand over classified information. This triggered the most significant national security crisis since World War II, ushering in an era dominated by stringent regulations regarding artificial intelligence.

The US and EU mandate that all content created by generative artificial intelligence should be labeled "Made by AI". Failure to comply will result in harsh penalties. The generative AI deepfake incident not only leads to a national security crisis but also a complete loss of public faith in online information, especially as artificial intelligence-driven content rises to comprise 90% of all online content.

Steen Jakobsen predicts that the persistent and deepening current account divide between groups of surplus and deficit nations is unsustainable in the long run. As a result, six deficit countries formed the "Rome Club" to collectively negotiate new global trade terms with surplus nations in light of the United States' unmanageable debt situation.

The "Rome Club's" six founding nations include the United States, the United Kingdom, India, Brazil, Canada, and France. Addressing current account divergence with key countries will cause discomfort for nations with the highest surplus, which include China, Germany, Norway, Japan, the Netherlands, and Singapore.

At first, Robert F. Kennedy Jr. was hardly considered a serious contender for the 2024 election, with polls indicating only about 15% voter support. But as the United States faced a recession during the spring and summer, his popularity in the polls soared.

On election day, November 5, Kennedy won the US presidential race with 38% of the popular vote, while Biden and Trump shared the remaining votes almost equitably. In the Electoral College, Kennedy's dominance is surprisingly pronounced, mostly winning areas that previously supported Trump. This marks the beginning of a new era in American politics.

The last forecast pertains to the European Union. As the EU requires extra funds for several political ends including combating the impacts of climate change, healthcare, and education, and given public awareness of how little tax the ultra-rich pay, the European Commission enacts a law taxing 2% of assets annually.

The wealth tax yields an additional tax revenue of 42 billion EUR, which is then invested in projects aimed at mitigating climate change, healthcare, education, and public infrastructure.

A modern Robin Hood-like act in the EU sends shockwaves through the European luxury goods industry. Recent studies have reflected a strong link between the desire to possess luxury items, income levels, and wealth inequality. The European Commission's new wealth tax instantly reduces market expectations regarding future demand for luxury goods. Investors flee European luxury stocks, causing a panic in the European luxury goods market and leading luxury powerhouse LVMH's shares to plummet by 40%.