In keeping with Saxo’s Outrageous Predictions, meat bans, soaring gold prices and the UK’s ‘un-Brexit’ vote might be on the cards in 2023.
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Saxo Bank’s “outrageous predictions” for 2023 include a meat ban, a pointy rise in gold prices and the UK’s “un-Brexit” vote.
The Danish bank’s annual report, released earlier this month, predicts that the world’s economies will move right into a “war economy,” “where sovereign economic gains and self-reliance outweigh globalization.”
The projections, while not representative of the bank’s official views, focused on how decisions by policy makers next 12 months could affect each the worldwide economy and the political agenda.
Gold hit $3,000
Amidst the bank’s “outrageous” calls for next 12 months, Saxo’s head of commodity strategy Ole Hansen predicted that the spot price of gold could exceed $3,000 an oz in 2023 – some 67% higher than the present price of around $1,797 an oz.
The report does its job projected growth all the way down to three aspects: a “rising war economy mentality” that makes gold more attractive than foreign exchange reserves, heavy investment in latest national security priorities, and a rise in global liquidity as policymakers attempt to avoid a debt fiasco of their recessions.
“I would not be surprised if commodity-driven economies need to go gold for lack of higher alternatives,” Steen Jakobsen, chief investment officer at Saxo, told CNBC’s Squawk Box Europe on Dec. 6.
“I feel gold will fly,” he added.
While analysts expect a rise in gold prices in 2023, in line with global intelligence firm CRU, a rise in gold prices on such a scale is unlikely.
“Our price expectations are far more moderate,” Kirill Kirilenko, a senior analyst at CRU, told CNBC.
“A less hawkish Fed will likely result in a weaker USD, which in turn could give the gold bulls more room and energy to rally next 12 months, pushing prices closer to $1,900 an oz,” he said.
Kirilenko stressed, nonetheless, that the whole lot is dependent upon the moves of the Federal Reserve. “Any sign of accelerating ‘hawkish’ from the US central bank would likely put downward pressure on gold prices,” he said.
The UK will vote for un-Brexit
The “outrageous prediction” most probably to occur next 12 months, in line with Saxo’s Jakobsen, is for one other Brexit referendum.
“I actually think that is considered one of the things that is going to have a high probability,” he told CNBC.
Jessica Amir, Saxo’s market strategist, said British Prime Minister Rishi Sunak and his Finance Minister Jeremy Hunt could downgrade the Conservative Party’s rankings to “unprecedented lows” as their “brutal fiscal program will push the UK right into a crushing recession”.
The bank predicted this may lead the English and Welsh public to rethink the Brexit vote, with younger voters on the forefront, and force Sunak to call a general election.
Saxo predicts that there might be one other Brexit referendum within the UK.
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Saxo’s Amir said the opposition Labor Party could then win the election and promise a Brexit reversal referendum on November 1, with it winning the “re-accession” vote.
“Business people say the one thing they’ve gained from Brexit is a UK-specific GDPR,” Saxo’s Jakobsen told CNBC. “The remainder is just increased bureaucracy,” he said.
Anand Menon, director of the UK think tank in Changing Europe, said this prediction “simply doesn’t come true”.
“I do not think there might be one other referendum and this concept [Labour leader Keir] Starmer would take this position for the birds,” he said.
Starmer told a business conference in September that his party would “make Brexit work”.
Public sentiment towards Brexit has modified for the reason that referendum, Menon said, following a vote that saw a narrow majority of 52% of voters resolve to go away the EU in 2016.
“It’s absolutely the case that public opinion appears to be changing,” he said.
Research by YouGov in November, 59% of 6,174 people polled thought Brexit had gone “fairly bad” or “very bad” since late 2020, while only 2% said it had gone “thoroughly”.
Prohibition of meat production
In keeping with a study published by Meat, it’s responsible for 57% of food production emissions Nature Foodand as countries world wide have committed to net-zero emissions, Saxo says a minimum of one country could go completely out of meat production.
One nation that “looks to remain ahead of the others” based on its climate credentials could decide to tax heavily on meat from 2025, and could completely ban all live animal meat produced domestically by 2030.
In keeping with a study published by Nature Food, meat is responsible for 57% of food production emissions.
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“I would not be surprised if schools in Denmark and Sweden completely ban meat, it’s definitely moving in that direction,” Jakobsen of Saxo told CNBC. “To us old people, it seems like madness,” he added.
The UK, European Union countries, Japan and Canada are among the many countries which have legally committed to net zero emissions.
The UK’s Department for the Environment, Food and Rural Affairs said there have been “no plans” to introduce a meat tax or ban meat production when contacted by CNBC.
An eventful 12 months 2023?
Saxo’s other “outrageous predictions” for next 12 months include the resignation of French President Emmanuel Macron, pegging the Japanese yen to the US dollar at 200, and the creation of a unified European Union army.
Nevertheless, all forecasts must be taken with a grain of salt. Jakobsen of Saxo told CNBC that there’s a 5-10% probability of every prediction coming true.
The bank has made a set of “outrageous predictions” every 12 months for the last decade, and a few of them have actually come true – or a minimum of got here close.
In 2015, Saxo predicted that the UK would vote to go away the European Union after the UK Independence Party landslide, predicted that Germany would enter a recession in 2019 – which the country narrowly avoided – and bet that Bitcoin would experience a meteoric rise in 2017 .