Analysts at Danish Saxo Bank have published traditional "shocking predictions" for 2024. They suggest what will happen if these unlikely events come true that could shake the global economy. According to experts, the "old normality" that the world knew before the pandemic cannot be returned, and the future is uncertain.

Oil for $150 and the creation of the World Champions League

Saxo Bank experts expect oil prices to rise to $150 per barrel, which will give Saudi Arabia an impetus for a radical restructuring of the economy aimed at abandoning dependence on oil revenues. Tourism and the entertainment industry are actively developing in the country. At the same time, the state's economy is supported by high oil prices and OPEC+ control over the supply of "black gold" on the market.

In recent years, Saudi Crown Prince Mohammed bin Salman, a well-known football enthusiast, has led the renewal of the Saudi Professional League, focusing on acquiring world-class players. This has helped Saudi Arabia become one of the top 10 football leagues in the world. However, against the background of rising oil revenues, Saxo Bank analysts see a great opportunity for the kingdom to go even further and buy the UEFA Champions League, one of the most prestigious football tournaments in the world. After that, the Saudis will be able to transform it into a global club competition, which FIFA has previously tried to do, but failed due to resistance from UEFA and the Association of European Clubs. Thus, the FIFA World Champions League is becoming a reality: a significant number of games will be played in Riyadh. As a result, 48 teams will take part in the new competition: European clubs, as in the current format of the UEFA Champions League, are guaranteed 32 places, Asia/Middle East, Africa and America - five places each in the tournament, and the remaining ones are Oceania.

The health crisis over obesity drugs

GLP-1 drugs are being touted as a solution to the global obesity epidemic, but the simplicity of taking pills forces people to stop exercising and increase their intake of unhealthy foods. Since the supply of GLP-1 anti-obesity drugs will lag behind demand in 2024, the world will see an increase in obesity rates and related health problems, which will lead to a decrease in global productivity.

The GLP-1 market is expected to reach $71 billion in 2032, and expectations of rapid growth and profitability have already led Novo Nordisk to become the most expensive European company listed on the stock exchange. Recently, two studies have shown that GLP-1 also reduces the risk of cardiovascular disease and limits the progression of kidney failure in people with chronic kidney disease.

As the supply of GLP-1 anti-obesity medicine increases, prices will decrease, and governments will decide to classify anti-obesity drugs as vital to improve public health and stop the obesity epidemic. However, by fighting the obesity epidemic, governments can save costs in other parts of the health system as overall health improves and the number of diseases caused by obesity decreases, which will increase global productivity.

Because pills can keep weight under control, people stop exercising or eating a healthy diet, which will lead to a serious health crisis. In 2024, the global adult obesity rate will rise from the current 39% to 45%, which will lead to many other side effects, such as an increase in the incidence of diabetes or even a surge in cardiovascular disease, an increase in injuries due to decreased muscle strength and overall weight loss, as well as disruptions in the immune system. An increase in the number of diseases will lead to a drop in global productivity.

The end of capitalism in the USA

The US government will have to significantly increase budget spending in the run-up to the 2024 elections in order to support the economy and avoid social unrest. Due to continued inflationary pressures and the repatriation of capital by foreign investors, demand for U.S. Treasury bonds remains sluggish, which provokes a sharp jump in their yields. To normalize the cost of loans, the U.S. government will exempt income from government bonds from taxes.

Against the background of increased spending, the US budget deficit will quickly exceed 10% of GDP. Attention will be focused on the stock market, where Eli Lilly, Novo Nordisk, JPMorgan Chase, LVMH and ASML will join the club of the most expensive stocks. The twelve most expensive securities will grow rapidly, and the financial gap between investors and non-investors will widen.

The U.S. government will realize that political stability depends on its ability to continue financing huge deficits by increasing Treasury bond issuance and, consequently, lowering interest rates.

Increasing the intrinsic attractiveness of U.S. Treasury bonds compared to stocks will become critically important. Under strong pressure from the White House, Congress will exempt capital gains and interest income on U.S. Treasury bonds from taxes. Since government debt is in the hands of domestic investors, the cost of financing will become less volatile.

According to Saxo Bank experts, this step will be the end of capitalism, as money will move from private corporations to the state, and ownership of riskier assets will become more expensive. Despite the government's inability to solve the problem of inequality, reducing the cost of borrowing will extinguish social unrest. This will be followed by a long period of nationalization and government intervention in critical industries that will struggle to attract capital.

The deepfakes created by generative AI and the national crisis

Generative AI will become a threat to national security. Governments will crack down on AI with new restrictions, dampening the hype around new technologies as venture capitalists flee the industry. Public distrust of AI-generated news will grow, and governments will introduce new laws allowing only a small group of organizations to distribute public news.

While some leading economists see generative AI as a great productivity tool that will boost economic growth in the coming decades, others see it as a potential new weapon. In a high-stakes game, criminals will be able to create the most sophisticated deepfakes in the world to gain access to classified information and rob officials.

Next, governments in developed countries will require companies to tag AI-generated content and force OpenAI and Google to restrict third-party access to large language models. From the national security crisis, society will take a step towards complete distrust of information on the Internet, since the content created by artificial intelligence will reach 90%. After that, only government-approved companies will be able to publish news.

Creation of the "Club of Rome" by countries with budget deficits

Calculations between countries with budget surpluses and deficits are becoming more complicated. The United States, whose debt situation has become uncontrollable, will form a special "Roman Club", which will include 6 more countries with budget deficits. They will work together to create new trade conditions aimed at reducing the deficit. The club will include the USA, Great Britain, India, Brazil, Canada and France. Their goal is to implement a global economic reset by creating a more equitable and stable system. However, such an adjustment would be painful for the countries with the highest surpluses - China, Germany, Norway, Japan, the Netherlands and Singapore.

Robert Kennedy Jr.'s victory in the presidential election in 2024

In 2024, a recession will begin to spread in America, which will be the impetus for a radical change in political views. After four years of Trump's rule, and then four years of Biden's rule, voters' enthusiasm for the older candidates is waning. Biden's support is falling as the economy and labor market enter a tailspin, even though inflation remains high. The public links Biden's mismanagement to military conflicts in the world, rising oil prices, basic goods and rents. Meanwhile, Trump still has supporters, although his behavior is gradually reducing their number.

This will lead to the fact that in 2024, for the first time in the history of the United States, an outside candidate, Robert Kennedy Jr., will win the presidential election. His populist stance against conflict-mongering Democrats and against corporate elites will resonate with both disgruntled traditional Democrat supporters and Trump supporters. A new political era in the United States will begin with a sharp departure from plutocracy, as voters demand an end to drastic inequality and injustice.

As a result, Kennedy's message of support for peace and a promise to end abuses in the US healthcare system and destroy excessive corporate power will lead to a sharp decline in defense, pharmaceutical and medical companies, and technology giants will trade unstably on fears that a large-scale campaign against monopolists is coming.

Japan's "happy 7%" GDP growth and the regulator's refusal to control the yield curve

The era of deflation in Japan is over, and wage growth has resumed. The spring negotiations in 2023 led to a 3.6% increase in salaries, and in 2024 their growth may be more than 4%. The fiscal boost from the proposed reduction in the consumption tax rate will encourage the Japanese to move away from their savings mindset. As the current presidential term ends in September 2024, Prime Minister Kishida and his administration are pursuing a series of populist measures that will further support domestic demand. With increasing demand, enterprises will increase their capital investments. At the same time, the country's labor supply is declining due to an aging population. This will lead to an increase in wages and create a positive economic cycle.

Japan will make economic changes by adopting a technology dissemination program that will help increase productivity despite labor shortages. More and more technology companies will start investing in Japan in 2024 on the back of government support. Saving on technology will allow the Japanese government to manage debt and continue fiscal easing to provide a sustained boost to economic growth, inflation and wages.

As a result, due to the support of the policy of controlling the yield curve, the Japanese economy will be overly stimulated, as real rates will decrease, nominal yields will be limited, but inflation expectations will rise. The Bank of Japan will be forced to end its policy of controlling the yield curve in 2024. This will cause a stir in the global bond markets, as Japanese investors will start to return money home, and the yen will strengthen.

The EU wealth tax and the decline of luxury brands

Since the EU needs more funding to combat climate change, health and education, and billionaires pay little taxes, the European Commission, according to analysts at Saxo Bank, will introduce a 2 percent tax on wealth.

According to Global Tax, there are 499 dollar billionaires living in the EU, who pay the lowest tax as a percentage of wealth compared to billionaires from Asia and America. A 2% wealth tax for EU billionaires will bring 42 billion euros in additional revenue to the treasury.

However, the new tax will cause a shock in the luxury industry. Recent studies have shown a relationship between the pursuit of luxury goods, income levels and wealth inequality. The additional tax burden on billionaires will reduce the demand for luxury goods, and investors will begin to get rid of shares of companies of European luxury brands.