Denmark-based Saxo Bank has published its 10 outrageous financial predictions for 2022.
Continuing almost two decades of tradition, experts at the bank have made the predictions as ‘consensus-smashing forecasts’ that would ‘send shockwaves through the markets’ – but only if they come to pass.
While the group of analysts and finance fundis’ predictions are historically “speculative, but made on the basis of sound economic principles”, the widely unexpected spread of the Covid-19 pandemic in 2020 called for a change in tack, with the wild calls for 2021 taking a more ‘futurist’ approach.
These included predictions like Amazon ‘buying’ Cyprus by moving its headquarters there and using its investments to influence tax laws and policies. This did not happen – although Amazon CEO Jeff Bezos did go to space.
Other 2021 predictions also proved to be a bit beyond the reach of reality: silver prices didn’t spike as expected, although commodity prices did prove to be a saving grace for many investors as Covid-19 waves waned and pushed up demand.
Blockchain technology didn’t emerge as the fake-news killer it was hoped to be. Instead, fake news and misinformation about Covid-19 vaccines ran rampant throughout the year, while the blockchain went in a completely different direction: confusing the general public with the non-fungible token (NFT) trend.
One pretty spot-on 2021 prediction was the rise of universal basic income grants, and how a shift in job trends, technology, and work-from-home policies would ‘decimate’ big cities.
While global cities are far from being ‘decimated’, they have come under immense pressure due to the aspects listed in the prediction – including South African cities, where office space sits empty and major companies are making a more permanent shift to home-office-hybrid work patterns.
A disruptive 2022
For its 2022 predictions, Saxo analysts are still taking a futurist route, but are also feeding off the sense of revolution that has filtered through much of 2021.
“As culture wars rage across the world, it’s no longer a question of if we get a socioeconomic revolution, but a question of when and how,” it said. “There is a theme of revolution and disruption, and we’ve got exciting calls for 2022 – not all of them you will like.”
“We must emphasise our annual caveat, that these Outrageous Predictions should not be seen as our official view on the market and politics. This year, more than ever, we’re trying to provoke you and ourselves to think outside the box and to engage in discussing the important topics we raise. Let the fun, and the future, begin.”
The plan to end fossil fuels gets a rain check
Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future.
Realising the inflationary threat from surging commodities prices and the risk of an economic train wreck due to the unrealistic timeline for the green energy transition, policymakers kick climate targets down the road. They relax investment red tape for five years for oil production and ten years for natural gas production, to encourage producers to ensure adequate and reasonably priced supplies that bridge the gap from the energy present to the low-carbon energy future.
Facebook faceplants on youth exodus
The young abandon Facebook’s platforms in protest against their mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles.
Back in 2012, 94% of teens had a Facebook account, while surveys suggest that today only 27% of adolescents have an account. Facebook has gone from being a vibrant hub of young people, to a platform for older “boomers”. Young people are increasingly turned off by Facebook’s algorithms turning their social media experiences into that of homogenous feedback loops of identical content, or even worse, hateful and disinforming content.
The US mid-term election brings a constitutional crisis
The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023.
In the wake of the 2022 election, a handful of key Senate and House races come down to the wire and one or both sides move against certifying the vote, making it impossible for the new Congress to form and sit on its scheduled first day of January 3, 2023. Joe Biden rules by decree and US democracy is suspended as even Democrats also dig in against the Supreme Court that was tilted heavily by Trump. Indeed, as 2023 gets underway the stand-off sees a full-blown constitutional crisis stretching over the horizon.
US inflation reaches above 15% on wage-price spiral
By the fourth quarter of 2022, US CPI inflation reaches an annualized 15% as companies bid up wages in an effort to find willing and qualified workers, triggering a wage-price spiral unlike anything seen since the 1970s.
At the end of the 1960s, the US Federal Reserve and the Fed chair then, McChesney Martin, misjudged how hot they could run the US labour market without fanning inflation. The miscue paved the way for inflation expectations getting out of control and a massive wage-price spiral the following decade. In 2022, the Federal Reserve and Fed chair Jerome Powell repeats the same mistake all over again as the post-Covid outbreak economy and especially the labour market are severely supply-constrained, making a mockery of the Fed’s traditional models.
EU superfund for climate, energy and defence announced – to be funded by private pensions
To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes.
The EU knows it needs to move fast on all fronts to bolster its defences and is also looking for a way to jump-start flagging economies buffeted by the energy and power crisis of 2021-22. French President Macron, backed by Italian Prime Minister Draghi moving to stave off Italy’s own rise of the populists, rolls out a vision for an “EU Superfund” that will address the three-fold priorities of defence, climate and the related clean energy transition.
Women’s Reddit Army takes on the corporate patriarchy
Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies.
In contrast to the often-nihilistic original Reddit Army, the Women’s Reddit Army will be more sophisticated, with women traders coordinating a long squeeze by shorting stocks of selected patriarch companies. At the same time, they will direct funds to companies with the best metrics on female representation in middle management and among executives. Instead of condemning the development, politicians worldwide welcome and support their cause.
India joins the Gulf Cooperation Council as a non-voting member
The world’s geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices.
Interregional trading zones will secure “closer to home” production and investment, combined with the security of reliable supplies from India’s point of view, and a reliable destination market from the GCC’s point of view. The alliance helps lay the groundwork for the GCC countries to plan for their future beyond oil and gas and for India to accelerate its development via huge new investments in infrastructure and improvements in agricultural productivity together with fossil fuel imports, bridging the way to a post-carbon longer-term future.
Spotify disrupted due to NFT-based digital rights platform
Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95% of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues.
Non-fungible tokens, or NFTs, are unique digital assets, the ownership of which can be established and stored on a digital ledger via blockchain tech. By leveraging NFTs, more specifically via “smartcontract” blockchains, artists could distribute music directly to listeners without centralised intermediaries taking a cut, while tracking their income in real-time— even getting paid in real-time—with listeners enjoying the knowledge that the money they are paying is going straight to the artist.
New hypersonic tech drives space race and a new cold war
The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind.
In the summer of 2021, China tested a hypersonic vehicle that could enter low orbit and later re-enter the atmosphere to then cruise toward its target. Hypersonic capabilities represent a game-changing threat to the long-standing military strategic status quo, as the technology brings asymmetric new defensive and offensive capabilities that upset the two massive pillars of military strategy of recent decades.
Medical breakthrough extends average life expectancy 25 years
Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions.
In search of slowing the natural process of aging, researchers have been studying the processes at the centre of how we age from multiple angles and with a growing arsenal of advanced technologies, from therapeutics to “prime editing” at the DNA level. The year 2022 sees a major breakthrough from a multi-factor approach, as a cocktail of treatments is put together that tweaks cell-level processes in order to extend their life and thus the life of the organism composed of those cells. It’s not cheap, but it’s effective and has already been demonstrated on laboratory mice containing human DNA, extending their lives some 30% and more.