Topic: 2017-01-09 ABC Australia - Saxo Bank lists ten "outrageous predictions" for 2017 (Read 456 times)

1. China GDP jumps to 8 per cent growth and the Shanghai share index doubles to more than 5,000
2. Federal Reserve follows Bank of Japan and locks in 1.5 per cent 10-year bond rates
3. A quarter of high-yield corporate debt defaults as interest rates surge globally
4. Brexit never happens as EU concessions convince the UK Government to Bremain
5. Copper prices plunge back to their 2009 financial crisis low of $US1.25 per pound
6. Bitcoin triples in value to above $US2,000 as cryptocurrencies become a US dollar alternative
7. US healthcare reform to cut spending sends health stocks plunging 50 per cent
8. Mexican peso bounces back after traders realise Trump is not so bad for trade
9. Italian banks the world's best performing shares as Deutsche Bank woes trigger EU bank bailout
10. EU stimulates growth by issuing multi-national bonds to fund Keynesian stimulus program

As it does every year, Saxo Bank's analysts have nominated their top ten "outrageous predictions", which highlight some of the unlikely events that might play out on markets this year.

"This is a deck of black swans," Saxo's global macro strategist Kay Van-Petersen told me, while out in Australia late last year. "The idea is none of these are supposed to be real forecasts, even though, as an example, last year we did have two that did play out."

Indeed, Mr Van-Petersen's own personal outrageous prediction - that Bitcoin could triple in value over 2017 - is off to a good start. When I spoke to him during his Australian visit in mid-December, one Bitcoin was hovering between $US700-800. By January 5, a Bitcoin had jumped to $US1,136, before plunging back to just under $US900 by January 9. Mr Van-Petersen's prediction for surging crypto currency values rests on the adoption of them by one or more nation states - potentially financially or politically troubled nations such as Zimbabwe or Syria - as a form of official tender. Such a move would add some legitimacy to crypto currencies at a time when people are searching for alternatives, as illustrated by the popularity of Bitcoin in China at the moment through a combination of speculation and as a means to escape Government capital controls.

"The combination of a much stronger US dollar, geopolitical tensions and dislocations, people being tired of being wedded to the US dollar - which implicitly means you're wedded to US monetary policy as well as US political policy," Mr Van-Petersen explained as the other factors behind his Bitcoin prediction.