Saxo Bank: 10 the most shocking forecasts for 2019.

As every year, the Danish bank has prepared for us ten extremely awe-inspiring forecasts that, although they seem absurd, still have a chance to be implemented.

Steen Jakobsen, chief economist Saxo Bank:

We've been publishing "shocking forecasts" for over a decade and this year's list is both fascinating and surprising, encouraging investors to move beyond the market consensus. They should not be treated as official Saxo market forecasts - they are rather market events and movements with the potential to upset generally accepted assumptions and views.

What can happen to us in the 2019 year? We strongly encourage you to this exciting and stimulating reading imagination! 🙂

1. The EU is announcing a debt jubilee

source: Saxo Bank

In 2019, the unmanageable levels of public debt, the populist revolt, rising interest rates due to weaker liquidity and reduced asset purchases by the European Central Bank, and the slow pace of economic growth lead to renewed debate in Europe on solutions to a new crisis. The situation in Italy negatively affects European banks as the EU enters the period of recession. The ECB seeks to minimize losses using the new TLTRO guidelines and series (Targeted Long-term Refinancing Operations).

This is not enough, however, and when the crisis hits France, policymakers understand that the EU is on a precipice. Germany and the rest of the "core of Europe" countries, preventing the collapse of the eurozone, have no choice but to support monetization. Economic and Monetary Union extends debt monetization powers to the ECB for more than 50% of the debt. Of GDP and provides a guarantee for the repayment of the remainder through the Eurobond program, adjusting the controversial goals of the Stability and Growth Pact. Members of the economic and monetary union adopt a new fiscal rule allowing in 2020 the mutualisation of the first 3 percent. GDP in deficits, and all of this is subject to periodic verification by the European Commission in terms of the state of the EU economy.

2. Apple "secures financing" for the purchase of Tesla at $ 520. per share

source: Saxo Bank

Apple is aware that if it wants to increase the impact on the lives of its users, the next limit to cross are cars, due to their progressing digitization. Ultimately, Steve Jobs proved that company plans should be broad and ambitious so that the company does not rest on its laurels and falls into oblivion. Because Tesla it needs more powerful financial strength, and Apple is extending its ecosystem to the automotive sector than just through the recently introduced CarPlay software, Apple is reaching for Tesla. Secures financing for the purchase with a bonus at the 40 level percent at a price of $ 520. per share. Thus, Apple takes over the company for a price of $ 100. per share higher than suggested by Elon Musk's misleading tweet about "securing funding".

3. Trump declares to Powell "I'm firing you"

source: Saxo Bank

At the meeting of the Federal Open Market Committee in December 2018, Federal Reserve Chairman Jerome Powell pushes a rate hike with a small majority - One too many, and the US economy and stocks plummet in Q2019 XNUMX. With a serious crisis on the stock markets and the inversion of the US yield curve, before summer comes, an angry President Trump removes Powell from office and appoints Minnesota's president, Neel Kashkari, in his place.

The ambitious Kashkari is the most consistent dovish at the Fed and a critic of the tightening of US monetary policy. He is less resisting the Fed's government policy, quickly gaining the nickname "Great Assistant," and paving the way for Trump's re-election in 2020.

It announces the opening of a $ 5 trillion credit line. to purchase new zero-coupon perpetual bonds of Treasury Secretary Mnukhin to finance Trump's "beautiful" infrastructure investments and force nominal GDP to return to the path it left after the great financial crisis. Inflation reaches 6%. (reported at 3%), and the Fed rate remains at 1%. This type of deleveraging - through financial repression to the detriment of savers - is not hard to believe.