For the full list of Saxo's 2019 Outrageous Predictions, click here.
The world suffers another year of wild weather with Europe again experiencing an
extremely hot summer, setting off panic alarms in capitals around the world. With the
international aviation and shipping industries enjoying substantial tax privileges, they
become the targets of a new Global Transportation Tax (GTT) that introduces a global
ticket tax on aviation and a capital “tonnage” tax on shipping with the price linked to
carbon emission footprints.
The new tax charge is set to $50/ton of CO2 emissions which is twice previous
proposed levels and significantly above the 2018 average of €15/ ton under the
European Union’s Emissions Trading System. The new GTT pushes up air travel ticket
prices and maritime freight, increasing the general price level as the new tax is passed
on to consumers.
In October 2016, the International Civil Aviation Organization agreed on a resolution
for a global market-based measure to address carbon emissions from aviation.
In April 2018, the International Maritime Organization announced a target to cut
maritime carbon emissions by 50% by 2050. With alarm bells going off everywhere
over climate change, politicians enforce GTT in a drastic move that bypasses voluntary
carbon trading schemes and industry initiatives in order to move more quickly.
The US and China have previously contested fuel taxes on aviation, citing the 1944
Chicago Convention on International Civil Aviation, but China changes its stance as a
natural progression of its fight against pollution. This forces the US to reluctantly join
forces in a global transportation tax on aviation and shipping.
Stocks in the tourism, airline and shipping industries plunge on increased uncertainty
and lower growth.
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.