Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Marin Talks Money, the podcast so much people who know the markets explain the markets. I'm Maren Sums at Web. This week, I'm speaking with John Hardy, chief macro strategist at Saxo Bank. Every year for at least the last two decades, Saxo Bank is released their annual Outrageous Predictions list, and today's guest, John Hardy, has been involved in those predictions since the list began? Is that right, John?
Since the last began the year after the list began.
I believe he began. Okay, cool enough, You've got big shoes to fill here, because we normally talk Justine Jacobson about this and he has now retired. I believe, yes, we'll trying to get seen on another time for it for a retirement debrief. Right for now, you're the guy you're gonna have to fill his shoes. Thanks so much for joining us today.
I'll do my best. Thank you. I'm glad to be here.
I'm feeling going to do pretty well. I have a list of these outrageous predictions in front of me, and we're not going to talk about all of them. Because listeners can go to your website right and have a look at them, the ones we don't talk about today. Sure, yeah, if you want to hear more about this, listeners, go look at the website and you can see the ones we don't talk about today. But we're going to get through quite a lot of them because they are relatively outrageous.
So the first one, and I'm not going to do them in chronological order, but the first one is Trump two point zero blows up the US dollar. What's going to happen?
Well, again, these are outrageous predictions. They're not our forecasts for the future. This is not our sort of baseline outlook for what's happen for are.
You taking any further? If any of these things happen, you're going to call them forecast, not outrageous predictions, aren't you? If this actually happens next time we talk about it, you're going to say as a forecast.
Well, no, I don't think so, because they've rarely come true, but occasionally they do. And that's the idea here, is to take some very serious issues that we see in the background, whether it's too political or financial markets otherwise, and say there's a pressing things going on. Maybe there's a lot of consensus in this case that Trump two point zero actually should mean a strong dollar. And what
we're saying is maybe we have this wrong. There are ways that we could actually see this resulting in a much weaker dollar, I mean blows up, meaning of course it goes down, not that it goes up or in flights that it goes down the US dollar.
Okay, so what's the mechanism.
Yeah, well, the mechanism could be from just about any direction. But one of those is the sort of post Plaza Accord reality that we have economies now needing to act more in their self interest, a multipolar world. No longer the sort of global landscape of the US hegemony rules all into one global reserve currency to rule them all. But we have multiple currencies and multiple regions acting more
in their self interest. And this has really been brought about from the US side because the global reserve dollars, the global reserve currency, is just not working for the US economy anymore, and so we have a much more self interested US and nationalist economics if you want to call it. The threat of terror US et cetera, and almost a weaponization and really it is a weaponization of the US dollar for those that don't want to play ball.
And therefore, major trading partners, major powers in the world outside of the US will be seeking alternatives, and there they already are to a degree, but this will be something that could really pick up pace in twenty twenty five.
And this has been discussed for so long that there's going to be an alternative to the US dollars that everyone's had it with always having to trade in dollars, and they're going to start trading in various different currencies. The bricks are going to create their own joint trading block exactly. These things have been this conversation has been around for ages. But there is the idea here there's a possibility that it is Trump's tariffs that could actually make it happen.
Yeah, and it's kind of interesting. You see almost some foreshadowing of this when you have Trump saying, well, if the bricks current, if the bricks countries are going to seek to, you know, trade outside of the US dollar, We're going to slap one hundred percent tariffs on all of them. Well, it almost becomes a self fulfilling conclusion. If that is going to be the future of trade relationlationships. This kind of tit for tat a measure, So it's not a trivial thing to do to create a new currency.
And of course the dollars days are not done, but it's a matter of degrees and a matter of perhaps rolling over and something new starting, rather than that this is something that's going to happen overnight. So I don't want to give the impression, even as an outrageous prediction, that we're talking about some kind of sudden end to the US dollar. It's about new potential currencies and ways to trade coming about.
Yeah. But then there's a fascinating little bit in the middle of the summary of this where it says, while slashing deficits with the help of an Elon Musk run Department of Government Efficiency Efficiency or DOGE, and that implication that really is possible.
Well, it's possible, certainly possible in theory. There's plenty of government bloat that could be attacked. But of course there are also political constituents that would not be happy to see their funding pulled. And I don't think we even necessarily need to see that to get a weeker dollar.
But we have to remember that fiscal a weak fiscal impulse is also very negative for a US dollar, even if we don't go the route of the dollar weakening, because they inflate further deficits and the FED has to do some sort of new QE or something to keep the US treasury market from seizing up. If we have the dose suddenly coming in in a big way and cutting spending, that's also quite negative for the US dollar, also a negative for US growth.
Yeah, I'm partly to do with this falling supply of US dollars. Yes, yes, Okay, Now let's go onto the potential market impact. Actually, I'm going to say it sounds pretty good. The crypto market quadruples to more than ten trillion dollars, and I think probably by crypto we're really talking about bitcoin, or are we talking about all types of crypto.
It was just the crypto market in general. We don't like to talk specifics and we talk crypto. It's just not an area we like to make a big profile, cut a big profile in the market. So it's just a general idea that one of these alternatives could be the crypto space. And read that as you will.
Interesting, you'll definitely get hate mail because almost everybody else who comes on this podcast likes to divide crypto into bitcoin, which is real, and crypto, which they considered to be less real. I'll set up for your hate mail director. So manages the USO oft falls twenty percent again major currencies, and thirty percent versus gold. The US economy continues to reflate, but wages keep up with goods inflation as production resources reshore to the US US exporters advantage. I mean it
sounds great. Yeah, it sounds great for the US.
It does sound good for the US, except there will be inflation. I think the key for this to be something that the US can can pull off, and there's so many ifs involved here would be potentially sort of selective inflation. I mean, the US is very well supplied in terms of energy from its own resources, from food.
So if they're able to keep those key categories down, cost of living categories down in reasonable inflation levels relative to wages in particular, and people don't feel like they're getting poor from paycheck to paycheck, I think the US public could potentially not be too upset if some consumer goods, namely those produced in China and elsewhere are suddenly seeing much higher rates of inflation than those other costs of living related goods.
Yeah, well, people don't mind inflation as long as their real income remains the same arises, right.
Oh, real income in what category? Is the sort of the nuance I'm trying to introduce there?
But yes, in general, yes, okay, Well we touched on energy, so let's go straight on to another outrage of prediction. Electrification boom ends Opek. Now it's about electrical vehicles. As electrical vehicles become more affordable, could oil rich Opek become irrelevant in twenty twenty five and find itself on the
ash heap of history. Now this comes at a time when all of our newspapers are full of stories about how nobody wants to in EV and the manufacturers can't sell enough evs, and they'll all just worry about whether we can really phase out petrol and diesel cars, and whether it's really possible for the government to continue to find manufacturers for not selling enough evs, etc. So the general mood at the moment suddenly in the UK is really really anti EV.
In the UK. Yes, and the UK you also have a terrible infrastructure for charging evs, and that is the key challenge. I think the evs themselves have gotten to incredible levels of range, and the efficiency of an EV is quite remarkable because it's so much better an energy source to use electricity rather than fossil fuels, because you're getting so much waste heat with fossil fuels relative to the efficiency to the kinetic needs to turn wheels with
an electric motor. So for those countries where they build out the infrastructure, the transition can be quicker if you look at a Norway, et cetera. But I think the key point here is one of rate of change, and one of the biggest markets is China, where already they are going beyond fifty percent evs. Now, in terms of the new passenger vehicle mix, at some point the Tesla, Semi or other companies would be making for hauling for hauling goods, so transport vehicles as well as passenger vehicles.
And we're just talking about at some point, possibly within a year, possibly two or three. We're at peak oil in terms of the demand side, Now that there's some kind of absolute geological limit that we've reached, but we're at a demand peak, and what does the exponential decline curve look like? And if your country is reliant on oil exports, do you break ranks, produce more now rather than later, perhaps make a long term supply deal with
somebody else. It's not so much about OPEK really, which is in the text to me, This is more about the thought process around peak oil demand and electrification and what does it mean.
Yeah, I find this one really interesting because it's one of those ones that I think would it would genuinely be one of those things that is very very unexpected, in that I think a lot of people who don't look very carefully at the energy market might think, well, that sounds that sounds entirely reasonable. That could easily happen. That's what I expect to happen. But in fact, of course, we know that even as demand for electricity rises at
the moment, so does the demand for fossil fuels. So we're still thinking rising demand for fossil fuels globally, and eighty percent of energy use globally remains fossil fueled. And even in Scandinavian countries, where I think it is is in Norway, where the majority of new cars sold are now evs but nonetheless more than eighty percent of the cars on the road remain combustion engine cause.
About seventy five percent. But although ninety percent now are are evs of new cars, and it's a very small it's a very small country, but you're right, and you do have to get into not just passenger vehicles but other vehicles. And it does take many years for the replacement to fully happen. But once those evs become more attractive to own and they're easy to charge, perhaps the
replacement accelerates. This of course is this is outrageous, right, but we are need to consider what does this look like in terms of a handful of years when there's a process change and a mentality change for those that are exporting oil, especially when you have a US that has created essentially two Saudi Arabias of oil production, and the first in the shale gas patch and then in the shale oil patch. And it really is important to
differentiate here on talking oil. We know that gas is still growing and this applies will probably grow for at least another decade or if not more. So, it really is the oil side of things that we're talking about. Oil and specifically used for transports that it's biggest current use.
It's interesting, and you could have had another outrage of prediction on a similar vein suggesting that the price of oil is going to collapse because the supply of oil coming out form of the US under Trump two point zero would be so high.
I think that's less likely because a lot of the new production that's been brought online in the US shale, and it's much easier by the nature of US shale many many small fields, many many small sources to turn up and turn down production, versus the large field model where that's not really feasible to so quickly and dynamically
change the production rates. So, you know, without being oil industry expert, I think we do have a very different structure to how the supply and demand, how supply can respond to demand and price relatives to previous regime.
Okay, well lit again, if you get down to read your wit at the bottom. One potential market impact sounds great, absolutely great. Crude ol slums and price, it's a boom for airlines, We'll get to travel more. Luxury travel booms. Right, chemical paint and time manufacture is free to logistics companies, they'll boom too. This sounds amazing. The market balance is out quickly, oil prices cyber to stabilize again. You know that's good. Higher cost suppliers, particularly North America's shut down
expensive shale oil production. People won't complain about that too much, will they? And the only people who end up in a bad way are the Japanese car manufacturers who find themselves in a desperate race to catch up with some other ev plants. Will anybody else suffer badly from this? This is almost entirely good news.
Well, some of the open countries themselves.
The countries of course slightly forgotten about.
That too, reliant on their oil revenues for for their for the national income.
And they're all aware of that, right, All those countries all have been trying to diversify, move into different areas, and we see that across the Middle East for example.
We're just talking about bringing awareness forward to this is happening sort of now, in the few years. It's not just about a thirty year generation forward effort. This is a process that starts more or less now.
Well maybe okay, it's not you know, you're not expecting a chance it might happen. Okay, So we're going to stick with energy. So we've just discussed one outrageous prediction being that oil becomes very cheap, and so one type of energy becomes extremely cheap. And we move along to the next outrageous prediction, and it's the US imposes AI data center tax as power prices run wild. Now, I
thought this one was really interesting because I noted it. Gosh, but eight nine months ago, maybe a bit longer, the EU started discussing taxing AI in order to prevent it using so much energy. Do you remember that?
I do remember that. And you also saw a microcosm here and there with the bitcoin mining the type of energy resources or electricity resources, Yeah, that that requires. So this could be an issue when we're talking about the acceleration and build out of these AI data centers. Now, of course, if you're particularly large, you're going to need to find the agreement to hook up to the grid
somewhere anyway before you can even get started. But at the same time, the AI linked demand is is growing, and you're seeing the likes of a Microsoft wanting to restart an old nuclear reactor in the US three Mile Island to get resources for a data center. There you see the Amazon's Googles Oracles of the World talking nuclear small nuclear, small module reactors with very nuclear power. Super interesting.
But what about between now and you're five six when that thing is done right, you have that five to six years of growth.
And some are saying, well, content Koreans build them very quickly.
I think still think we're talking a few years before something is available in in size to to power these things. And if if the calculation requirements there's one estimate, is it doubles every hundred days, that's a lot of doublings per hont you know, times x num one hundred days.
Where's the energy going to come from? I just find I think it's interesting to think if this demand does grow at that pace, it's going to start that baselet requirement is going to start interacting with peak requirements for households and basic industries, and there will be a compon inflict there and it could mean that we actually and it's to remind people in general, we still live in
a world with physical limits. Maybe we in the days of starship and space we think we don't, but there are some some physical limits that could get a bit more pressing with ent to AI.
Yeah, and you're right here this inspires popular outrageous household see the utility bill skyrocket, aggravated by the huge banks and power prices for electricity consumed at home during peak load periods in the evening. So this is in the US right where we expect they'll get absolutely furious if their utility bills go up. And here we are in the UK, we just sit here watching them go up and up and up and up. We're not out on the streets. What's wrong with us?
There's some specific challenges that were from twenty twenty two that happened in the UK, and plus of the transfer of the energy system here partially reliable and renewable energy and that and that's where's the baseload? These are these issues are plaguing at times when the wind doesn't blow or the sun doesn't shine enough. You don't have the storage out there to power when those when those energy resources are are down or not producing it the capacity you need.
Yeah, okay, so again this could this could be good news. Right, so you write again down to your potential market impact, and here this looks like unmitigated good news. You're such, you're such an optimist.
Not for those that are investing in AI if they're held back from.
The for long. A massive boom in US investment in power infrastructure companies like Floor is that I said, I don't know. Yeah, yeah right, I'm signing massive new construction deals. Tesla is accelerating, MEGAPAC gets increasing attention. Long term US natural gas price is more than double, then we get a bit of inflation.
Yeah. If you look at US natural gas prices specifically, they've been so absurdly cheap for so long because the shale patch in the US has delivered at incredible rates and they've capped the ability to export it. So just a realistic market price for natural gas that's still cheap is double what it is now in the it starts to point out the natural gas pricing around the world is not flat. It's very, very, very differentiated depending on where you live, because it's a difficult product to ship.
Has to be liquefied and that's very energy and cost intensive to do so, and then shipped around the world in these incredibly expensive, very high tech ships.
Yeah. Well, the one very good thing that could come out of this, because we know that the people running AI data centers or setting them up. Except all these
companies have big tech companies. They want huge amounts of money, and if they really want cheap energy fast, they may well push forward what we were just talking about the development of SMRs that can be put up in a hurry and use very I mean, they could really accelerate these and that would be amazing, for example, for the UK, because we could start with all the ridiculous offshore wind and all that expensive stuff and the solo that hardly ever works, and we can just take up SMRs around
cities all around the country. Problem solved.
Yes, let's do it. But let's see how easy and cheap that is. It sounds so easy, but it takes many years and then the designs are still in design phase. There are some designs that are complete, but these things are not available in large quality. Yeah numbers yet.
I get that. But as we often say on this podcast, if anyone can do it, the tech bros can, So if they're under pressure, may happen faster than it might have otherwise. Okay, that's a good one. Before I choose more, you must have a favorite.
Well, we already covered my favorite, which was a Trump two point o blows up the US dollar and the consensus is one way, and you want to be outrageous by saying, well, what about this or what about so if this doesn't turn out the way expect and expecting a strong dollars, having your cake and eating it too, and the other consequences we talked about.
So yeah, all right, okay, let's move on to a video. Then in video, blis to twice the value of Apple. Now here's the thing. It's kind of outrageous to people who look at some market history to think that any stock could keep growing like that and could become so big, etc. But if you look at for example, in the UK, at the top by lists of retail investors, any of the platforms, video is always up there at the top. There's a lot of people out there who are expecting this.
You don't think this is outrageous at all, who think this is exactly what should happen. It's been going up for rages, It's going to go up more. That's just life.
I agree and I disagree. So, of course, one stock market performs or stock performance on a twelve month basis is a very strong performance, indeed, but it did a lot more than that last year, right, So what's so big about one hundred percent, Well, it's talking about sheer magnitude. We're talking about a three and a half trillion dollar it's going to double in size, three to three and
a half trillion dollar of market cap created. That's, you know, for perspective, maybe slightly less than the entire UK stock market is worth almost twice that the DAX forty is worth. So it's we're talking big numbers here in short, and you're talking about a company, as you pointed to, growing at incredible rates, could become the most profitable company within twelve months at least, to within fifteen months or eighteen
months doing that at incredible growth rates. Whereas you've taken Apple's currently the most profitable company ever, it's grown ten twelve percent over the last three years. And that means not yearly, that means in total top line. So it's just for perspective, yes it's a richly valid company, and yes it requires that growth. What are the implications the
other side of it? And this is a small point to this, and I think an important one though, is that if in Vidia, and these are simply based on projected earnings for the company going forward, if it is to earn that much money and you get that much revenue. Who is providing that revenue? This is the other mag seven stocks largely, who are building these gigantic data centers.
So that becomes a headwind to their profitability because they're having to make these huge investments that aren't yet paying off in terms of the end uses of AI. So we have this AI arms race to get these data centers built to find these applications, but those applications aren't aren't yet paying the dividends and therefore just a higher cost structure for these are these you know, formerly and still really very very very profitable companies.
Okay, so then back to the end game for this, The potential market impact and video share is trade well north of two hundred and fifty dollars, And then there is a suggestion that later on the market and the regulatory authority start to look at that and go, WHOA, hang on, that's got to be quite some monopoly, and then you get the scrutiny that might bring it to an.
As well as I think implicitly that these growth rates can only be achieved for so long because the the size becomes so enormous you're talking about sucking up the profits of the entire economy at some point, right when a company has gotten to this magnitude.
Yeah, but then you might get a wonderful moment, because I'm assuming that pretty much all Americans by now in a couple of video shares, you might get a moment when you have an amazing wealth effect from these these share price going quite that high. Great for American consumption, Okay they are with their budget being slashed, their cheap energy, there are are hundreds of thousands of dollars to eat from their stake in video.
Oh they're cheaper dollar as well, so buys less than the world stage. But to put a mention in the document if I can, but yes, there is a wealth of effect. But the wealth effect is less in inequities and something like income paid out from bonds, for example, le go straight into spending when you get your when you get your coupons, whereas the wealth effect is much more muted from your share portfolio going out.
But yes, there is a possible well, okay, and on the other side, what would crash in the video. I mean, to many people, it would be just as outrageous to say in video is going to a bug.
I'm not so sure it's outrageous to say the video is going to fall. It seems like there's a lot of folks that recognize that the incredible ascent of this company, and there are plenty of naysayers, Not so much that it's not a good company here, doesn't have an amazing AI platform, that the Blackwell chip is there's anything amiss with it, but just that these growth rates are just not possible extended too far out into time, and somebody
is right or they are right at some point. The question is always one in investing, in especially trading, of when when are you right? When does the growth curve stop going exponential? When when do they have a bad miss, for example, and suddenly you have to look forward to a no growth next year in chips, or even a ten percent fall versus what you've been used to two hundred percent originally now one hundred percent growth in these sales. You know you're on your basis, etcetera.
Realistically, that's more likely, isn't it?
Eventually? But again, time tim and.
Tim and timing. Okay, all right, China, China. No one's been investing in China for ragies looks a little uninvestable. Your summary here, having created, having created China's most epic debt bubble, China boldly prints and prints and prints and prints and prints to try and make it all. Okay, I'm summarizing.
That's kind of a fair assessment of the of the outrageous prediction. But I think our point here is one it's not so much about the magnitude. Yes, if they printed fifty trillion un in a reflationary move, this would be larger than anything they've done before. That's about seven
trillion US dollars. By the way, for perspective, it's more about China needs to move away from its from its economic model that was based purely on fixed asset investment and especially the real estate bubble and debacle and dealing with all the debt that is linked to that, so that they need to power through this balance sheet recession which has echoes of in Japan's experience starting in the
late eighties. And it's about fiscal It's about getting money into consumer's hand and rebalancing the economy more towards consumption. Could they start to look at producing or creating a better social safety net. They have a long term demographic crisis that needs to be addressed. A social safety net might go a long way to having more people feel comfortable about starting families. It's getting married, et cetera. These are long term social issues that China may look at.
It's kind of linking to a change of behavior and something a new China relative to just the size true size of the stimulus.
And again this is something that's been discussed for ye yeah, very long. How can China do this? How can they move towards a more consumption orientated economy, how can they make people spend them? There's one rather lovely idea in this, a proper kind of people's people's q E, whereby you use a digital currency to put money directly into people' accounts.
And they have the technology to do that, and they've experimented with it, but they're most likely being held back by my concerns about inflation, and so there has to be of course some balance and the size of the and most relative to the type of inflation it would cause and risks from them.
And if you have the technology to do that, to put money directly into people's pockets via or digital currency, presumably you also have the pad to take it right out again under for example, a social credit system or anything like that.
Or yeah, or to turn it off. You started and then you turn it off if if it's uh, you know, causing problems. And we saw this, I mean the curate. The clever thing about the digital approach is you know exactly who's who's going to. Was in the case of the pandemic response, it was just showering endless amounts everywhere because you didn't know exactly how what the transmission or how good the transmission would be, and there was a lot of fraud involved in the US case and the
trail of course, a big brother et cetera. Your concerns about that, But at least you know more precisely who it is going to and then the transmission mechanism.
Okay, and the market impact here that would be good.
Right, well, it should be good. It should be good for global growth, for global nominal growth. It should also mean higher global inflation. China would be competing for goods relative to the rest of the world. Yeah, there's a but more just a transformation of China's economic model has huge consequences and becomes a big end market for consumption which we saw at times for key companies, the German auto manufacturers for example, other companies as well, they were
selling into China. Some of those are now pulling out. But can this process be stopped and turned around? I don't know, but somebody would need to satisfy that demand obviously if if it was created.
So now we have this sort of rather marvelous situation whereby manufacturing is reshored to America, the Americans make up out of stuff'll sell it back to the Chinese.
There you go, Let's see if you can. Let's see if it can.
Happen exactly exactly what President Trump wants.
Exactly what he wants. But will he get it or are we headed for towards more some kind of disentangable disengagement divorce of of chi America as some call it. It's a huge existential question for how how the global economy works in coming years, and we try to kind of touch on that in this publication with a couple of these predictions.
Okay, I want to cover one last one, which is my favorite, about your favorite? This is my favorite. I hovered here between the artificial heart and and and the pound, but I've settled on the pound.
Okay, okay.
As Europe's economy struggles, fresh fiscal policy winds are blowing in the UK, driving sterling dactor levels versus the Euro not seen since before Brexit. The UK outlook is as constructive as ever in the post Brexit era. That sounds like a very sort of down with faint praise.
I didn't want to be too effusive in my praise that there are you have this new budget, for example, from from the Labor government sort of takes takes things in the right direction, right and inverted commace because it's focusing a bit less on things like subsidizing consumption, so
things like the winter fuel. We could talk about inequality and issues with folks to having the ability to pay for their heating bills, but it's not productive and it pure economic sense relative to encouraging investment in particular and then raising the incomes of public sector workers. So that keeps the nominal economy humming along to a degree, which
will help on the revenue side down the road. It also helps on the Bank of England not having to or being able to cut rates as much, so it just keeps the UK economy humming along.
It was a terrible budget for business. I don't know to interrupt your optimism there, but you know you can't.
Talk business optimism.
I'm trying to, you know, desperately trying to find a way to cut costs and cutting staff. And there's a horrible realization that maybe enough modeling wasn't done on cutting the threshold for employers and I that may have very very unpleasant consequences. So I'm going to go with you on the optimism.
But an equal degree to an equal degree on this prediction was the negativity around Europe, and we see that right now and then the headlines constantly. And when we wrote these predictions, we didn't know that Germany's government was going to fail. That happened shortly afterward, and we are
going to have new actions in February. And we do see the opposition making very different noises on fiscal in a very cautious German kind of way, talking about ways that they can look to avoid the imposition of the debt break or schuldin bompsen to stop the ability to expand fiscal which is desperately needed in Germany, which has had its model, its economic model disrupted by the end of cheap Russian energy inputs and now China become a
global competitor for some of its key traditional exports. So that in there's France where we can see the political dysfunction there, the Barnier austerity, the terrible budget that would have really just killed the French economy. What looks like it will be avoided because Lipen wants to take down that government. But some big problems in questions at the heart of Europe, right, equally dragging on the Europe as much as we're sort of lukewarm slightly positive on the pound.
And it's also again it's this sort of you know, pushing back a little bit with the outrageous prediction against the quote unquote common knowledge that breaks it as only a disaster and was only going to ever be negative for the post.
I don't hear that here, right, And the result here encouraging domestic investment and a more robust growth outlook supports seiling vessels, the flailing euro seeing the euro steling rate fall as low as zero point seventy five, below the rate of the day before the Brexit vote. As a result, the UK foot seat one hundred posts a strong performance. So that's great. Here we've got we've got a stronger economy than Europe. Who can argue with that? A rising
stock market, a strong pound. We're all going on holiday, aren't we.
That sounds great?
It does sound great of all of these. Of all of these, I know you've got your favorite, the US dollar. But if you and I know they're all supposed to be outrageous, which do you think is most likely if you had to hang your hat on one of them for next year?
I still I would actually still go with my favorite, which is, yes, Trump blows up the US dollar.
Okay, but it's still it's still not the most likely scenarios. So what do you think will actually happen next year?
I think we could see a stronger dollar for a while. The list of factors that could drive the dollar weaker are slower to come in then than would be in the timeline of the twenty twenty five prediction, and that the dollar actually stays volatile but relatively strong. It would be a forecast that I would if I was asked to pen my forecast, that would be it for the
coming year. But it will depend on so many things that and I think the cone of uncertainty is particularly wide because you have a Trump two point zero, you have forceful policy measures relative too, if you did not have Trump two point oh coming into office with both Houses of Congress, if very narrowly so in the case
of the House. And the uncertainties around how China responds, how you respond, what's going to happen in Ukraine, Russia or all these all these factors, they are a heck a lot of uncertainties in this world as we head into twenty twenty five. So I almost can't imagine anything, but it becomes an out rather outrageous year probably in many ways that are absolutely not at all on our map and in our set of predictions.
Are you cooking up on go? And bitcoin?
Gold is just a nice to have a portion of your portfolio for retention of value. It's not a it's not a speculative asset that one should expect to go up by leaps and bounds. If you're expecting oil, sorry oil gold to go up by leaps and bounds, I really don't want to see what's to happening to the world at that point in time. And when I say leaps and bounds, I'm talking about multiples. Yes, then you're talking about some kind of hyperinflationary scenario which is really
sort of beyond the pale. Even with outragious, I would say to expect that.
Yeah, and bitcoin slightly feels that in video is going to the moon. Social Bitcoin.
We don't really do forecasts on bitcoin. We try to keep it very generic in that space just as a as a rule.
You really don't want to hate mail, do you. I'll leave it to you to thank you. John, Thank you so much for joining us day in our London studio, but appreciate it.
It's been my pleasure. Thanks so much.
Thanks for listening to this week's Mare and Dogs Money. If you like our show, rate review and subscribe wherever you listen to your podcasts and keep sending questions or comments to Merin Money at Bloomberg dot net. You can also follow me and John on Twitter or x. I'm at marinas w and John is John Underscorestepic. This episode was hosted by Me Marenzumset Web was produced by Summersadi, production and support by Moses and special thanks to John Hardi.
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