Dear All,
Happy New Year. Here they are again - my outrageous predictions. For 2026.
1. The US invades Greenland, which is 3.5x the size of France and has a population of 57k people. The Danes, who run the territory (public administration, education, healthcare system), respond in best hygge style: peaceful non-cooperation. After several weeks of not being able to get a decent coffee for two days in a row, the morale of the US military collapses. A new Greenland treaty between the USA and Denmark is negotiated and political tensions are settled: Greenland remains part of Denmark, the US can operate any number of military bases and explore the natural resources in the territory, the capital city is renamed Trump Nuuk. For difficult problems, easy solutions: make Trump vain again.
2. After capturing Maduro on the 3rd of January, the USA
forces pro-US regime change in Venezuela. Different geographies, different
motives, same approach: the USA also intervenes militarily in Mexico and Iran.
Iran’s regime falls. A US-brokered peace deal is reached in Ukraine. Trump is
awarded the Nobel Peace Prize.
3. Kevin Hasset is appointed Fed Chairman. Despite strong
GDP growth and sticky inflation around 3%, the Fed cuts interest rates four
times in 2026. The bond market reacts accordingly: the 10-year US treasury
yield hits 5% by year-end.
4. Nvidia’s shares fall 50% from their peak. The seven
magnificent lose, on average, 35% of their market cap peak-to-through. Alphabet
TPUs instead of Nvidia GPUs? Technological disruption? Overinvestment in AI
infrastructure’s day of reckoning? No. Simply long-term interest rates are
financial market’s true gravitational force. And yes - simplicity is the
highest form of sophistication.
5. Worsened terms-of-trade, tight fiscal and monetary
policy (following a primary deficit reduction of 2% of GDP and the most
aggressive increase in interest rates in decades) - this is what happened to
Germany in the period 2020-2023. Given the context, and contrary to mainstream
opinion, it was not a signal of weakness that economic growth was flat in
2023-2025. On the contrary, it is a signal of strong economic resilience that
Germany didn’t undergo a deep recession. With all the above-mentioned restrictive
growth factors reversed and a magnificent public spending bazooka in full swing
in 2026, Germany will turn into Europe’s growth engine. This year, GDP growth
will reach 3%.
6. European natural gas prices - Dutch TTF Hub 1 Day
Forward - fall to pre-Ukraine war levels: Eur 25 per MWh. Global LNG’s ever
rising supply is a beautiful thing.
7. In 2026, electric vehicles - BEVs and Plug-in Hybrids
(PHEVs) – will account for more than 40% of new car registrations in Germany.
Who said that Germans are combustion engine addicts with no passion for the
electrification of transportation?
8. The not so right trio. After Argentina and Chile,
Brazil doesn’t turn right. Leftwing icon Lula is re-elected President in the
country’s October elections.
9. At the end of 2026, LLM”s will be so yesterday. AI
systems that fully integrate language, sound and image will become the new gold
standard. Alphabet’s Gemini overtakes ChatGPT across the board. Vibe coding
becomes the new normal of coding. AGI will look incredibly close to happen.
Then again, it will not be so. By the end of the year, AI systems will be
spectacularly better than today at providing the right answers - but still
completely unable to ask the relevant questions.
10. The European population is aging fast. To solve the
problem of unsustainable social security systems, governments typically first
try to rise the fertility rate, then female’s labour force participation rate
and finally to increase emigration. When emigration rises fast and reaches
15%-20% of the population, populist anti-emigration parties tend to obtain
20%-25% of the vote in national elections. To avoid a total fragmentation of
the political system mainstream, centrist parties implement the ultimate sustainable
solution: link retirement age to life expectancy and raise the former. Denmark
raised the retirement age to 70 years in 2025. In 2026 other EU countries will
follow the Danish example. And no - France will not lower the retirement age.
Lifelong learning. Lifelong stimulating work. Why not?
11. Spanish-British actress Judith Fernández is clever,
witty, talented, beautiful. She wins the Oscar for best actress in 2026. A star
is born.
12. Summer time, football time. The world cup 2026 takes
place in the USA, Mexico and Canada between the 11th of June and 19th of July.
A European team wins the competition. More details to follow in early June.
13. I will send you my outrageous predictions for 2027
around the 15th of January 2027. Tradition. Consistency. The remarkable
elegance of being punctually late - what is there not to like?
Enjoy every minute in 2026! It will be extraordinary. Fantastic. Spectacular. And with humanity (still) ahead of AI.
