Undeterred as some of last year’s “outrageous” predictions failed to fully materialise, Denmark’s Saxo Bank has come up with another list of bold claims for the next 12 months, starting with the view that the US Congress will vote down any further reflationary moves by the Federal Reserve.

The bank’s “outrageous predictions” have become an annual event, where Saxo Bank – perhaps in contrast to some of its rivals – makes a no-holds-barred attempt at guessing big economic and political out-turns for the year ahead.

At the top of the list is its expectation that lawmakers in Congress, with the House of Representatives in Republican hands since November, will block further attempts by the Fed at quantitative easing.

“In the second half of 2011, the Fed is in the hot seat for having been the critical enabler of the US housing debacle and resulting bank bailout and public debt catastrophe. Meanwhile, the too-big-to-fail banks are back in deep trouble again. Congress blocks the Fed’s authority to expand its balance sheet, and sets up an eventual challenge of the Fed’s dual employment/inflation mandate,” Saxo Bank said.

Here are its other predictions:

Apple buys Facebook;

The US Dollar Index tops 100;

The US 30-year Treasury yield falls to 3 per cent;

The Australian dollar falls 25 per cent against sterling;

Crude oil surges over $100 per barrel before later retreating by more than one third;

Natural gas prices surge by a half;

Gold rises to $1,800 per ounce as currency wars escalate;

The S&P 500 reaches a record high; and

Russia’s RTS Index reaches 2500.

Explaining its prediction about Facebook, Saxo Bank said: “In interviews, Apple’s Steve Jobs has explained that Apple spoke with Facebook about partnership opportunities, but that the talks ultimately produced nothing. Facebook was after 'onerous terms that we could not agree to,' according to the executive. This could trigger Jobs to buy Facebook outright.”

On the dollar index, it said: “The economic growth trajectory in most areas of the world appears healthy for a time in 2011 but then trouble crops up in China. With the Chinese industrial base growing slowly this puts global risk appetite in a tail spin, and with the Japanese economy struggling and the eurozone in disarray, the US dollar starts to look more appealing. The unwinding of these positions pushes the USD index 25 per cent higher to over 100 by late in the third quarter of 2011.”

And on the US 30-year T-bond prediction, Saxo Bank said: “The dollar devaluation policy, with its roots in the ‘currency wars’ of 2010, force emerging markets to use more of their spare dollars on Treasuries. The Federal Reserve’s quantitative easing exploits fail apart from easing the balance sheet woes of American banks. The ECB, EU and IMF fail to cure the ills of the peripheral PIIGS pushing the flock of flustered investors to the safe haven of Uncle Sam. The feel-good factor vanishes in 2011 and the 30-year Treasury yield drops to 3 per cent.”

A year ago, Saxo Bank predicted that gold would fall to $870 per ounce in 2010, but in fact the yellow metal has hit a record above $1,400 before easing slightly since; it also predicted a sharp fall in the Chinese currency and a fall in the VIX index of US equity volatility to 14. The VIX rises when investors grow more anxious about stocks. At present, the VIX is around 16.

In politics, Saxo Bank last year said the traditional dominance of the Republicans and Democrats was going to be challenged by the emergence of a third political party. Arguably, the rise of the Tea Party movement in the US, which champions limited government, low taxes and spending cuts, has vindicated Saxo Bank’s prediction.