Jim Walker, Chief Economist at Aletheia Capital, known for predicting the 2008 financial crisis, has shared four key global forecasts for 2025: a 10% decline in the U.S. dollar value, an economic slowdown that will be difficult but manageable, optimistic long-term outlook for copper, and strong advocacy for increased investment in Indian equities.
During his ETNow interview, Walker addressed worries about a potential 2008-like global economic collapse. “It will be a pretty painful slowdown, but we can go to the other end of it without the kind of government and central bank action that took place in 2008, 2009,” he stated. He noted that whilst U.S. stock markets show instability, the primary concern stems from economic fundamentals rather than banking system risks.
According to Walker, the U.S. dollar is expected to decline substantially—at least 10%—alongside the American economic slowdown. He indicated that historically, a declining U.S. economy consistently results in a weaker dollar, which could prove advantageous for emerging markets, particularly in Asia.
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Walker noted that should the US economy experience a downturn as anticipated, the US dollar will likely depreciate in value. Historical patterns demonstrate that the dollar consistently weakens during periods of declining US economic performance, he said.
Whilst this scenario might adversely affect US equity markets, it could prove advantageous for Asian economies and emerging markets broadly. Such a development would provide relief to organisations with foreign debt obligations, he added.
Time to invest in Indian stock markets?
Walker made a strong recommendation for Indian stock markets, urging investors to significantly increase their exposure despite valuation concerns. He expressed confidence that economic expansion would justify current market prices through improved corporate performance, citing India’s consistent economic policies and market liberalisation initiatives.
“India looks better to me now than at any time in the last 30 years in terms of policy stability and certainty,” Walker remarked, acknowledging the nation’s robust economic framework and progressive deregulation.
Regarding commodities, Walker retained his positive stance on copper, viewing it as a long-term structural investment. He noted that copper demand, driven by green energy initiatives including renewable power, electric vehicles and carbon reduction targets, would exceed available supply.
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Walker expressed optimism about gold’s prospects, albeit for distinct reasons. “Bad behaviour has its consequences, and people start to lose faith, especially in the currencies that central banks and governments are printing,” he stated, emphasising gold’s enduring value amidst growing fiscal deficits and sovereign debt.
According to Walker, the copper prediction was projected for a decade-long timeframe, rather than a short-term one to two years. Whilst gold could have been assessed on a shorter timeline of one to two years, the copper forecast was specifically linked to environmental sustainability initiatives, including carbon neutrality goals, renewable energy adoption and electric vehicle production. These sectors require substantial copper resources, yet the availability of copper remains limited, he said.
