Union Bancaire Privée: Outlook 2012 - Beyond Black Swans

Geneva, Switzerland (ots) - 2011 was the year of black swans -
those highly improbable occurrences that turn the world economy on
its head. So what black swans could be in store for 2012? Central
banks losing control over inflation, as a result of their policy of
monetising sovereign debt to excess; or perhaps European growth in
excess of 1.2%, a positive scenario that no economist is forecasting
on today.

The end of a cycle

According to the macroeconomic analysis of Patrice Gautry, UBP's
Chief Economist, we are now at the end of a cycle. The West's growth
rate has kept one step ahead of the spiral of debt that was fuelling
it, but now we have reached the end of that road: household and
national debt simply has to be reduced. As testified by the frantic
talks among leaders, the mounting political and economic threats
unequivocally call for higher savings and a rebalancing of growth -
which means more investment, less consumption and lower trade
imbalances.

The two greatest challenges for states and central banks in years
to come will be, firstly, to implement austerity policies that are
able to reassure the markets without plunging their economies into a
deep recession, and secondly, but just as importantly, to reduce the
debt burden by creating a little inflation, but without allowing
prices to spiral out of control.

Gold, the ultimate store of value

Chief Investment Officer Alan Mudie argues that the traditional
idea of portfolio management - based on the premise that riskless
assets exist - has become obsolete. UBP has therefore opted for a
pragmatic implementation of its convictions, ignoring the models of
the past.

Government bonds can no longer be considered risk-free; this is
why UBP continues to favour high-quality corporate bonds, except
those of the financial sector. For investors who focus on returns,
high- yield bonds offer attractive returns, even in this slow-growth
climate, because of the current strength of companies' balance
sheets.

For several years UBP has been expanding its expertise in gold, a
key asset to invest in today, and where our strategy has proved
beneficial to clients. Alan Mudie points out that gold is the only
asset that can get us through this crisis and that it is the ultimate
shield from the risk of monetary chaos and the depreciation of
currencies. He concludes that right now UBP is much more focused on
return of capital than return on capital.

Note to editors

UBP is one of Switzerland's leading private banks and one of the
best-capitalised, with a Tier 1 ratio of 20%. Its core activity is
asset management for both private and institutional clients. UBP is
based in Geneva, has offices in some 20 locations worldwide employing
around 1,200 staff and has some CHF 60 billion in assets under
management.

Contact:
Jerome Koechlin
Head of Corporate Communications
Tel.: +41/58/819'26'40
E-Mail: jko@ubp.ch
Internet: www.ubp.com