Last year, Hungary was surprised by leaving the EU. What are the surprising predictions for 2021?

Analysts at Saxo Bank already have a long history of predicting so-called “black swans,” which are economic or market events few expect at the moment, but banking experts underestimate their risk. This is because if they arrive despite the low probability, they can have a significant impact. With these forecasts, it would be a shame to be held accountable later, as Saxo Bank also admits that their chances are slim, meaning they are not part of their baseline scenario.

Despite all this, the staggering 2020 forecasts have just come true for Hungary this year. Last December, Steen Jakobsen, the bank’s chief economist, predicted that Hungary’s process of exiting the EU could start this year. That would be a longer event, of course, but I was hoping the country would take the first steps this year. And the expected veto of the EU budget negotiation can be interpreted remotely, even if the process has not started, but the chances of our withdrawal have increased. Jakobsen expected that, in part due to the weakening of the forint against the euro from 330 to 375 at the end of last year, this was finally due to the corona virus, as the spike in the exchange rate was close to 370.

Saxo Bank released their staggering forecasts for 2021 on Tuesday, let’s see what they are:

Amazon “buys” Cyprus

Tech giants have long been under attack for having too much power and paying too little taxes, and these attacks are expected to continue into 2021 as well. In response, Amazon may decide to relocate its European headquarters to Cyprus, and this too must be welcomed by the island nation, as the taxes paid by the American giant could help reduce its debt to close to 100% of GDP. Of course, the EU would not be happy with this, it is expected to launch an investigation against the company on the one hand, and to demand even more from the Member States to unify their tax policies on the other.

Germany saves France

According to Saxo Bank, debt will be a serious problem in France in the coming years, approaching 100% of GDP before the epidemic, and private sector debt has risen sharply to 140% of GDP, which is higher than for example , the Italian rate is 106%. Government responses to the epidemic will further increase public debt, which could reach 120% of GDP in 2021. Despite significant government measures, France will not be able to avoid massive corporate bankruptcies, particularly in the service sector, and this too It could worry investors, who could reduce their positions in the country’s main banks with diminishing returns. And in this situation, due to the increase in debt, the State will not be able to help the banking sector either, so it will have no choice but to hand over its destination to Germany, so that practically the ECB prints enough euros to save the banking system.

Blockchain technology ends fake news

According to Saxo Bank, in 2021, fake news may reach a level where traditional media companies already have to respond. And this coordinated response could be based on blockchain technology, which will allow news content to be shared in a way that makes its reality content and source trustworthy. Because of this, companies like Twitter or Facebook can invest a significant amount of money in blockchain solutions, making sites that publish alternative news or fake news unavailable sooner or later.

China’s new digital money is reversing the direction of capital movements

In China, the revolution in digital payment solutions is expected to continue, with the central bank working harder to create a cashless society. And it could also mean that foreigners would have unrestricted access to Chinese capital markets, breaking the biggest barrier to date. And with that, China’s old dream of making the yuan a real competitor to the dollar globally could come true, which would increase consumption in the Asian country, finance the pension system.

Domestic nuclear power plants can be realized

If the world wants to keep up with the growth rate of the past decades, it needs revolutionary solutions in energy use. Alternative energy sources and currently known green solutions do not yet provide an answer to this, a complete revolution in technology is needed. And this transformation has already begun, and soon the technology could create the possibility of residential fusion power plants.

Due to the basic income, the masses can leave the big cities.

The coronavirus epidemic can exacerbate income inequalities and aggravate the financial situation of families, as more and more income from work is not enough to support a family. That’s why the world can turn to general basic income again. Additionally, working from home may be more acceptable after a coronavirus epidemic, which can encourage crowds to move out of cities. The losers in the process would be the metropolitan real estate markets, which would suddenly have significant overcapacity. Also, with the development of drone technology, the benefits of urban lifestyle will decrease.

Instead of technology, creativity can come to the fore

In recent years, it has been a common practice around the world to try to bring technological advances to as many people as possible so that they can benefit from increased competitiveness. Recently, however, it has been observed that more and more people feel that the losers of technological transformation, social dissatisfaction and systemic risks have increased. That is why the world will soon have to establish a new career path to avoid even greater dissatisfaction, creativity, hobbies, art, learning can be given a much larger role at the expense of even more competitive work.

A successful vaccine will kill some companies

Currently, everyone is waiting for a coronavirus vaccine, but it can also have drawbacks. In today’s environment, the hunt for yield has already led investors to turn to increasingly risky assets. This risk taking is partly justified by the favorable vaccine news, but due to the significant stimulus seen in the epidemic, there is a risk that if vaccines are available, the economy will overheat. In this environment, unemployment would decline, inflation would pick up, and the Fed would allow long-term yields to rise, while interest rates on riskier corporate loans would also rise. Thus, the number of corporate bankruptcies would rise to levels not seen in years, especially in sectors that are significantly over-credited, such as traditional retail, which has already been rejected by the epidemic.

2021 may be the year of silver

Next year could be for precious metals, within which the price of silver could rise significantly due to increased industrial use. Solar projects can contribute to this, and the Biden government, the European Union and China also see a future in them, which could even bring a huge explosion in demand for silver. And demand cannot increase in parallel, as more than half of the silver mined today is produced as a by-product of zinc and copper mining.

New technology puts developing and emerging countries at the forefront

In 2021, economists may find that they have underestimated the growth of some emerging and developing countries for years, and analyzes may reveal that this is due to efficiency gains from the latest technologies. The first satellite internet service could be available by the end of next year, which could cause current market prices to collapse and download speeds to skyrocket. The first drink in this market could be SpaceX’s Starlink service, and the benefits may continue to benefit developing and emerging countries. Related to this is the rise of digital finance, fintech service providers, which can bring billions of people to financial services with a mobile phone.

The coronavirus epidemic has amplified all the major super trends to date, most notably structural change in the labor market.

Steen Jakobsen commented on the forecast. Among the predictions, he highlighted that the introduction of a general basic income is imminent, and that will completely transform our lives and priorities.