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The COVID-19 pandemic and tough elections in the United States have brought what might have seemed the distant future closer together, accelerating virtually all macro-social and technological trends, says Saxo Bank.
Every year the Danish Saxo Bank prepares “shocking forecasts” for the world economy. They are based on unlikely and underestimated events that can seriously affect financial markets.
In 2021, analysts who predicted the defeat of Donald Trump expect, among other things, a record increase in corporate defaults and the desolation of big cities. Correspondent.net says the details.
Unconditional basic income will lead to the desolation of megacities
The impact of the coronavirus pandemic on the economy has led to greater inequality and a massive loss of jobs due to the quarantine crisis.
The widespread implementation of a universal basic income, that is, the financial assistance provided temporarily to citizens by the authorities in the context of a pandemic, will become a new permanent reality to mitigate the risk of a complete destruction of the links between the different strata of society.
This, as well as the ubiquity of telecommuting, will lead to a geographical reallocation of the workforce: people will no longer need to come to big cities in search of money.
The departure of office workers will cause a sharp drop in the prices of office properties and a decrease in demand for stores and restaurants in these areas.
Professionals will begin to leave the cities as job opportunities diminish. And with them the appeal of megacities, due to excessive house prices and crime.
Amazon “buys” Cyprus
The coronavirus pandemic is the best thing to happen to Amazon: People from all over the world were forced to stay at home, work remotely, prompting a rapid increase in online sales, while businesses began to scale. your capabilities to work in the cloud (for example, using Amazon Web Services). ) so that your employees can work from home via the Internet.
The growing aversion to civil servants will force the corporation to move its European headquarters to Cyprus and literally “buy political power at all levels” in this country.
Cyprus expects the US company taxes to reduce the debt-to-GDP ratio, which has almost reached 100 percent. Amazon will help Cyprus “rewrite” its tax code to follow the Irish pattern, but with lower rates of income tax and other taxes.
However, European regulators will force Amazon to change its working methods and Cyprus will adapt its tax legislation to European Union standards.
In turn, the United States and other countries in 2021 will go on the offensive against monopolies, which they believe have become too powerful and pay too little taxes.
Technological advance in energy
In 2021, advanced artificial intelligence (AI) systems will solve the most complex non-linear problems in plasma physics, paving the way for the commercial use of nuclear fusion.
The SPARC reactor project, approved in 2020 at the Massachusetts Institute of Technology as the cheapest and most promising thermonuclear power, is rapidly being updated with new artificial intelligence technologies.
Nuclear fusion technology will be implemented quickly thanks to abundant public and private funding. Harnessing thermonuclear energy will eliminate global food and water shortages through desalination of seawater and vertical agriculture.
In the world of nuclear fusion, there will be cheap transportation, universal robotization, and automation, and today’s youth will become the last generation to work out of necessity.
More importantly, nuclear fusion power will make virtually every country independent of energy and food and provide the largest and fastest rise in living standards in history.
Germany will pay for France
France will become the country with one of the highest debt burdens in Europe. Even before the onset of the pandemic, the size of its national debt was approaching the 100 percent of GDP threshold, and its private debt was rapidly approaching 140 percent of GDP.
This is significantly more than in Italy (106 percent) or Spain (119 percent). The pandemic has only accelerated the process: In 2021, the country’s national debt is expected to exceed 120 percent of GDP.
A € 100 billion stimulus package and a government guarantee program for 90 percent of corporate loans will not help prevent a wave of bankruptcies.
Many companies in the service industry will not survive the intermittent series of shutdowns due to quarantines. And investors’ frustrated hopes of equity income will lead to a powerful sell-off of securities from France’s largest banks.
In this context, France will have to turn to Germany for help so that the European Central Bank can print enough euros to massively buy back the debts of the French banking system and avoid a systemic collapse.
Blockchain will destroy fake news
In 2021, the growing threat of misinformation and loss of trust even in the established media will reach critical heights. This will require a response from the industry, including the largest social media and platform companies.
Twitter and Facebook are investing heavily in blockchain technology. Thanks to technology, the company has made any change in news content immediately visible to everyone, and any news post can always be traced back to its original source, which is a means of combating misinformation.
First, companies are investing in these technologies because of the regulators’ own threat – their controls and oversight have become even more pronounced.
Alternative news websites spreading conspiracy theories like QAnon, misinformation about the coronavirus pandemic, falsified voter fraud tests, and the like will suddenly be unavailable on major platforms. Reality wins and the pseudo-knowledge that is reproduced loses.
Vaccines will destroy corporations
The coronavirus pandemic has significantly exacerbated the accumulation of the debt burden in the global economy. Yields on safe government and corporate bonds are at record lows, forcing investors to switch to risky assets.
It turns out that during the pandemic, the economy was overstimulated, and after vaccination, it very soon overheated. Inflation is increasing and unemployment is falling rapidly.
The US Federal Reserve System allows long-term Treasury yields to rise, dragging riskier bonds with it.
The number of corporate defaults is increasing to a multi-year high. The first to collapse are the most indebted companies in the offline retail sector.
Tectonic shifts in capital markets due to the digital yuan
China launches the Digital Electronic Payment Facility (DCEP), a digital version of the yuan on the blockchain. This is the People’s Bank of China’s next step in digitizing the country’s finances after 80 percent of all payments here were made through WeChat Pay and AliPay in 2019.
Foreigners have full access to China’s capital markets. The stability of the Chinese currency and the transparency of the blockchain will eliminate the risk of capital outflow from the country.
The digital yuan will be considered an “unsecured currency”, but the Chinese authorities will appreciate it as an advantage. This allows negative interest rates on “cash” and facilitates the target of nominal GDP.
Silver demand
2021 will be a favorable year for silver as a tangible asset and precious metal due to the increasing demand for its industrial use.
A silver shortage will begin in the market, undermining political support for investment in solar energy during the term of US President Joe Biden, the European Green Deal, China’s program to achieve carbon neutrality by 2060 and other initiatives. .
Furthermore, more than half of the silver mined is a by-product of zinc, lead and copper extraction. For this reason, it is difficult for mining companies to meet increased demand.
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