Saxo Bank has released its 10 Outrageous Predictions for 2021. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets.
The predictions this year are:
- Amazon “buys” Cyprus
- Germany bails out France
- Blockchain tech kills fake news
- China’s new digital currency inspires tectonic shift in capital flows
- Revolutionary fusion design catapults humanity into energy abundance
- Universal basic income decimates big cities
- Disruption dividend creates Citizens Technology Fund
- A successful Covid-19 vaccine kills companies
- Sun shines on silver, which sizzles on solar panel demand
- Next-generation tech supercharges frontier and emerging markets
While these predictions do not constitute Saxo’s official market forecasts for 2021, they represent a warning against the potential misallocation of risk among investors who might typically assign just a one percent chance of these events materialising. It’s an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year’s unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus.
Commenting on this year’s Outrageous Predictions, Chief Investment Officer at Saxo Bank, Steen Jakobsen said: “For the 2021 batch of Outrageous Predictions, the Covid-19 pandemic and the painful US Election cycle have brought what might have seemed a distant future a quantum leap closer, accelerating nearly every underlying social and technological super-trend. Simply put, the traumas of 2020 mean that in 2021, the future is now.
“We’ve seen the fastest bear market and recovery in history, as well as central bank balance sheets and fiscal deficits exploding at an unprecedented pace. So our not-so-outrageous prediction is that 2021 will bring the beginning of a reality check to the idea that “extend and pretend” can stretch to infinity and beyond, even as markets have been pricing in that very expectation.
“Covid-19 has accelerated all major super-trends. A structural shift in the labour market is at the top of the list but at the same time, the total economic pie will be even larger – even per capita. Universal Basic Income is coming, and this will lead to a new way of living and new priorities. It will also require a new way to redistribute the economic pie, without which we would see a self-limiting vicious concentration of all resources into the hands of monopoly and rentier incumbents. One key enabler of that future is a rise in energy available per capita, with almost no negative impact on our natural resources, and with sufficient extra output available to power the high-end technology systems like advanced AI and quantum computing. This would bring us close to ending cancer, preventing the fall-out from future pandemic risks, and dealing with fake news through super-charged blockchain technology.”