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SaxoBank PDF: Outrageous Predictions for 2021

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EDITOR NOTE: If you’ve been around long enough, you’ve probably seen a few strange yet entertaining futurist predictions that never quite pan out the way they’re visualized. However, they’re fun to read or look at. And although most predictions don’t actualize quite the same way as conceived, some of them come close. For instance, in the early 19th century, some futurists thought air warfare would be dominated by combat hot air balloons. They were close. But they couldn’t have imagined the fighter planes dominating the skies a century later. More recently, we don’t have Star Trek communicators, but I’d argue that mobile phones are even better (minus the phaser power). So, what about 2021? Will Amazon buy Cyprus? Will blockchain kill all fake news? Will China’s digital currency cause major tectonic shifts in global capital flows? Here are several “outrageous predictions” for 2021.

For the 2021 batch of Outrageous Predictions, we decided for the most part to don our futurist caps rather than getting too bogged down in market trends and central bank policies. That is largely because 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.

In 2020, we’ve fretted about the world becoming ever more fragmented, with biased media and social media algorithms driving everyone to the extremes and towards living in parallel realities. Even an ability to agree on the basic facts seems under threat. This year’s set of 2021 Outrageous Predictions generally expresses the hope that these tendencies will reverse, believing that the social mood is cyclical and we can learn from our mistakes, while technological evolution is progressive in nature and always marching forward in the background.

As 2021 rolls around, we encourage everyone to look in the mirror and do their best to break old habits, to stop assuming that the past trends will always continue and to consider how paradigms are rapidly changing. Technology like AI, automation and blockchain are disrupting everything from whole categories of jobs to the very structure of our society and its assumptions about what constitutes capitalism. Now a bit on how we came about drumming up this year’s set of predictions. Sure, we could have taken up the spirit from some of our previous sets of predictions, but after the Covid-19 outbreak saw an incredible super-sizing of past policy responses, it was tough to compete with the real world for predictions on policy and markets. We saw the fastest bear market and recovery in history, as well as central bank balance sheets and fiscal deficits exploding at an unprecedented pace in 2020. And it was too depressing to contemplate cranking out predictions on what the end game of the current terrible policy choices will look like.

So, on that note, 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. The more interesting and more outrageous future that we prefer to contemplate will come parallel to, and simultaneous with, the eventual failure of the oneway march of monetary policy that we’ve seen since Greenspan bailed out Long-Term Capital Management (LTCM) in 1998. And Covid-19 has accelerated all major super-trends. A structural shift in the labour market is at the top of the list: consider the credible prediction that by 2030, two billion jobs will have been lost due to AI, automation, globalisation and faulty economic systems. But at the same time, the total economic pie will be even larger – even per capita.

Universal basic income is coming, as we can’t have whole swathes of humanity without income, food and shelter when aggregate global economic output is at an all-time high. This will lead to a new way of living and new priorities: away from expensive, stressful life in the cities, and towards a rediscovery of quality of life, arts and craft pursuits, and broader educations. 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, hence the focus on fusion. Imagine a world where the cost of energy is a fraction of what it is today, 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 and other knotty issues through super-charged blockchain technology. We have decided to take a bet on the future now and we hope you like the journey. And as always, our annual caveat is that these Outrageous Predictions should not be seen as our official view on the market and politics. This year, more than ever, we’re trying to provoke you and ourselves to think outside the box and to engage in discussing the important topics we raise. Let the fun, and the future, begin.

Originally posted on Saxo Bank

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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