"The limits of the possible": Danish Saxo Bank presented "shocking forecasts" for the global economy for 2021

On December 8, economists from the Danish investment bank Saxo Bank published a list of "shocking predictions" for the global economy for 2021. In their updated list of underestimated events, experts admit that next year Germany will have to solve the financial problems of France, the digital yuan will compete with the dollar in international settlements, and Amazon will "buy" Cyprus. In addition, analysts predict a record rise in silver prices and the introduction of a guaranteed income system in the world.

On Tuesday, December 8, analysts at the Danish investment bank Saxo Bank published a list of "shocking predictions" for 2021.

In their report, experts traditionally consider underestimated phenomena in the global economy, which, in the event of an occurrence, can have a significant impact on financial markets.

“This is an attempt to explore the limits of the possible, if not always probable, which is especially relevant in the context of this year's sudden coronavirus crisis.

Of course, the most destructive and, therefore, shocking events always turn out to be the most unexpected, ”the press service of the organization noted.

Rescue of a drowning man

According to Saxo Bank, as a result of the consequences of the coronavirus, France is at risk of being among the countries with the highest debt burden.

According to experts, even before the pandemic, the national debt of the European country was close to 100% of GDP, but already in 2021 it may exceed 120%.

“Despite a large stimulus package of € 100 billion and a government guarantee program for 90% of corporate loans, France will not be able to avoid a wave of bankruptcies.

Many service companies will not survive the intermittent series of quarantine closings.

Investors will lose hope for future equity returns, leading to a massive sell-off in the major French banks, ”the study said.

As a result, Paris will be forced to turn to Berlin for help so that the European Central Bank can print enough euros to buy back the debts of the French banking system.

However, this state of affairs may put pressure on the euro.

Steen Jacobsen, chief economist at Saxo Bank, told RT about this.

“It will be a mini-crisis that will really negatively affect the euro rate.

However, in the end, Germany will be able to "guarantee" the stability of the French banking system, and after overcoming the bottom of the crisis, the European currency will begin to recover, "Jacobsen said.

Business approach

Saxo Bank experts also admit that in 2021 the American company Amazon may “buy” Cyprus.

As experts explain, large IT giants will increasingly come under pressure from governments, who believe that businesses have become overly "powerful and pays too little taxes."

Under these conditions, Amazon is able to move its European headquarters to Cyprus, where, due to its influence, it will be able to achieve greater financial independence.

“In Cyprus, a giant corporation and its taxes will be welcomed with open arms, which will help the country reduce its national debt by almost 100% of its GDP.

Amazon consultants will "help" Cyprus to rewrite its tax code on the model of the Irish, only with even lower rates of income tax and other taxes, "- the authors of the forecast.

At the same time, analysts believe that European regulators will immediately react to Amazon's actions and force the company to change its methods, and Cyprus - to bring tax legislation in line with other EU countries.

In the future, the United States and other states will also "go on the offensive against the monopolies that think too much of themselves," experts are sure.

Currency rival

According to the forecast, China's digital currency will be able to compete with the dollar in international transactions.

According to Saxo Bank experts, in 2019 the share of non-cash payments in China reached 80%, and in May 2020, the Asian republic launched an electronic version of the yuan as part of a pilot project.

According to experts, in 2021, China will continue to abandon cash and may provide foreigners with full access to its financial market.

Such actions will increase the use of the yuan for trade and investment.

“The stability of the Chinese currency and the inherent traceability and controllability of blockchain technology will virtually eliminate the risk of capital outflows and illegal withdrawals from the country.

This idea works well with China's “double circulation” strategy, as it increases the transparency of domestic transactions and encourages the use of the yuan in foreign ones, making it a tempting alternative to the dollar, ”said Saxo Bank.

Cash guarantee

In 2021, the authorities of many countries may introduce an unconditional basic income.

We are talking about a guaranteed amount of funds, which is paid by the state to a person, regardless of his type of activity, social and economic status.

As Steen Jacobsen said, the shift of large numbers of people to teleworking as a result of the consequences of the pandemic and the continued development of technology could lead to the disappearance of a number of professions and a noticeable decrease in jobs in the next few years.

As a result, according to the expert, by 2030-2035, the number of unemployed in the world may approach 2 billion.

In these conditions, the introduction of a guaranteed income will have to support the citizens left without work.

At the same time, the initiative risks turning into a powerful outflow of people from large cities.

“The introduction of basic income is changing attitudes towards the role of work in life, so many young people remain where they grew up.

Meanwhile, both professionals and low-skilled workers in big cities are starting to quit, because the supply on the labor market is falling, and with it the quality of life, ”said Saxo Bank.

Profitable metal

Saxo Bank experts are also forecasting a record rise in silver prices in 2021.

According to analysts, the price of the precious metal is capable of more than doubling (from the current $ 24 to $ 50 per troy ounce) and renewing its historical maximum.

One of the reasons for the rise in silver prices may be the weakening of the dollar in the international market, analysts are sure.

In addition, as a result of accelerating global inflation, investors will more actively buy precious metals as a more reliable means of saving money.

However, according to experts, the main factor in the increase in quotations will be a sharp rise in global demand for silver.

So, at the moment, more and more countries declare the development of green energy programs.

At the same time, precious metal is one of the key elements in the production of solar cells.

“In 2021, there will be a real shortage of silver on the market.

This, in turn, could undermine the program of Joe Biden (the candidate for the US presidency, who has already been named the winner of the election campaign by a number of Western media

- RT

) to support investments in solar energy, as well as the "European Green Agreement", China's program to achieve carbon neutrality by 2060 and other initiatives, ”the organization notes.

Different probabilities

Note that many of the events previously predicted by Saxo Bank experts did not materialize in the end.

For example, experts predicted a rise in oil prices to $ 100 per barrel and the victory of Democrats in the US elections in 2016, the beginning of revolutions in South Africa in 2018, the purchase of Tesla by Apple, as well as the refusal of the IMF and the World Bank to measure GDP in 2019.

“These forecasts do not pretend to be highly probable, but rather are intended to shake up the expert community, showing the paradox of future events and undermining the usual foundations.

At the same time, such predictions never arise from scratch and have certain grounds.

Therefore, some of them turn out to be quite realistic, "said Mark Goikhman, chief analyst at TeleTrade Group, to RT.

So, back in December 2014, the organization's specialists announced the possible withdrawal of Great Britain from the European Union in 2017.

Ultimately, the forecast was partially fulfilled: in June 2016, a referendum on Brexit was held, and on January 31, 2020, the country officially left the EU.

“These sentiments were popular and smoldered long before the referendum.

The British believed that, as one of the strongest economies in Europe and the world, the country gives more than it gains from participation in the European Union.

Ties with him were perceived rather as hindering development due to restrictions rather than stimulating due to cooperation, ”said Goikhman.

Reuters

In addition, Saxo Bank analysts predicted the growth of the bitcoin rate above $ 2.1 thousand in 2017, and then predicted reaching the $ 60 thousand mark and a sharp collapse below $ 1,000 in 2018.

Ultimately, cryptocurrencies did create a global buzz in the second half of 2017.

Then, from July to December, the bitcoin rate increased almost tenfold and at the moment rose above $ 20 thousand. At the same time, in 2018, the value of a digital coin fell by almost 80% - to $ 3-4 thousand.

“The growth of the bitcoin rate was predicted based on the current trend of the growing popularity of cryptocurrencies.

Saxo Bank analysts recognized and exaggerated it.

As it turned out over time, the forecast came true.

If you look at the general statistics on the execution of forecasts, then it is not in favor of Saxo Bank analysts, but this is not required, "Ivan Kapustyansky, a leading analyst at Forex Optimum, said in an interview with RT.