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Everything is set for a grandiose 2021. Nothing, it seems, can cloud the positive expectations.
The financial markets are rejoicing at the enormous amount of money that the central banks will continue to make available in the coming months.
Most economists predict that globalization will pick up speed again.
Because the over-protector Donald Trump takes his hat in a few days and his successor Joe Biden will lead world trade back on the original path.
And then there is the biggest problem: the pandemic.
Here, too, the worst is likely to be over.
After all, very few economies have slipped into disaster.
And now the vaccinations are starting.
Billions of doses will be administered in the coming months.
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So the end of Covid-19 seems near.
The German share index Dax started the new year with a new historical record.
The leading index jumped to over 13,900 points.
But there are also the warning voices that draw attention to the fact that it will not be that easy after all.
If all actors see the same optimistic scenario for 2021, caution is called for.
The consensus is seldom right, as last year showed when, after a few weeks, the unity opinion became irrelevant.
The American think tank Eurasia Group, which spoils the game at the beginning of the year, reveals how fragile all this optimism is.
In her Top Risks Report, she relentlessly names the potential political and economic dangers for the world that have been masked by the large amount of money from the central banks.
Source: WORLD infographic
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"The world is entering the decisive year 2021 without global leadership in terms of political models, trade standards or an international architecture that could be followed," writes Eurasia Group founder Ian Bremmer in the foreword to the study.
One would hope that a global pandemic would provide an opportunity for world leaders to work together on a grand scale, as was the case after the September 11, 2001 terrorist attacks or the 2008 global financial crisis.
Global cooperation is all the more important because after the health consequences, economic ones now come to the fore.
Source: WORLD infographic
Many experts place their hopes in the new American President Joe Biden, who will take office on January 20th and who is assigned the role of repairing and unifying the western world.
But this hope could prove to be deceptive, said Bremmer.
Ironically, the 46th US President is the number one risk factor in the Top Risks Report.
With 80 million votes, Biden had the best result in American history.
"But incumbent President Donald Trump's refusal to accept the result of an election that he declared stolen underscores how divided the country has become - and will remain," writes Bremmer.
Many voters would not see Trump's behavior as a blow to democracy, but see it as brave.
Every third American still has any confidence in the office of president.
It is worse among Republican voters.
Not even one in five Trump voters sees Biden as the legally elected president.
Source: WORLD infographic
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And distrust does not stop with the population.
Even seasoned Republicans in Congress followed Trump's crude arguments and thereby damaged the office of the new president.
In addition, Trump has shifted the weights in the important Supreme Court in favor of the Republicans by appointing a loyal Conservative judge.
"Biden will take office with the weakest mandate since Jimmy Carter in 1976," the risk report reads bluntly.
Few observers would believe that he would run for re-election in 2024 anyway.
Biden could become a lame duck.
“The markets generally welcome a power-sharing between Democratic presidents and a republican congress, as it creates hurdles for tax increases and new regulations,” writes Bremer.
But there will be a stalemate worse than in the past as Republicans could block all of Biden's initiatives.
“A superpower torn in half cannot simply return to normality.
And when the most powerful country is so divided, everyone has a problem, ”says the report.
"Despite the economic recovery, the geopolitical recession will worsen."
Hope in the central banks
But that is precisely not the scenario that the financial markets have priced in.
In the outlook for 2021 of the major investment banks, geopolitical risks are almost completely absent.
Instead, there is talk of relaxation in global relations - for example between the USA and China.
The Covid risks are also largely ticked off after the start of mass vaccinations for markets.
It is still far from clear how long the vaccine will immunize against the virus and how quickly economic life will return to normal.
"Neither the coronavirus nor its far-reaching economic consequences will immediately go away with the vaccinations," says the risk report.
Many governments are now struggling with higher debts and are no longer able to easily spend money to alleviate the social consequences of the pandemic.
This risk does not seem to have reached the financial markets yet.
The market participants are counting on the central banks to step in and nip a debt crisis in the bud with massive bond purchases in case of doubt.
"Perfection is priced in on the markets and that at a time when debt is historically high," writes Hans Lorenzen, strategist at the major American bank Citi.
“I am firmly convinced that the central banks will win the 'war' and ensure good financial market conditions even with weak fundamentals.
But it can happen that they lose a few battles, ”said Lorenzen.
The short-term risks are much greater than the markets would have believed.
The Citi strategist also includes global economic development.
He reckons that the economy will only pick up in the fourth quarter.
This is where it differs from consensus.
Economic experts from the OECD, for example, expect the global economy to reach the pre-corona level by late summer, thanks mainly to China.
But the Middle Kingdom can also be found in the risk report of the Eurasia Group.
The conflict with America could worsen even without Trump.