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The bank imagines that the Covid-19 vaccine could trigger a wave of business bankruptcies or that silver prices would explode.
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Saxo Bank has once again engaged in the exercise of its shock forecasts for the following year. The bank warns, as in each edition thatdo not take these seriously, and that they are not part of the official Saxo Bank market forecasts. Yet in 2019, some of his shock forecasts turned out to be fair, such as a victory for the Democratic candidate in the US presidential elections and a recession in the United States, but not due to a pandemic that no analyst had been able to anticipate. For Saxo Bank, the country would have been in recession in parallel with an increase in inflation, in other words in stagflation, which is not currently the case since inflation remains contained on both sides of the Atlantic. . The bank reminds investors that unforeseen risks in the markets should not be underestimated.
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For 2021, Steen Jakobsen, head of the bank’s investment strategy, extrapolates that the coronavirus vaccine could trigger wave of bankruptcies, as the strong economic recovery that accompanies the vaccine could lead to overheating of wages and inflation, leading to higher interest rates that would result in a series of bankruptcies for heavily indebted companies.
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A star money
Money, according to the strategist, could see its price explode to over $ 50 an ounce under the effect of low interest rates and rising inflation next year. He imagines that the demand for silver exceeds the supply, and that the importance of the metal for its use is increasing in more and more companies, including those that produce solar panels.
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Saxo Bank warns that you should not take your shock forecasts seriously.
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Steen Jakobsen elucidates that the American e-commerce giant Amazon moves its head office to Cyprus because of the ever-increasing pressure from governments on the hegemony of large technology groups. Despite the very low corporate tax rate, the huge profits of Jeff Bezos’ company would contribute significant tax revenues for the country which would allow it to extricate itself from its financial difficulties and pay off part of its national debt. .
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He also sees Germany save France victim of the consequences of the pandemic in 2021 due to an out of control public debt and a bloodless financial sector.
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Technological developments
The blockchain, technology of transmission and storage of information, could, according to him, lead to a disappearance of fake news. Because, according to Saxo Bank’s shock predictions, this technology would no longer allow information to be shared until after a reliability check, and the information would be traceable to its source.
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Technologically, Steen Jakobsen also plans that China will introduce a digital yuan which would give foreign investors access to the Chinese capital market, and challenge the hegemony of the dollar as a reserve currency.
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He also imagines that, faced with the rise of technology, a overall basic income be established and cause desertification of cities, as well as dividende de disruption distributed by a citizen technology fund, created to offset the effects of automation. He also anticipates that, thanks to an algorithm developed by the Massachusetts Institute of Technology, a new source of fusion energy leads to energy abundance.
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