2021 forecasts and predictions

In short, I predict 2021 will be a continuation of 2020, with preexisting trends accelerating or remaining intact.

Some people get annoyed if your predictions are not extreme enough, but this is prediction list, not a wish list. Many people may wish or hope to see unrest that upsets the status quo, but that does not mean it will happen.

The interesting thing about predictions and forecasts is, people tend to miss the really big things, which is to be expected: no one predicted 911 in 2000 (although a basketball player, of all people, hinted at the possibly of an attack in 1996 by Bin Laden, but was rebuked), the collapse of the USSR (many predicted its collapse, but either they got the year wrong or made the same prediction so many times that they were right due to chance and not skill), the 2008 financial crisis (you can count on a single hand the number who correctly forecasted it in 2007, and a blockbuster and best-seller was made out one of them, to get an idea of the rarity and significance of this accomplishment), Covid in 2019 (some people predicted a pandemic in the not-so-distant future, but no one got the year right), and so on.

But when the bad event does come, almost everyone overestimates its duration and severity, whether it is civil unrest, the aftermath of the 2008 financial crisis, or the economic fallout of Covid. The consensus in March-April 2020 by pundits and other experts was that that the US economy would take years, decades to bounce back, if ever, but the S&P 500 would go on to make new highs just 5 months later, and all Covid-related GDP losses are expected to be recovered by 2021. Very few, if any, pundits foresaw such a strong, v-shaped recovery in the stock market and economy even as the virus continues to spread.

Despite all the hype, the vaccine will not put much of dent in terms of daily Covid case counts and deaths. Even if there is an appreciable decline, it will not necessarily imply that the vaccine will have worked. The Covid vaccine is not at all like childhood vaccines of diseases such as Polio and Measles, in terms of being much less effective, having lower compliance rates, and much shorter duration of protection owing to the high propensity of Covid to mutate, which means multiple vaccinations will be needed, hence lowering effectiveness even more so. The restrictions and lockdowns will continue all year. All the experts who in mid-2020 promised that things would return to some semblance of normalcy by early 2021 were wrong again, as experts tend to be. It is the usual bait and switch: force compliance now in the hope/promise that said restrictions will be rescinded at a later date, and when that date comes, nothing changes or it is pushed back again. These politicians, health experts, policy makers, etc. are liars.

In spite of all the predictions by the alt/dissident-right about how bad Biden will be, I predict the Biden presidency, especially his inaugural year, will be surprisingly uneventful. Biden’s main focus , as I said many times, will be on the economy (such as pushing for more stimulus, as if we haven’t had enough stimulus already) and the logistics of distributing the Covid vaccine to millions of Americans. There will be no court packing, no tax hikes, no student loan forgiveness, no war with Iran, etc. The neocons may want to push America into another Middle East quagmire, but will probably wait until Biden is gone.

Styxx666 keeps referring to him as ‘Beijing Biden’ but the evidence suggests Biden will continue Trump’s ‘hard line’ approach to China. A couple weeks ago, the Biden campaign put pressure on the EU to halt its deal with China, so I don’t get the impression at all that Biden wants to go easy on China.

The stock market will keep surging in spite of record-high Covid deaths and cases. I am predicting at least 20% gains for the S$P 500 and 30% gains for the Nasdaq. As I correctly observed in October, Covid had no long-term deleterious effects on the economy, but rather made the US economy more efficient by eliminating a lot of the dead weight and expediting automation and productivity-boosting technology such as remote work, remote learning, cloud solutions, and video conferencing. The harsh reality is, if you look at factors such as IQ, race, socioeconomic status, and comorbidity, the majority of Americans who died of Covid were useless eaters who contributed little economic value while alive. A lot of these people were obese and or had preexisting conditions such as hypertension, dementia, or diabetes and were a drain on healthcare costs, or would be a drain on future healthcare costs. Additionally, as I observed, the US population is high enough that the Covid death toll, while high on a nominal basis, will be replenished in just a single year merely by virtue of baseline population growth.

Tesla stock will keep surging…no-brainer prediction. Same for Palantir stock. Same for FAANG stocks, Microsoft, and PayPal. Tesla will be worth $1 trillion, on its way to $10-30 trillion valuation within 2 decades as I predicted. Amazon stock will probably double in 2021. An increasingly large percentage of economic activity will be funneled through a shrinking number of companies.

Inflation will remain persistently low, at around 2% CPI, in spite of trillions of dollars of stimulus and other spending. The US dollar will regain some of the ground it lost in 2020. There will be no hint or recession even as many businesses remain closed and Covid deaths and case counts keep steadily rising.

The ‘convivence economy’ will continue to boom, such as food delivery, delivery via drones, and on-demand streaming entertainment. People will pay a premium for the convenience of not having to leave their homes for services and goods. It is not just because of Covid fears, but I think many people prefer not having to wait in line or having drive around in traffic, when everything can be delivered to them.

Airbnb stock will keep rising. Same for rent prices in spite of Covid getting worse. The reality is, there is too much demand and not enough supply, so rent prices will keep rising on a real basis. Tuition costs will keep rising too. No bursting of the college debt bubble. Colleges will benefit greatly by saving costs by hosting classes remotely while keeping tuition costs unchanged or raising prices even more. Similar to in 2008, Covid mainly hurt low-income people and low-skilled industries, further widening the college wage premium and increasing the demand and the value of a college degree in an increasingly competitive and efficient economy, so there is no reason to expect tuition costs to fall because of Covid.

The US economic and cultural hegemony and machine will retain its power, but not as much as it would have under another 4 years of Trump. A Biden presidency means a slight weakening of America’s influence, with China, the UK, Russia, and Germany possibly playing a larger role in global affairs. As I said awhile back, Biden is the most ‘culturally and civically European’ president in recent American history, so America will, very slightly, become more like Western and Northern Europe under Biden. EU leaders have expressed strong willingness, support, and enthusiasm to work with Biden, even more so than under Obama. I predict Biden will not step down in 2021, such as due to health issues.

There will be no marked civil unrest beyond the occasional protest or scuffle that gets inordinate coverage on social media despite not moving the needle much in terms of policy or other lasting changes. BLM and antifa will probably be more subdued, knowing that their antics make Biden look bad. Portland and Baltimore will remain dumpster fires. There will be growing disaffection with the direction the country is going in and its leadership, by both sides of the aisle, but such discontent will not manifest in the form of unrest that is societally destabilizing. It is something of a miracle that there is not more unrest given how many millions of Americans are dissatisfied with the system and how trust in America’s institutions and leaders keeps eroding.