What I like about the near future is that we can draw on past events to inform likely future outcomes. If we experience X and Y events, we can expect that a Z event is likely to follow. This type of prediction is a little like following a trail of breadcrumbs to their logical conclusion.
It’s important to look ahead and try to predict what comes next. Regardless of whether or not all predictions are correct. It’s important because it allows us to build an action plan for what might come next. Good predictions are a little bit like guessing the word on Wheel of Fortune. You try to collect just enough clues to make the right guess and solve the puzzle.
Below are my 2021 predictions. You shouldn’t take them as gospel. Instead, I hope you find them thought provoking and that they provide you with a new approach for thinking about the year ahead.
The Covid-19 Vaccine Rollout Will Be Slow and Disappointing
The slow vaccine rollout will continue, taking the process well past 2021 to complete vaccinations around the world.
The vaccination effort has been slow and painful in the developed world, with the exception of Israel. This is a consequence of relying on national governments to pick winners and losers using bizarre and ineffective priority systems. Vaccine processes have been poorly communicated to the public and as a result, the vaccines are not being effectively distributed.
These issues appear to be systemic, and they represent a deep underlying issue. Regional politicians want to appear in control of the situation. The early evidence indicates that they are clearly not in control.
And even if all goes well, their isn’t enough production scale or funding to provide the world with quick distribution. And so, it seems likely that Covid-19 will linger for the duration of 2021.
The Vaccine Rollout Will Necessitate Biological Passports
Because the virus is likely to linger we will require new rules and regulations to reopen as much of the global economy as possible. This will lead to the creation of vaccine passports, documented proof of vaccination and negative Covid-19 tests which permit travel.
Biological passport systems will appear in various implementations on a global scale. Functionally creating a class divide between vaccinated people and those that are not.
And biological passports will no doubt bring privacy to the forefront of political theatre in 2021. But ultimately, they represent another form of political control that will be mandated at the national level. Think of it like a biological patriot act, using Covid as the “event” to be leveraged in order to pass legislation to whittle away personal privacy.
Private companies (ex: airlines) will buy into this mandate for two reasons. 1. It will be the quickest path to ending the global lockdown measures and returning to a business as usual environment. 2. From a liability standpoint, businesses cannot afford to be blacklisted by their communities and governments because of lax policy measures that lead to viral transmission.
The bottom line is that a poor vaccine rollout inevitably leads to diminished privacy via biological passports.
New Moral Battlegrounds: Reassessing the Right to Freedom & Privacy
The right to privacy will be just one of many moral debates that is fought in 2021. As we move to the latter stages of the pandemic, we transition to the process of finger pointing and ensuring a scenario like 2020 never happens again. The age old question, “Do the ends justify the means?” will be the theme of many new moral dilemmas. Personal freedoms and a right to privacy vs. the collective action dilemma created by a global pandemic.
Examples of some of the fault lines in these moral battles will come from the following questions:
- Should you have a right to withhold an illness from your job?
- Can the government collect medical information from it’s constituents?
- Do federated government systems work in a pandemic?
- What scenarios can a government make a lockdown compulsory?
- Should their be an ordering system for who get’s medical treatment first?
- Should an obese person get vaccinated before a fit person?
These moral fights will also play out on an economic front.
In 2021, society will exist on a frontier between economic Recession and Depression. As a continuation of the vaccine rollout theme, the sputtering lockdown policies of the west will continue sporadically through 2021. And as a result, developed nations will be forced to continue pumping stimulus to maintain a “status quo” of sorts. Propping up businesses and ineffectively helping everyday people.
Less developed nations will struggle with minimal means of helping themselves.
The New, New Deal: “Building Back Better“
Eventually, the vaccine will reach large portions of the global population and we can expect a rollback of lockdown measures. As this happens, we can look to the Great Depression for the inevitable playbook on what comes next.
As we work our way out of the virus, with a majority of the population vaccinated, we can expect “new deal” style policies. The three pronged approach that worked so well under Roosevelt will be leaned upon again. 1. Immediate aid to survive, which we’ve already seen and will continue to see. 2. New commissions and infrastructure built to get people back to work and prevent a continued slide towards economic hardship. 3. Panels, task forces, and tribunals of finger pointing to determine the causes of hardship and develop “never again” solutions.
There are already signs that of the New, New Deal, apparent when global leaders speak the words “Building Back Better”. Originally a disaster recovery framework, these words are a fancy way of signaling that policy will stimulate economies and get people back to work via infrastructure spending.
Blowing Up Global Reserve Currencies
Continued stimulus and aggressive government intervention on a monetary policy front, although crucial for the survival of the global economy, will ultimately wreck western currency systems. There are clear signs it’s already happening. Major stimulus during the pandemic, combined with the inevitable New Deal style stimulus in 2021 will create significant inflation.
ie: to fund the support of global economies, governments will be forced to print money to fund policies rather than raise taxes. This is because the pandemic has been particularly hard economically on both businesses and everyday people. In the absence of an ability to raise taxes, governments will be forced to print money and devalue the currency.
This creates a fertile environment for the coming of age of bitcoin and the decentralized digital asset.
A Significant Rise in Nationalism
As governments that can inflate their currencies do so, there will be consequence for the global financial system. It will force nations to consider alternatives to weakening global reserve currencies such as the US dollar. And in this environment, nationalism will thrive as an emerging theme. It’s not such a surprise given history is littered with examples of nationalist movements in times of economic hardship.
With that said, it does remain unclear as to whether or not western nations will be able to effectively work together. The recent Brexit deal was positive for globalism, however there are many examples of regional protectionism that create global disunity.
In 2021, we can expect the geopolitical landscape to become more complicated as nationalism thrives.
Cold War Style Proxy Fights Around the World
And as nationalism rises it will increase global animosity with China. Playing out on interesting fronts such as 5G infrastructure, African and Third world post-Covid-19 aid, and the post-covid-19 finger-pointing. Ie: who is to blame for Covid?
The east vs west paradigm dispute will play out along the model of the US vs USSR proxy war fighting. We will see many strange global disputes that result from underlying east vs west tensions in 2021. I don’t expect actual violence, but I do expect economic and cyber conflict.
A Changing Digital Dynamic – Powered by Increasing Internet Access
There are nearly 4 billion people that still don’t have reliable access to the internet. And Starlink will play an increasing role in bringing the entire global population online. As more of these people start to come online in 2021, we’ll begin to experience a form of digital gentrification. Western Nations are overwhelmingly less populated than the areas that will benefit from Starlink and new internet access.
As Starlink brings more people online, they will interact with the digital population and influence digital culture according to their unique customs. And they will join the internet in numbers that actually result in cultural impact. Starlink will also start to disrupt authoritarian regime crackdowns on internet access. Such as the Belarus election internet shut down and China’s Great firewall.
It’s clear that in 2021, increasing access to internet in a Post-Covid world will play a significant role in altering the culture of the internet.
Taking Advantage of These Predictions
So what does this mean for an individual that’s observing these breadcrumbs and aligning them to create a narrative of what comes next? It means that we can identify and position ourselves to benefit from the unique opportunities that will emerge.
Trust the Cantillion Effect
With significant stimulus and inflation on the horizon, it makes sense to invest in assets that we know will receive government support. The New Deal is going to be shaped by current global administrations. And they are telegraphing their policies with this “Build Back Better” narrative. This means buying assets at the intersection of critical infrastructure (too big to fail business sectors – ex: FAANG and large banks), alternative energy (wind and solar), and companies providing solutions that prevent future catastrophic pandemic scenarios. The goal is to find healthy assets that can survive economic fallout and inflation on their own, or can be expected to receive government support.
It also means that government stimulus will benefit these key elements of the global economy first, with less value trickling down to the rest of the economy over time. Expect a “K curve” recovery scenario to become even more pronounced in 2021 as politicians fight over the appropriate path forward.
The people that position their assets to benefit from where the stimulus goes first will come out ahead in 2021.
Stimulus in Fiat Supports The Case for Bitcoin
Regardless of where you stand politically on pumping a struggling economy with money, it’s clear that global governments will continue to do so for the foreseeable future. As a direct consequence, we can expect major institutions to continue to look for alternative investment opportunities and stores of value for their treasuries.
This is the bull case for Bitcoin. And what is good for Bitcoin is good for the rest of the digital asset ecosystem. In 2021 it seems likely that the floodgates will open for institutional buyers to enter the Bitcoin trade which will continue to pump the price up. I have no idea what the price will be but my strategy continues to be a dollar cost average approach, buying a little bit with each paycheck.
None of the above is really a stretch of a prediction. It’s a trend that is already underway. But what I do see taking place over the coming year is that a government at the state or local level begins taking a position in bitcoin.
This would set a massive precedent and be a catalyst for considerable price movement higher. In this Digital Age, local and state governments must treat their jurisdictions increasingly like corporations. Making choices that position them for long term success. They too are faced with the negative consequences of inflationary stimulus and must seek alternative investments and stores of value.
The Evolution of Remote Work
Additionally, the remote work trend will continue, but in an evolving fashion. As the vaccine rollout provides immunity to large portions of the population, there will be a relaxation of regulation. A boom in commerce and travel will immediately follow. Coffee shops, co-working spaces, and extended stay travel businesses will reap significant upside as remote workers experiment with their new freedoms. AirBnB and other hospitality providers with long term stay options will capture a growing market of remote workers traveling for extended periods of time. As a consequence, the tax implications of remote work will come to the forefront in 2021.
2021 Predictions Closing Thoughts
Unfortunately, I believe 2021 is going to be a very tough year for many people. Many of the important and necessary policy choices faced during and immediately after the pandemic will have lasting consequences on the global economy. And I believe the bill for these choices will start coming due in the latter half of 2021.
But like all predictions, a lot can happen over the next year that proves many of these ideas false. In truth, I hope I’m wrong in many areas and that we get back to some aspect of normal soon. Despite the doom and gloom of these predictions, I remain optimistic in the long term. My belief is that the world will find a good path to push forward on. And that we will work through these issues and come out stronger on the other side. By facing the challenges ahead with open and pragmatic eyes, we will create more realistic solutions.
I’m building a digital age worldview. Every Monday, I write and curate a publication called The Sovereign Individual Weekly. A newsletter that includes news roundups and analysis to help digital age workers adapt and thrive in our changing society. Topics intersect at geopolitics, fintech, crypto, individual responsibility, and personal freedom. Subcribe below, don’t get left behind.