7 Predictions for 2021
The following is from a Bloomberg article with my comments. Most will not happen. If it starts to materialize, consult your financial advisor before take actions accordingly. Again, I am not liable for any actions. This article is written in 12/2020.
1. We will find soon whether the U.S. Senate would by dominated by Democrats with the result of the Georgia’s seats. If the democrats control the senate, then “Technology shares plummet and U.S. Treasury Yields surge on supply fears”.
My comment: It is easier to pass the proposed laws without fierce opposition. I prefer the opposition party gives reasons of rejecting and/or how to amend any proposed laws instead of just saying “No”.
2. “U.S. and China find common ground”. Yuan would appreciate.
My comment: It would likely to happen as Biden is less confrontational than Trump. Yuan’s appreciation would cause the U.S. consumers and Chinese exporters. If they take out the bans on Huawei, actually it would be good for the U.S. chip suppliers to China in the long run. It is explained in the co-prosperity chapter (one of 4 outcomes in this trade war) in my book “China and US: Apocalypse or Co-Prosperity”.
3. “Monetary and fiscal stimulus drives strongest recovery… Copper rallies 50%”.
My comment: It also adds to our national debt. It would have inflation, lower our competitive edge and shaken our USD as the reserve currency. Most investors should have 5 to 20% in gold ETFs and/or gold miners.
4. “Oil prices fall back to $20 barrel”.
My comment. $30 is my estimate if it happens. Many oil companies have good forward P/Es. In some locations, green energy is about the same price as oil. OPEC has not been united.
5. “EUR/USD falls to 1.06 by midyear”. No comment as there are too many other factors.
6. “Dollar crashes 15%”. It is likely to me. That is why we should use gold and metal as a hedge.
7. “Emerging-market debt defaults… equities fall 30% by second quarter”.
My comment. Likely, as they have been overly extended. China may forget some debts in building their infrastructure. Avoid this risky market as the “potential reward / risk” is not justified.
8. “Biden steps down…Sharp correction in the U.S. equities…dollar decline accelerates”.
My comment: I predicted the same in my article “Disaster in 2020”. I also predicted the VP will be the first woman president within 5 years for many reasons including Chinese astronomy:
· Due to bad health; not a surprise for his old age.
· Unable to unite the divided country.
· Poor economy leading to high unemployment and poor stock market. ‘
I also add my own prediction here. China will recover better than most other countries. Korea and China would be the only developed countries that have a positive GDP in 2020. U.K. may have another year of depression due to the new strain of the virus, exit from EU and China’s revenging actions similar to Australia.
China recovered from this pandemic in less than 90 days and the factories started to return to normal in April, 2020. The bottleneck now is lack of ships and containers to export their products. If it continues in 2021, China’s GDP could be back to 7% (some even predicted 20%). With “One Belt, One Road” and expanding economy, their digital currency would challenge our mighty USD. Despite of the U.S. delisting, I expect Chinese stocks will gain in 2021.
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This is from an article in in my book "China and U.S.: Apocalypse or Co-Prosperity".
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