(This is the first of several posts this week in which prominent PBers give their predictions for the New Year – if you would like to join them please get in touch – MS)

I think sometimes one needs to take a step back and make some reasonably wild predictions. Now, I doubt all, most, or perhaps any of these will come true. But that’s not necessarily the point. These are to stimulate debate, and hopefully I’ll get bragging rights for suggesting something really unlikely that actually happens.

Let’s start with the world…

Normality comes back quicker than anyone expects. Where BioNTech and Moderna led, AstraZeneca, Johnson & Johnson, Gamelaya, Curevac and Novavax follow. By April there are half a dozen licensed vaccines. With so much manufacturing capability, pretty much anyone gets a vaccine by the end of 2Q. By late summer, CV19 has almost entirely faded from sight. Indeed…

There is a lot of pent up demand, and economies (UK, US, even the Eurozone) boom in 2021. People haven’t been out for months. Now they get a chance to head out, and everyone tries to get away at the same time. This is combined with incredibly accommodative fiscal and monetary policy from the world’s governments. World GDP grows at its fastest in decades.

By the end of the year, inflation has started to appear. Ah yes, the dog that didn’t bark. But 2021 is the year which marks the start of the long-term uptick in inflation and bond rates.

Which means the second half of 2021 might be a torrid one for stockmarkets. Booming economy… dropping stockmarkets? Sound crazy? It’s not that uncommon. Because booming economy begets rising rates begets falling share prices. I think 2021 will be the first year in a decade that world stock markets see a serious down move.

mRNA treatments become the hottest thing in medicine. Using the body’s own systems to stimulate immune responses allows vaccines for the flu and for other things to happen much more quickly. By year end, people are touting the opportunity in oncology, using mRNA to rapidly prime the body’s immune system to fight cancers.

Now to politics…

Nothing much exciting happens in the UK. Boris doesn’t go anywhere. Brexit is fine. The UK’s economy neither goes into overdrive, nor does badly enough for anyone to be particularly upset. The Conservatives do OK in the local elections. Boris, it turns out, quite enjoys taking the credit for the work of scientists across the world.

At least one Republican Senator leaves the caucus. I actually think there’s a very real risk the whole party splits: simply, the traditional right thinks (probably correctly) that shadow of Trump lost them the 2020 election and endangers them going forward; the Trumpian right on the other hand thinks (probably correctly) that they are half the Republican Party, and the more enthusiastic half, at that.

I suspect that the Republican Party would be most likely to lose Lisa Murkowski. But equally, it could be Tommy Tuberville. What I do know is that civil war is likely in 2021.

The Dutch General Election produces a decisive winner. I know, I know, it sounds ridiculous, as just a year ago, there were six parties all polling between 22% and 14%. I think Rutte’s Centre Right VVD, buoyed by my forecast economic recovery, tops 40% and gets his choice of coalition partner.

In Russia, Putin’s United Russia has a pretty bad time in the elections to the Duma. It might even fail to top the psychological “three times the nearest opponent” mark.

And in Germany… Well, with Frau Merkel gone, who will follow? Few get to leave at the time of their choosing in politics. She has. I’m going out on a limb here. The CDU/CSU will struggle with Frau Merkel gone. It’ll lose the Eurosceptics to the AfD, the free marketeers to the FDP, while the Greens will end up outpolling the SPD markedly. I think the Greens will end up in the low 30s as will the CDU/CSU. Next Chancellor of Germany: Annalena Baerbock.

Robert Smithson