Why 2021 Hides More Dark Clouds than Ever

Ever since we were kids, there's a mental cycle that sets in whenever we are about to enter the upcoming year. We celebrate, hoping for a good next year. But this time, there's a higher anticipation and a clearer demarcation between the previous year and 2021. This isn't just wishful thinking on our part; it comes with a deep realization of the turmoil and hardship 2020 has brought us.

The End of a Dark Year

The year 2020 has been universally acknowledged as one of the most challenging and impactful periods in recent history. To many, it marked the end of an era where everything seemed to go wrong. The global pandemic, economic downturns, political upheavals, and social dislocations have left a lasting impact.

As we look to 2021, there's a widespread longing to see a return to normalcy. However, such expectations are often tinged with apprehension. Many people are simply tired of the constant challenges and are eager to 'Get rid of 2020'. This is a sentiment echoed by Sneha, who wrote, 'To be honest most people are expecting to be a normal life in the next year. Most people are bored at this time.'

Political and Economic Outcomes

Some even explore the idea of nostalgia for 2020, suggesting that it could be a comforting retreat from today's political and economic uncertainties. In a sarcastic twist, the idea of looking back fondly at 2020, with no accountability for eight years of consolidation, implies a fear of the future. This sentiment particularly hones in on the possibility of a shift towards a more authoritarian regime.

Questioning how people can be so sure that everything will be 'normal' next year, one answer presents a grim prognosis: 'The Great COVID Depression'. In the aftermath of the 2008 Global Financial Crisis, central banks around the world have been implementing quantitative easing, a policy aimed at making money cheaper and more readily available. This flood of liquidity has often masked underlying economic vulnerabilities. However, the introduction of more tax cuts in 2020, coupled with the sudden and unprecedented impact of the pandemic, has created a perfect storm.

Global Economic Outlook

Initially, the stock markets saw a renewed boom, driven by economic stimulus and support from governments. However, as the reality of the situation sets in, the market's newfound confidence may wane. The share market's continued rise in 2006 and the early part of 2007, despite warning signs, eventually ended in the devastating crash of 2008. The potential for a similar outcome is real, especially if the vaccines prove less effective than hoped or if industries like travel and tourism fail to recover.

Moreover, the possibility of serious inflation as the vast amounts of money created by central banks begin to circulate could further exacerbate the situation. If businesses do not fully return to pre-pandemic levels, and if jobless numbers continue to rise, the economic recovery in 2021 could be a harsh reality check. A future marred by continued lockdowns, remote working, and mask-wearing could be quite different from what people are hoping for.

The fear of a Great COVID Depression, worse than the Great Depression of the 1930s, is not an idle speculation. If people and markets lose confidence in the 'rosy future,' the consequences could be catastrophic. Pension funds could follow suit, leading to a severe downturn that would leave many longing for the relative stability and predictability of 2020.