7 Questions and hypotheses for 2021

2020 was certainly a roller coaster for a social scientist, full of surprises. Let me not once again bemoan the increasingly coordinated attack on all sources of vitality in Western civilisation, but look ahead and openly wonder about what 2021 will bring in terms of 7 specific questions.

  1. Will China impose tariffs on Australian iron ore by the end of 2021?
  2. Will face masks be compulsory anywhere in the West by the end of 2021?
  3. Will the Scottish parliament in 2021 vote for another independence vote?
  4. Will sports stadiums be restricted to be less full than before anywhere in the West by by the end of 2021?
  5. Will any of the top 10 US Big Tech firms be broken up by the government in 2021?
  6. Will there be a civil war anywhere in the world with more than 1 million deaths in 2021?
  7. Will Australia have abandoned any quarantine requirements for all foreign flights by end 2021?

Over the fold I explain the major developments each of these questions relates to and where I think the balance of probabilities lies on each of them

Will China impose tariffs on Australian iron ore?

This of course goes to the question of the decoupling between the Australian economy and China, which now seems a near certainty in the medium run (5-10 years). The specific question basically goes to the question how quick the decoupling will happen: iron ore is the single biggest main export earner of Australia and something like 80% of it goes to China, making up almost 60% of all exported iron ore in the world. China basically would not be able to source so much iron ore elsewhere by end 2021, certainly not as the expected world economic recovery will mean increased demand. In such a situation, tariffs would only hurt domestic Chinese iron ore users. So the economics of the situation would lead one to say ‘no’, but the politics of course goes the other direction as the imperatives in Australia will be to heat up the dispute with China, thus leading to a ‘yes’. On the balance of probabilities, I am going to say ‘yes’, but it is a very close call and I don’t expect a high tariff, more a symbolic tariff meant to encourage Chinese businesses to find alternative suppliers.

 

Will face masks be compulsory anywhere in the West by the end of 2021?

This goes to the question of the degree to which the covid-policies will be wound back in 2021. By that time the entire population of the West can be vaccinated, though that is unlikely to mean the end of waves of corona(or other similar viruses) sweeping through the populations, as they have done for generations. So the real question is whether some degree of the madness of 2020 will still be there end of 2021, egged on by a medical-industrial complex that benefits from it. I am going to say ‘yes, somewhere in the West’, though for the UK expect it to be ‘no’.

 

Will the Scottish parliament in 2021 vote for another independence vote?

This is a Brexit-related question. In the current deal, Northern Ireland has, in an economic sense, left the UK and is now part of the EU. The Scottish nationalists will no doubt use that reality to say that they too should now be independent, particularly as the Brexit deal almost guarantees continued problems with exports to the EU if Scotland was to remain in the UK. The political question is whether the pressure is enough in Scotland for the parliament to vote to have another referendum. Since the Scottish economy has been particularly badly hit by the disastrous choices of its own government and that of the UK, I am guessing it will want to have a big distraction. So I am going to say ‘yes’, but again it’s a close call.

 

Will sports stadiums be restricted to be less full than before anywhere in the West by end 2021?

This is of course another question on the speed of normalisation in the post-covid world. Since sports stadiums pack tens of thousands of individuals they are a prime place for the spread of infectious diseases and thus a key industry for the medical panic mongers to point to. On the other hand, top sports is big business that is very popular, so whether they will remain forced to have few attendees will be a question of political pressures. On balance, I think that in quite a few countries in the West stadiums will still be heavily restricted by the end of 2021.

 

Will any of the top 10 US Big Tech firms be broken up by the government in 2021?

This goes to the reality that Big Tech is killing off small and medium sized businesses everywhere in the world, but particularly in the US where there is hence a lot of political pressure to break up some of the biggest firms, essentially along the lines of the break-up of Standard Oil in 1911. In terms of the economic merits, I think the US would be better off breaking up some of these firms, but politically I look at team Biden where you see lots of Big Tech executives, so I do not think it is going to happen. Big Tech now is an integral part of the US government.

 

Will there be a civil war anywhere in the world with more than 1 million deaths in 2021?

This goes to the question how much social pressure has been created by the covid-mania of 2020. Given the widespread impoverishment in many parts of the world, the break-down of education and health services, I am reasonably confidant there are going to be quite a few civil wars heating up. The question is though whether those are going to be bad enough to lead to a million deaths, which is a number one can only envisage in places like India, Nigeria, Egypt, and other big countries. Perhaps Afghanistan. Whilst I do think there will be some nasty conflicts breaking out, a million deaths in one country in one year is a lot, so I am going to say ‘no’.

 

Will Australia have abandoned any quarantine requirements for all foreign flights by end 2021?

This goes to the question of normalisation in Australia, a country that is extremely dependent on open borders. The quarantine policies have been extremely costly to the Australian economy and its social fabric, killing off tourism, international students, family visits, business travel, skilled migration, etc. The federal government will be desperate to re-start as much of that as possible, but of course the covid-maniacs will want to exert as much control as possible and thus loudly call for remaining quarantine rules, not merely on people who are sick but on anyone. I am going to guess the covid-maniacs will get their way and that there will thus remain blanket quarantine rules, though only for arrivals from particular countries.

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20 Responses to 7 Questions and hypotheses for 2021

  1. Conrad says:

    I think I am in agreement with you on all of these, although I think (1) is less likely to happen under the possibly too optimistic scenario that Xi Jin Ping is really not that foolish. There are in fact weak calls in Australia to put a tariff on iron-ore to China, which might not be a bad thing (the Australian dollar is going up too quickly now), although I assume the chance of that is close to zero.

    If you want wars and not civil wars, Yemen might get there as a relatively small country (30 million) if you count all types of death caused by their current war even from destruction caused in 2021. Not that anyone is going to count anything there.

  2. hc says:

    Conrad, I think you mean that Australia might possibly impose an export tax.

  3. Nicholas Gruen says:

    If the Chinese wanted to further punish Australia, wouldn’t it prefer to impose its own administrative restrictions with all the flexibility and deniability it gives them compared to a tarrif.

    Does the WTO not give us some (admittedly imperfect) options against a tariff?

    • paul frijters says:

      well, they have put tariffs on lots of other commodities so they have already shown they dont care about deniability or the WTO. Australia has started a WTO dispute about barley tariffs, but don’t hold you breath.

      • I am and will always be Not Trampis says:

        Then why have they referred the USA to the WTO?

        The Chinese need the WTO as they are a major trader unlike the yanks and Trump simply has no understanding of the benefits of a rules based trading system. Might is right is his philosophy.
        Couple this with the almighty failure of wolf warrior diplomacy and unless the Chinese are Trumpists they should change after of course saying it was all a great success

  4. I am and will always be Not Trampis says:

    Nick is spot on however given their own goal on coal I very much doubt they will do anything to iron ore. Their foreign minister is making the right noises now

    face masks will be made compulsory if covid spreads very fast anywhere if governments are rational however my guess is the vaccines will obviate this need. Given covid spreading quickly ie more likely in the winter seasons more so in Europe where you have to be indoors.

    I don’t think what happens in the Scottish parliament is important but rather the UK parliament. I doubt if the problems of Brexit appear that quickly this year.

    Until a successful vaccine full stadiums are super spreaders. A bit stupid to attempt this. Most fans would stay away in Europe. The USA is a different matter as it has become a political football.

    Governments will attempt this but will they be successful? history says no.

    There will be civil wars whether a million deaths occur is irrelevant. One death is bad enough.

    Possibly too early to abandon quarantine but who knows. Australia will be top of the pops to visit because we had a very successful lockdown. If you are an aspiring student where would you want to study, the UK, The USA or here.

  5. derrida derider says:

    I reckon you’re way off beam with several of these.

    – What Nicholas said about China. They surely will merely have quality concerns, or face port delays, or discover some ships are unseaworthy, or misplace approval paperwork, or have a corruption scandal that means some assets must unfortunately be frozen while they investigate, or decide contract negotiations really do need an awful lot of time.

    – I won’t mince words here (after all, you don’t). This stuff about “the medical-industrial complex” is ridiculous. It really makes you sound like those climate change deniers who claim it’s all a conspiracy by scientists to get research grants. At this rate we’ll soon see you in the ranks of the anti-vaxxers (“vaccines are not cost effective and are dreadful overreach by government”).

    I’d guess that by end 2021 though the pandemic is over thanks to the vaccines. Masks no longer compulsory, though I can see western societies adopting the Asian custom of wearing a mask when out and about with a cold or flu. We’ll all be more careful of spreading coughs and sniffles than we were but I think that comes under the heading of “silver lining” to the pandemic cloud.

    – A binding Scottish referendum needs the Westminster parliament’s approval and hell will freeze over before this one will approve. Scots independence will come – it makes too much sense for them – but not in 2021.

    – by end 2021 there’ll still be international quarantines while the tail end of the pandemic is being cleared, but it will be pretty well gone a few months after that. Most sports, concerts etc will be back to normal, although as I said most people will voluntarily be more careful about hand washing, coughing on strangers, etc than they used to be.

    • paul frijters says:

      on the scottish referendum, the post does not talk about whether there will be a binding one, only whether the Scottish parliament will vote for one. You should learn how to read more carefully.
      On quarantines I dont see where you differ from my prediction since you agree with it.
      On the medical-industrial complex, it is like with the military industrial complex. Some see the influence clearly, some dont see it at all. The interesting thing about these lobby complexes is that they are highly visible. One can name the companies involved and how they operate. Precisely by calling it a complex one makes clear one is not presuming they coordinate all they do.
      On China, sure there are other ways trade can be frustrated. However, it is too easy to predict trade will be frustrated ‘somehow’ because that is the kind of statement that cannot be falsified (whocan tell the difference between normal boat inspections and abnormal ones?). Its only interesting if one makes these questions specific to something that can be verified. So you dont say whether you disagree.

      How about some more concrete predictions from yourself for 2021?

  6. ianl says:

    1) Iron ore exports to China:
    the Congolese Govt has already revoked several iron ore mining leases from Aus companies and re-attributed them to JV’s with Chinese enterprises. These deposits will take several years to develop into operating mines – and can the Congolese Govt be trusted ?
    Quality of ore is a factor but the Chinese are technically capable of dealing with that.
    Not noted in the thread here is the concomitant requirement for high quality coking coal – the Bowen Basin deposits are world benchmarks and so far China has not seriously tampered with the flow of this commodity, unlike its’ thermal imports.
    The Congo deposits are but one example of China’s intention to displace a single supplier.
    2022/3 will see the brown stuff hit the rotator in regard to iron ore. JobKeeper quo vadis ? Of course it won’t be turned off in March, although perhaps reduced some. The State Premiers will not allow that as it will seriously damage their ability to turn economic activity on and off at whim.

    2) Face mask hysteria:
    so far, the vaccines that are being hyped into prominence actually do very little that we can discern from public data. Even the smug Fauci says this.
    I’ve pointed this out a few times – the mesh size of the N95 masks is about 300 nm while the size range of C-19 active virions and the droplets they ride on is 20-100 nm. Catching goldfish with a tennis net is easier. “Not for viral control” is stamped on the box by the manufacturer.
    None of that will dent the hysteria.
    Of course “masks to protect other people” plus continued quarantine for overseas travel (with limited and very expensive plane seats) will remain. The MSM campaign of deliberate fear mongering will ensure it and thuggish police will enforce it.

    2021 is likely to be as grey as one may imagine. From the tone of several comments above, some people, perhaps quite a few, disagree – but only with arm waving hyperbole.

    • paul frijters says:

      Hi Ianl,

      you paint a very bleak picture. I fear you may be right but I am an eternal optimist. I know Derrida.
      Thanks for the stuff on iron ore. I knew there was a lot of further background on which I knew a bit, but now I know more! Just as the Chinese can find new suppliers though, the Australian miners can find new clients and if both sides have a few years, then it might not be that bad.

      • I’ll predict that ,Regardless of how effective or how necessary , vaccines will give the worlds leaders a way to escape the mess without loss of face.

        BTW it is intriguing that China ,about 1 billion people has only recorded about 5,000 covid deaths. Even allowing for the CCPs control of media etc it’s clear that the average persons day to day life in China is currently nothing like what it’s like in the UK.

      • Paul in the case of the Spanish flu or the bad flu pandemics of the late fifties did we also see big longish term variations in death rates between neighbouring countries such as Belgium and the Netherlands ?, or big variations between the death rates across the world?

      • ianl says:

        Thanks Paul.

        Just background – I’m a semi-retired geoscientist with about 45 years at it, wearily world-wide.

        The underlying point to the Chinese iron ore issue, one that is unappreciated by a very large segment of the Aus population, is that of scale. Glibly assuming that Aus miners will find other markets to sell into avoids this issue by default. The Chinese market is gigantic and they are indeed busy sourcing supply from elsewheres, including funding from grass roots exploration to operating mines.

        I did note the coking coal issue as well. Again, not appreciated much in Aus, possibly because coal is now a “four letter word” (always was, of course). Chinese coal deposits are overwhemingly of thermal quality (with a big range) but very little coking coal – and I mean very little. I was part of a small team on a due diligence for a small coking coal mine in north-west China, hours west of Urumqi, close enough to the Kazakhstan border (so way out in the sticks). The deposit was of quite good coking quality but not large, and the “owner” wanted to raise capital on the Hong Kong stock market for further development.

        Nope … even that small coking deposit belonged to Beijing. A force of over 8,000 PLA soldiers had turned up to secure ownership. Apparently they had then become so bored, the PLA started its’ own little open cut operation in the area.

  7. Jerry Roberts says:

    As one who watches with the naked eye the iron ore trains snaking into Port Hedland and the ships taking it away, I have been surprised by the strength of the trade throughout a period of world economic down-turn. Like many locals, I concluded that China was stockpiling iron ore in preparation for recession or war. Australian finance writer Ian Verrender says the Chinese have maintained steel production to stimulate their economy. The price is sky-high and the miners are making hay while he sun shines.

    As a teenage boy I worked as a labourer to construct the port of Dampier to export iron ore from the great deposit at Mount Tom Price. The project came together in a year from a meccano set on the ground when I arrived to official opening with VIPs wearing bright-coloured silky dressing gowns to keep the red dust off their suits.

    It will not take long for China to develop alternative sources of iron ore. Australia is living on borrowed time. I agree with Paul on the decoupling from China proceeding in the decade ahead. We can speculate on China’s thinking but it does appear to be aimed at the American alliance. Appeasement has a bad name in politics after Munich and I do not see either Liberal or Labor leaders kowtowing to China’s 14 grievances. The symbolic tariff suggested by Paul is a possibility but the main game is alternative source. Australia has a lot of thinking to do. I hope we can do it in open forum.

    • paul frijters says:

      yep, all agreed. The main game in iron ore and many other commodities is to find different trading partners. In general, it takes time in market economies to switch partners, but you’d think a few years should be enough.

  8. I am and will always be Not Trampis says:

    when purchasing a product you examine the price, quality and reliability of the supplier.

    We have all those in spades. would any rational player make the Congo their main supplier?
    some people are mistaking the current wolf warrior diplomacy as anything but a short term political play. However it does make trading with China quite unreliable for the medium term.

    what happens in Northern Ireland is far more interesting than Scotland.

    given it is medical specialists advocating the wearing of masks and they are not part of the medical industrial complex the reasoning is quite specious. Are those who advocate condoms part of this grand conspiracy as well?

  9. Jerry Roberts says:

    That is precisely the point , Trampis. Australian primary producers take pride in their ability to export large quantities of good quality food, fibre and minerals to world markets at competitive prices. On top of that we advertise our stable politics, civilised health care and comprehensive education system. On top of that, China has equity in our major projects and in farms and firms.

    All of this is over-ruled as China stomps down a heavy boot on Australian interests. It could be just a short-term bluff, as you suggest, to see if Australia will all of a sudden stop sucking up to Uncle Sam and suck up to Uncle Xi. It could be medium term (5-10 years) as suggested by Paul, with whom I agree, as usual.

    In the other hand, it could be long-term. When French and Italian vineyards are a swift train trip away on the New Silk Road, Europe can easily send in enough booze to have a billion Chinese grinning from ear to there for evermore. Australia needs to professionalise its export marketing along the lines suggested by the eight former Trade Commissioners whose letter to The Australian newspaper was published on 18 December.

  10. I am and will always be Not Trampis says:

    so if anyone thinks China will do this over the medium to long term then they are assuming China has turned trumpian and will cut off its nose to spite its face.
    It also means China will take a lot longer to overtake the USA.

    Given their Foreign Minister’s recent overtures it appears China understands this.
    Just remember China needs a rules based trading system to prosper and to become the major super power in the world.

  11. Jerry Roberts says:

    We shall see, Trampis. So far, politics is beating economics. As the Trade Commissioners said in their letter, we have put too many eggs in the Chinese basket. I have not heard any mention of wool. After iron ore and coal, that would be the biggest blow.

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