Before Covid-19, there were black swans – unknown unknowns – and white ones, or predictable financial crises.

Not too long ago, economics professor Nouriel Roubini laid out the “white swans” of 2020, which is to say predictable financial crises that occur because vulnerabilities are not addressed.

The professor’s list, briefly summarised, contained six, non-Coronavirus white swans.

They could still happen, post-coronavirus.

  1. Escalating strategic rivalry between the US and China, Russia, Iran and North Korea in a US presidential election year. The white swan is the possibility that the US election descends into partisan rancour, chaos, disputed vote tallies, and accusations of “rigged” elections because this would weaken American power abroad.
  2. The first-ever cyber world war with more US cyberattacks against China, Russia, Iran and North Korea.
  3. War between the US and Iran. The regime in Teheran is said to have “perverse incentives” to go to war, namely soaring oil prices, the crash of the US stock market, a recession and the end of Donald Trump’s prospects for re-election.
  4. A sharp escalation in the Sino-American cold war over technology, data, investment, currency, and finance. Many say that a beleaguered China could use cyberwarfare. Likely targets include the US election and US and western financial systems, including the Society for Worldwide Interbank Financial Telecommunication (SWIFT) platform.
  5. A hot Sino-American conflict by 2021 in the sense that Beijing will be dealing with Taiwan, Hong Kong, Vietnam, and US naval positions in the East and South China Seas, which could lead to “escalating military accidents”.
  6. China sells US Treasury bonds in fear that these assets could be frozen through US sanctions. This is, of course, a financial “nuclear option”. However, China could decide to diversify its reserves by converting them into another asset, such as gold. That would be less vulnerable to US primary or secondary sanctions. It’s worth noting that both China and Russia have been stockpiling gold reserves in the past couple years.

Of course, the most glittering white swans of them all include the risks associated with climate change and environmental disasters.

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