Blain’s Morning Porridge – March 10th 2025: The USA just “Jumped the Shark” – Time to rethink the future
“Trying to make some sense of it all, but I can see it makes no sense at all.”
When future economic historians try to figure out the pivotal moment in the Decline and Fail of the American Century, its likely last week will figure in their thinking. Trump’s actions will have profound implications for bond and tech markets – and the time to start building these consequences into portfolios is NOW!
It’s clear I just missed one of the most significant weeks in history – when Donald Trump’s America “Jumped the Shark”. Sure, when he won the election we expected shocks… but now we know…
As a result, the global economic picture and outlook has changed, and changed utterly, triggering enormous consequences for markets and the opportunities they present. Don’t expect complete overnight market dislocation and exits, but within the next five-t0-ten years global trade and market flows will be on a very different path to what might have been. Its time to place new bets on the table on how global markers evolve around these new realities and the Trump noise.
(For readers left wondering about “Jump the Shark”, it’s a phrase from the entertainment industry. It sums up a moment when confidence suddenly shatters in a reliable TV’s show’s popularity. Its stems from the moment nearly 50 years ago when the lead character in “Happy Days”, The Fonz, jumps over a shark while water skiing (around the time of the Jaws movies). After that folk just kind of gave up on the show. Now we know just what Trump is, and how the USA is likely to operate in coming years, I reckon global markets will lose faith in the myth of US exceptionalism, and look elsewhere as the last quarter-century of American dominance fades from memory.)
Following last weeks’ sturm-und-drang, there are multiple potential scenarios that may play out. There will be winners and losers – and not just the obvious ones. My own guess is the long-term outlook/path to how the world may look over the next 10-years as a result of current events might be:
- The USA’s decline will accelerate. It will find itself isolated after squandering soft-power and global influence, unable to significantly cut spending, impacting global demand for Treasuries, reducing the pivotal role of the US dollar across global trade (causing massive domestic financial crises), even as the US lead in Tech innovation moves to Europe/Asia as leading young minds chose to take their skills elsewhere.
- China will benefit – seeing nations seek new trade security by embracing versions of the Belt-and-Road economy, accepting a refined non-dollar BRICS reserve system, and a sense of greater political predictability under Xi and his successors. It will create wealth across Asia and the Middle East. It may not need to embark on any military “adventures” if the USA continues to beat itself.
- Europe will struggle to pay the costs of rearmament vs welfare (the old guns vs butter arguments), while stemming off deep debt-led financial crises even as it learns to become a more effective unitary power. (There will be a fascinating power-play between ECB, Brussels and States.) It will emerge politically neutral but aligned in trade with the emerging Middle-Sea/Asia international economy as China becomes the next global hegemon.
I missed the last week in markets as I spent the last 10 days skiing on the Italian side of Monte Bianco. On the lifts, over lunch and dinner with friends, we tried to make sense of the noise from Washington – the disgusting Trump/Vance ambush of Zelensky, the attempted extorsion of Ukraine’s commodity wealth, the on/off tariffs, markets losing faith in the Trump rally, and a growing realisation of just how much all the conventional wisdoms were being unravelled. In the evenings, I worked my phones. On calls with US clients (many Trump supporters), some tried to explain how the US owing 50% of Ukraine’s mineral reserves was better than the promise of “boots on the ground”, or that it was simply a form of WW2 “Lend Lease”. I was told Trump was a catalyst to a stronger Europe (yes, he is..) One Republican send me a missive justifying why the Trump/Vance/Musk clown show was a “good week for NATO”.
As I flew home yesterday; Ukraine had been denied US intel, its defences effectively “switched off” by Washington, battered by renewed Russian missile offensives and encircled at Kursk. History will not record a Russian victory, but how Trump and America betrayed the people of Ukraine, and sold them down the river.
Perhaps the most dispiriting thing I’ve read over the last few days was a quote from a Woman in Texas in a story about Trump’s ongoing solid domestic support: “He’s great. He’s doing all the right things… It hasn’t really affected me.”
It will.
History remembers villains. They are caught out in life or death. From Roman emperors to Mussolini strung up by his feet over a balcony, the Ceausescu’s against the wall, Gaddafi shot in a ditch, or Stalin’s great state funeral – before the truth of his multiple mistakes in WW2 and cult saw his body removed from Red Square and dumped. History has a way of revealing truths and mistakes. When Trump is gone, I can’t wait to hear the excuses his supporters trot out to excuse their current acquiescence to his destruction of US soft-power and his connivance with Putin. Will anyone care to listen?
However, let’s not get overly emotional at the loss of America. Let’s try to strip out the noise, the beastliness, the stupidity, and think it all through to get a sense of what Trump thinks he can achieve. Without the benefit of understanding the mindset of Trump, nor those who advise him, I reckon their global plan is all about Energy: Nations with Energy succeed where those without fail. I think that is clearly understood in the White House. The future of the global economy will be about which nations control access to, and the distribution of Energy.
The US, Russia and the Gulf are the world’s current critical energy producers. The Trump Regime wants to ensure the US sits at centre of that global energy nexus, and run it for US national advantage. To do so they need both Russia and the Gulf States clearly aligned with US interests. Trump believes his good friend in Russia and the Gulf will align with him – because he can do “deals”. The art of the Trump deal means giving them preference over previous alliances – and hence the deliberate unravelling of the NATO Western Alliance. (The news that US energy firms are trying to buy the NordSteam 2 gas pipeline from Russia to Europe to control and profit from future European energy fits this scenario.)
If that’s the New-US plan, the assumption is it will leave Energy-poor Europe struggling, while dictating energy prices to China/India. In such a new strategic picture, the old alliance of the USA and Europe simply doesn’t matter, except that the New-US will be making money from their Energy needs. Europe becomes “useless mouths” – costly in terms of US defence spending and troublesome meddlers in US strategic thinking. It was clearly iterated in JD Vance’s comments about “random countries that haven’t fought wars”. (Oh, yes we have.. Remind me why is the White House is white?)
If that is Trump’s plan; achieving US dominance over global fossil fuel energy supplies, then it will ultimately fail. The Chinese will find ready markets for renewable wind and solar products, while the French had a nuclear Fusion reaction up and running for 22 minutes recently.
The bottom line is despite the Trump noise and our growing distrust of America, markets will continue. Over the next few months we’ll have plenty to do in terms of shifting portfolios towards the nations likely to thrive, and those likely to stumble. My guess, at present, is the US is on course for ultimate disaster, so time to dump long-term Treasuries before everyone else realises it.
Out of time, and back to the day job…
Bill Blain
Author the Morning Porridge
Founder Windshift Capital
Partner Shard Capital
