Blain’s Morning Porridge, 22^nd January 2026: What A Disaster – That Was The End Of The American Century

“If you are not at the table, you are on the menu.”

Yesterday was a strategic disaster for America. Trump and his minions have destroyed the alliances that underpinned American exceptionalism. He revealed himself as weak and venal; an old man lost in rambling hatreds. America now faces a scrabble to save face and recover a modicum of respect. The medium-to-long term market implications are huge.

Link to Podcast

Wow. Yesterday in Davos was just horrible to behold.

Yet, all that global markets heard was Trump saying he would not use force to seize Greenland and promptly bounced higher.

Don’t be fooled. That was a knee-jerk reaction, a dead-cat political market bounce. The situation is anything but fixed. What has been said will not be forgotten. The damage to America’s global standing is irreparable while Trump and his ilk run America – and even after it will take time for wounds to heel. The World is changing course, and Trump’s hands are nowhere near the steering wheel. Mark Carney, premier of Canda earlier summed it up: “this is rupture, not a transition.”

I don’t think I am overstating it when I say we might have witnessed an End of Empire moment. Trump visibly lost his audience with a “speech” that degenerated into rambling insults, exaggerations, confabulations, and outright lies. He looked like a drunk uncle doing a bad Don Vito Corleone impression. Doesn’t matter – by then no one was listening. They’d heard enough. Trump was not addressing a crowd of fanatical MAGA fans in a Georgia field – he was ranting at the most influential and powerful people on the planet, and they voted with their feet.

Ultimately, Trump’s performance yesterday may be remembered as the most embarrassing and costly moment in America’s 250-year history.

Standing in the wings was a smiling Chinese chief trade negotiator offering trade deals… which said it all. The Chinese understand geopolitics and how Trump shattering America’s alliances with aligned nations changes the world utterly – and if they play the situation well it opens fantastic new opportunities for Beijing. Every time Trump opens his mouth, Vance frowns, Lutnick insults, or Bessant patronises – the Chinese grin gets wider.

In contrast, doors are closing on America.

Trump has never grasped the reality that it was America’s alliances with aligned democratic states, and their shared consensus and vision on freedom and capitalism, that enabled America to become the exceptional and global hegemon it was, profiting from its close and genuinely respectful relationships. Alliances need to be nurtured, not insulted, but Trump is a small businessman who’d inherited a lot of money who saw the world as transactional – it is not. It is linked by relationships, and Trump has severed America’s!

The key message from Davos this week was not contained in Trump’s rambling bluster, or Lutnick’s fantabulous bragging and insults, but in the more measured acknowledgment the world has changed from calmer leaders. (I am told drink played a role in his comments that caused Christine Lagarde to walk out of speech at the Blackrock dinner on Tuesday)

What does the world really think? Mark Carney told us the rules-based international order has broken down and that the use of tariffs and supply chains as “coercive instruments” is a threat that will not be accepted. Emmanuel Macron was honest about America’s bullying and coercive breaches of the rule of law. Ursula von der Leyen was blunt about the need for Europe to move away from traditional partners (aka the USA), swiftly adapt to geopolitical change, and develop strategic autonomy.

That is the new reality. Coercive behaviour has backfired on America. Collectively Carney, Macron and Der Leyen told us the World has changed and moved on. They blame Trump for fracturing America’s global alliances – and who can blame them given the insults and disrespect. The nations that made America great, are now actively signalling it’s over. It’s disappointing the UK’s Sir Keir Starmer didn’t get off the shelf and give us the long-hoped for speech from Love Actually: “I fear this has become a bad relationship…. A friend who bullies us is no longer a friend. And since bullies only respond to strength, from now onward I will be prepared to be much stronger. And the President should be prepared for that.”

Let’s be brutally frank what TACO Trump actually achieved yesterday:

• Trump has not done a deal on Greenland. He talked with Nato Secretary-General Rutte who opened an off-ramp involving US bases, perhaps with limited sovereignty (like the UK in Cyprus). (This is what Denmark has been reminding the US has been on the table for 75 years!) Trump tried to frame that chat as some form of biggly-big perpetual lease – but no one has asked Greenland or Denmark. There is no deal – and when there is Denmark/Greenland will not accept any US sovereignty, and Europe will back that.
• Trump over-reached himself. He was forced to climb down on Greenland because he stood zero chance of getting it done through force. Concerned Republicans would have spun against him. The Army would have refused an illegal order from the president to invade an ally without the approval of the legislature. (There are rumours Trump gave the order and the Joint-Chiefs said NO.)

A US “chum” called late last night trying to frame Trump’s climbdown as an incredibly smart triumph. He told me Trump was a genius: by focusing everyone on Greenland, he ensured Ukraine’s Zelensky didn’t get airtime and thus he can press on with forcing him to accept Russia’s demands – which is great, as it will mean peace in Europe! I can’t believe some folk are so stupid.

And the series of US miscalculations this week is not over yet. This morning we’ve still got the farce that is Trump’s Peace Board signing to come. (Honestly… who in Congress, the Senate or the Supreme Court, believes it’s OK for the US President to make himself “Chairman for Life” of an invented organisation seeking to undermine the United Nations? Who thinks the list of nations that have grabbed the opportunity to give Trump $1 billion adds lustre to the American Era?)

The thing is: the US economy and markets may be the most vibrant, most inventive, and innovative on the planet, US companies may be worth more than any others, and the US military may be the strongest, but when the myth of American power and exceptionalism is done, and its’ friends and allies have walked away in disgust, then what’s it actually worth?

I guess we will find out.

Yes, the world has changed. A new world order is emerging. America, for all Trump and his minions bluff and bluster, will no longer be at the centre of it. What has happened this week has massive implications for global markets – Trump’s miscalculations accelerating the end of the American age. The decline of the dollar’s exorbitant advantage from trade has massive implications for Treasuries, US rates, the influence and attractiveness of US Equity and as an investment destination.

Some $8-10 trillion of US assets (mainly treasuries) are held abroad. Global investors should weigh up the changing risks for American assets.

• Will foreign nations remain willing to complete the “agreed” trillions of dollars of investments that will be required to rebuild American manufacturing, delivering Trump’s promises? I doubt it.
• Are global investors willing to keep funding the US deficit when an increasingly irrational Trump looks set to destroy the independence of the Fed? I doubt it.
• Are they looking at increasing political risk in the USA given Trump’s bad form in 2020 and his threats towards the coming Mid-Terms? Yes, they are.
• Will increasing domestic instability increase and make America uninvestible? There is a rising possibility it will.

Trump, Lutnick, Bessant and the rest have completely misread the global room – America’s global power and influence visibly shrank as we watched yesterday. Acting a bully has isolated them. There are few signs it will get better. A new world order is emerging, but not the one they expected.

Out of time and back to the day job.

(Porridge will be “occasional” next week.. off skiing.)

Bill Blain

CEO – Windshift Capital

Author – The Morning Porridge

Partner – Shard Capital

Special Advisor – Spitfire Strategic Capital