Markets aren’t much concerned about Iran. US Military might is expected to prevail, cowing the Ayatollahs into acceptance of Trump’s maximalist demands. What could possibly go wrong? Trump is no student of history, and may not understand the gamut of military, logistical and geopolitical risks aligned against him.

The difference between successful democratic economies and autocracy is that the rule of law works better. Autocracies trend towards corruption and inefficiency. Insider dealing and corruption is a fact of the financial markets – punishing it is a matter of the enforcement of justice and the willingness to do so. Europe is acting over Epstein. What’s happening in the USA? 

Sometimes you have to laugh. Tariffs have been the cornerstone of Trump’s economic miracle, allowing him to deflect, discombobulate and distract voters from economic truths. Now the NY Fed says tariffs are a consumption tax – even MAGA voters will be worried as the Mid-Terms approach.

The future will be set not just by the defence and deterrence discussions last weekend in Munich, but by how global markets react to competition. New Chinese AI drops from DeepSeek and Qwen may challenge US hyperscalers and challenge expectations of global demand and markets.  

There are times when the course of history takes on a momentum of its own, most often in periods of conflict around hegemonic change – as exist today. This year’s Munich Security Conference will address stressed and fractured global alliances – while markets should be figuring out how conflict risks have risen and potential outcomes worsened.

The threat board is looking crowded this morning. From UK political risk, escalating conflict risks, a possible credit burp and what happens next in unsustainable narratives – who knows what further No-See-Ums lurk in the background. Yet markets party on. What can possibly go wrong…..?

Gold surges through $5000 and markets remain distracted by the sturm et drang of words and events. The world is changing – but are we thinking about all the wrong things? The real issue for the future may be investment choices between authoritarian states vs nimble democratic nations.

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.

Trump dominates the headlines but watch what’s happening in the bond markets. Yesterday Japan bond yields juddered a warning about political competency risks, but also how rising geopolitical and conflict risks are resetting investor expectations. When the bond market speaks, you ought to listen. Plus, Air Force One, Bitcoin and Howard Lutnick.

It’s one year since Trump took office for a second time. It’s been dramatic. It’s been eventful – and it’s been destructive and destabilising. The winners are Putin and Xi. The losers are the West. But have we now reached peak-Trump? Europe is the key – the continent has to wake up to the coming opportunities.