Blain’s Morning Porridge 20th January 2026: One Year of Trump – The World Has Changed For The Worse
“We didn’t force them. They gave us a mandate, and now their little throats are being cut!”
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.
For a few short days all eyes will be on Davos. The great and the good will be assembled, looking splendidly casual in their multi-dollar winter gear – which will likely never be worn again. The town is full of AI firms offering unlimited riches from harnessing the power of their products and expertise. However, we all know that’s just noise. What we’re really waiting for is to hear what Trump says when he talks tomorrow. He is the Basileus and Autokrator of the World – at least in his own mind.
Today is the one-year anniversary of Trump’s second term. He dominates the flow in a way no one has in my 40 plus career in markets. US Treasury Secretary Scott Bessant asserts Europe will fall into line, and give the President what he wants. European support for America has evaporated. A new poll published in Germany y’day shows less than 17% of Europeans now trust America. Ask why?
American voters adore Trump. He shocks and revolts the rest of the world. Much as all the great and want-to-be dictators have done when they lever self-interest disguised as patriotism against the rest of the world. Last year I tried not to be overly dramatic when I warned Trump would be…. different. When he pushed away the proffered Lincoln Bible and took his oath of office with an empty hand (!), well, that was symbolic.
We thought Trump’s agenda would be about retribution, and the acquisition of wealth and respect. We thought he’d become a blank page for the Libertarian-Right behind Project 25, which would enable the US to move down a completely different path – which he has. But Trump has also become increasingly erratic and attracted towards the power of autocracy. He has betrayed Ukraine, treated America’s enemies as equals, and dismissed his nation’s friends as beggars at his door.
Chaos now follows his every step. We’re beginning to wonder who is pulling the levers, and who has their finger on the stop button. Increasingly the agenda has become one of disruption, distraction and destabilisation – even destruction. That is bound to impact markets – and we’re looking for clues as to who will benefit.
The folk who voted for Trump, the MAGA supporters who believed he would rescue them from being left behind in the poverty of the swamp remain as fiercely loyal as ever, but for all that Trump may talk about jobs, stemming inflation while assuring them affordability is coming… they appear secondary to his own agenda of being the centre of everything and the exercise of power.
For all the noise, markets are still acting like nothing much has really changed. Oh, yes it has. Wake up. The world is not the one it was.
America is a very different place a year after the inauguration. Few in power talk much about checks and balances anymore. The Senate, Congress, and Supreme Court have effectively been silenced and effectively captured. Trump has become exactly what the constitution sought to avoid – the autocrat who does as he pleases. He moved America into a scary place, triggering flashbacks of the 1930s in Europe.
- Who would have believed a year ago we would see “domestic enemies” being removed from the streets by paramilitary thugs wearing the emblems of the state?
- Who ever thought we’d see political opponents, former state agents, law enforcers, and government employees suffering intimidation and legal threats for having done their jobs?
- And who expected the rank corruption and opportunism that characterises the administration? I am told Washington is now a hub of graft as thousands of Trump-Republicans compete in their sycophancy seeking Trump’s preferment, while playing insider information on Polymarket.
Its only 3 weeks since the start of 2026, but the threat of chaotic change has accelerated.
Had a more enlightened Trump pulled off the Maduro president-napping and made normalised demands, then we’d be praising his actions as unusual, debatable, but generally a good thing. It probably was. But he didn’t stop. In the last few days he has then gone to ratchet up the disruption of everything:
- The threat to the independence of the FED with the investigation of Jay Powell – markets were left reeling.
- Telling Iranians “help was on its way”. No, it wasn’t. The Americans were not ready. US carrier groups were in the Caribbean and South Asian seas, and the Qatari’s said no to using their airbase and airspace. (Didn’t Qatar give him the beautiful-biggly-gold jumbo-jet?)
- The threats to Greenland and Denmark have fatally undermined Nato. Breaking the trade agreements with the UK and Europe means a trade war looks inevitable.
- Accepting the real Nobel Prize winners medal, and then the frankly deranged email rant at Norway for not giving him the Prize, says much about his mindset.
- And, in case you missed it, his invitation to world leaders, including such paragons of truth, justice and freedom as Russia and Belarus, to join his Peace Commission for the bargain basement price of $1 bin payable to Trump Industries in Qatar!
The world is holding its breath to hear what he will say at Davos this week… It’s supposed to be about “dialog”. Instead, we will likely be treated to yet another stream of narcissistic consciousness of the ugliest possible kind – and the posse of adulatory Trump-whisperers that guide and enable him will praise his empty wisdom to the rafters.
But the world is waking up. We don’t stand in Awe of Trump anymore. There will be increasing pushback – and American’s will wonder why they are friendless. There will likely be challenges to trade war escalations, in the hope saner voices in US industry will prevail. Domestically, there will be increasing unrest, crisis and polarisation in US cities – which may be what Trump wants so he can claim the Midterms are unsafe and likely to be stolen. Tell a lie, tell a big one and tell it often – and pray it is never caught.
Some say people in glasshouses should not throw stones, but credit to President Macron of France for refusing the offer of paying Trump to join the Peace Commission – he sees it for what it is… Trump’s ego wanting his own UN after the insult of a lift breaking down on him last year.
Macron has threatened to put EU sanctions on US goods in Europe. Others will follow. Starmer, God bless his little cotton socks, is one of few European leaders still seriously arguing for a calm response. If Tony Blair had an erg of decency – which could be one of last unexplored places on Earth – then he would walk away from Trump and argue that Palestine and Isreal should be represented in solving their common problems.
There are multiple things happening here, and unless America wakes up…. they will be bad.
- We are in a period of hegemonic global change. China now outcompetes the West and is probably more powerful militarily in terms of being able to defeat US power projection – taking out carrier task forces with hypersonic and ballistic missiles.
- China controls global supply chains of critical materials – particularly rare earths. There are plenty of these – it’s the processing that’s the problem, and it will take a decade before the USA can catch up. That means the massive build up of AI infrastructure and the power that will be needed to drive it is not going to happen if the Chinese decide to fight Trump’s fire with fire and trade sanctions. Without the expectation of AI driving the US economy…. US markets will tumble and a Treasury market crisis.
- Europe is the key – not the problem. If Europe was to act in a Europe First manner, then we would be in Beijing now doing a deal to secure China’s support, trade agreements, supply chain certainty, and opening European and Southeast Asian markets to a new co-prosperity sphere, inviting the Middle East and Lat Am to participate. In return China would rein back Russia. And if Europe and Asia dump US assets… well where does that end?
As we are all aware, Europe is deeply divided. It is impossible to herd 27 monkeys, let along 27 very different nations.. but such is the fundamental threat Trump now has raised… it will likely happen. For 10-years Europe will struggle to evolve into a closer to unified power. In the short-term we may have little choice but to do the deal with China, but in the long-term, making the right choices in Europe’s interests now will be more positive than trying to anticipate Trump.
I’ll leave the final word to Randy Newman from way back in 1972 – Political Science
Out of time, and back to the day-job…
Bill Blain
CEO – Windshift Capital
Author – The Morning Porridge
Partner – Shard Capital
Special Advisor – Spitfire Strategic Capital
13 Comments
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Dear Bill,
With all due respect, if Europe was to act in a Europe first manner the first thing it would do would be to pay for the repairs to Nordstream’s 1 and 2 in double quick time and make a deal with Russia for cheap energy.
Step 2 would be to agree a comprehensive security agreement with a Russia that doesn’t want to invade (despite all the propaganda hoopla) that could still lead to a reduction in defence spending. Unless of course you really do think that we need to arm ourselves to protect us from “Daddy”?
Anything else is just re-arranging the deckchairs on the Titanic as Europe spending all its treasure on American weapons whilst powered by American LNG is going bankrupt very fast.
I will disagree to a point. We need energy security, but no matter what we think we have in terms of an agreement with Putin, Russia could never be trusted. Better had we enabled Ukraine to destroy Russia on the battlefield – as Biden could have done (and Trump still could) by properly arming Ukraine.
A deal with China will be dangerous – but ultimately China needs trade to sustain the Iron RIcebowl compact.
Is it time for UK to drop First Past the Post method?
Why? Coalition governments are weak – and involve Liberal Democrats who are very, very nice people and therefore, defitionally, should not be allowed in Government.
Correction: Not all American voters adore Trump. He is loathed by about a third of the country and disliked by another third.
We feel your pain.
Well said. I didn’t like him 15 years ago when he still professed to be a Democrat.
I remember being in NY in the early 1990s and reading about him and on TV and thinking what kind of country considers folk like that praiseworthy.
“Europe is the key – not the problem. If Europe was to act in a Europe First manner, then we would be in Beijing now doing a deal to secure China’s support, trade agreements, supply chain certainty, and opening European and Southeast Asian markets to a new co-prosperity sphere, inviting the Middle East and Lat Am to participate. In return China would rein back Russia. And if Europe and Asia dump US assets… well where does that end?”
Exactly this. This is what will happen; but maybe a little slower than we expect, because, after all, it’s not easy herding 27 cats in one direction at the same time.
Maybe, back in 2016, there were reasonable arguments for Brexit. But the last ten years have happened, and now it’s crystal clear it was a horrendous mistake. Back to Europe with our tail between our legs is our only option.
American voters do not adore Trump; It’s the MAGA(t) cult who does. But yet he sold (er, conned) half the electorate on the notion that he was a better alternative than a mediocre democrat and won the popular vote by 1.5 %.
When the fireworks went off in our neighborhood late on election night we were sickened.
Many of us abhor him and are frightened of what he’s turning our country into, both domestically and on the world stage.
There have been so many opportunities for our country to check his power since Jan 6th, and yet here we are.
I’d love to hear your views on what appears to be a Japanese bond market meltdown and what it means for Sanae Truss-ichi.
A topic for later this week.. .
Boom goes London
Boom Paree…….
Frightengly prophetic….