Something different for Morning Porridge Readers this morning, a guest post from my chum David Murrin.

The end of the exceptional American Century is happening faster than we think. America is dispensing with friends and allies, and American Tech leadership is no longer unquestioned. It spells rising instability and threats. Defence has never been more critical as Europe seeks to define its future.

King Charles played a blinder in Windsor last night, making Trump feel regal. But the reality is Europe and the UK have difficult decisions to make. Do they remain aligned with a post-hegemonic USA slipping into autocratic polarisation, or do they seek closer Asian connections, including China? There are massive Economic and Geopolitical risks ahead.

Yesterday tremblors rocked global markets again after Israel bombed Qatar and Trump demanded Europe enact 100% tariffs on China and India. As America lashes out, It feels the world is tumbling towards chronic trade conflict and disruption – yet, yesterday the US stock market made yet another record high.

Everyone knows Europe is finished. Over-regulation, bureaucracy, a demographic bust, dusty old industries and the prospect of slow lingering decline.. Nonsense. The Sun may shortly rise on new prospects and growth as geopolitics and new trade develops. Might be time for the great rotation back across The Pond.

The UK’s Torygraph Newspaper excelled itself over the weekend, publishing claims the UK is bust and seeking an IMF bailout. Their readership loved it as proof positive the UK is doomed and how terrible the new government is. It undermined the Gilts market, and raised substantial global investor fears over the investibility of the UK. The story was utterly unfounded.

The last 6 months has been….. interesting. The world has been shaken, stirred, and left confused, uncertain and destablised. Fantastic. Big shocks create massive opportunities. The issue for markets is understanding why, where and what they are!

Global Trade is not just about governments and tariffs. Its about what individuals want to buy and how businesses set about selling their products. How these micro components of the global economy are responding to the “challenges” of Trump v.2 will determine the future.

Lots of stuff going on this week! Top of the list is how hard-line Republican Hawks in Washington have reset Trump’s Big, Beautiful Bill. Don’t make him angry… We also have the UK doing a deal with Europe. And, Mark Blyth gives a masterclass in how we should think about inflation.

The UK faces a tough choice: a trade deal with the US or re-engagement with Europe. In Trump world these are mutually exclusive outcomes. Trump wants to boast about the trade deals he’s signing. Its time the Sir Keir Starmer got a bit UK First in how we respond. Too many strings could be attached to a US deal.