Power Pays? Trump’s $18.6B NATO Squeeze. And From MAGA to MALA? China’s Hidden Economic Heft. Bonus Maudlin Birthday Reflections! ?? Plus more! #244

Grüezi!

• ?? European powers pledge $18.6 billion in defence spending – is Trump’s rhetoric getting results?
• ?? China’s real economy might be bigger than we think – the shocking numbers behind the world’s manufacturing powerhouse.
• ???? From maltings to memories: A personal reflection on 60 years watching Great Yarmouth’s decline and Britain’s slide down the razor-blade of relevance.

1?? The $18.6B Question

Is Trump’s NATO Pressure Actually Working?

Another week, another few logs thrown on the diplomacy dumpster-fire. The FT’s Martin Wolf declared ‘The US is now the enemy of the West.’

Some cynics – known in international relations circles as ‘realists’ – have been arguing that it’s just a play to get NATO allies reaching for their wallets. Is this really a case of gloves-off negotiating closing another deal? Let’s dive in.

Since 20 January, five key European powers have pledged an extra $18.6 billion for defence. The UK’s throwing in $8.26 billion (a 10.3% increase), Germany’s adding $5.4 billion (9.6%), Poland’s contributing $2.48 billion (5.3%), while France and Italy are offering more modest 2.5% bumps.

On the surface, that looks like a quick win for Trump’s uncertainty strategy. His NATO playbook has been textbook Trump:

• voting with Russia at the UN,
• hinting that Article 5 might be optional,
• and demanding an eye-watering 5% GDP spending target at Davos.

When he mused about letting Russia “do whatever the hell they want” to allies not “paying their bills,” European defence ministers sprinted to their spreadsheets.

But hang on – there’s more to this story.

Some stuff was already happening. NATO’s 2% club grew from just 6 members in 2014 to 23 by 2024. Poland was already spending 4.7% of GDP before Trump’s return. Germany had its €100 billion special fund in place. The primary catalyst? Russia's invasion of Ukraine, not tweets and tantrums.

Timing matters, though. The UK’s announcement came pretty transparently just before Keir Starmer’s Washington trip. Germany’s jump directly addresses a gap Trump’s been hammering since 2017. About half the $18.6 billion is genuinely Trump-accelerated.

The Draghi Effect

Breaking diplomatic rules has unintended consequences though. Trump’s pressure might be accidentally turbocharging Mario Draghi’s stalled industrial strategy for Europe.

The evidence? European markets are buzzing – the Euro Stoxx 50 is up 12% since the US election, compared to just 3.5% for the S&P 500. Defence contractors like Rheinmetall, Leonardo, and Thales are seeing share prices take off in 2025.

Draghi’s September 2024 report highlighted Europe’s embarrassingly fragmented defence sector, which supplied only 22% of its needs in 2022-2023. Trump’s threats are now creating the political will to finally address this – potentially unlocking far more value than the immediate $18.6 billion.

The EU’s 14 February fiscal rule change (which started percolating before Trump’s inauguration) could prove more consequential than all of Trump’s NATO-bashing combined.

The Unintended Gift

There’s an irony here. Trump’s scepticism about European defence might be exactly what forces Europe to get serious about it. Germany’s quiet discussions about pushing to 3-3.5% of GDP (from ~2%) would be transformative if implemented.

The continent is tiptoeing towards strategic autonomy not because of lofty Euro-idealism, but because an unpredictable America is forcing their hand. Sometimes you need a crisis to make the impossible possible.

So, is Trump’s NATO pressure working? Yes, but not exactly as he intended. The $18.6 billion is real money – a 6.6% boost for these five nations – but it’s building on momentum that predates his return and potentially kick-starting something bigger than he bargained for.

What do you think? Is this just European hand-wringing, or the beginning of a genuine strategic shift? Drop your thoughts in the comments.

2?? Could a “Mar-a-Lago Accord” Reshape the Global Economy?

Europe’s response options to a shakedown

Threats might make NATO allies squeeze a little more cash out of national piggy banks. But what if there was a way to really make the countries under the US security umbrella pay for the privilege? And restore US manufacturing at the same time (or at least a 1960s fantasy of it)?

That’s part of what’s laid out in A User’s Guide to Restructuring the Global Trading System. The question some are asking – is this Trump’s economic masterplan?

It mentions tariffs, but its boldest move is to force allies into unfavourable century bond debt swaps by tying them to security guarantees (“pay up or else”). The consequences?

• Global financial trust in US debt would collapse;
• US borrowing costs would skyrocket;
• Allies would likely seek alternative security arrangements;
• The dollar’s reserve currency status would be threatened;
• A significant global financial crisis could result.

This approach would undermine the very foundation of US financial power and the international system built around it. If it ever came to this, what could allies do to defend themselves?

Immediate

• Collective Resistance: The combined EU+UK economy rivals the US in size. Unified “NO!” backed by the threat of coordinated retaliatory tariffs, would create big costs for American exporters. BUT needs unprecedented unity.
• Selective Compliance: Partially agree to some currency adjustments while rejecting the most exploitative elements like zero-coupon century bonds. “YES, but” approach acknowledges concerns while refusing extortionate terms.

Speed up:

• Security Self-Sufficiency: European defence integration and spending would reduce vulnerability to US threats. Full NATO independence is unrealistic in the short term, but even partial progress would strengthen Europe’s position.
• Financial Architecture: Europe could expedite the development of non-dollar financial infrastructure – expand the euro’s international role, create European safe assets through joint bond issuance, and improve European clearing systems.
• Diversified Relationships: Deepen economic and limited security relationships with other powers – Japan, India, and select partners in Latin America and Africa.

EU leverage points:

• Still America’s largest trading partner – economic confrontation would hurt both sides;
• EU banks and financial institutions are systemically important to global markets;
• Hosts key US military infrastructure;
• European tech and industrial capacity in sectors like automotive, aerospace, and pharmaceuticals gives it genuine economic leverage.

While Europe faces obvious constraints from security dependence and political fragmentation, the relationship remains genuinely interdependent rather than one-sided.

A crude financial shakedown would likely produce a more independent, less aligned Europe over time – an outcome that would serve neither American nor European long-term interests.

3?? The Hidden Dragon

Is China’s Real Economy Double What We Think?

The official numbers shows China’s economy at 125% of US size (PPP), but what if it’s much bigger?

• China produces TWICE as much electricity as the US
• 12.6 TIMES more steel and 22X more cement
• 3X more vehicles (30.2M vs 10.6M)
• Chinese consumers buy 3X more smartphones
• China as a nation consumes twice as much meat and 8X more seafood than the US

Now these are absolute figures, not per-capita. With China’s population over 4X larger, Americans still consume more per person in many categories. But, energy consumption per capita shows China already surpassing the UK and Italy, with France, Germany and Japan in its sights.

How can an economy generating these multiples be just 25% larger?

The explanation lies in how we measure economic activity. GDP isn’t an objective measure like “tons of steel” but a subjective accounting exercise filled with methodological choices.

Chinese statisticians systematically undercount services, while Western economists count everything from imputed rent to gambling as “productive output.” When healthcare costs rise without improving patient outcomes, that’s GDP growth. When universities triple tuition fees without improving education, that’s economic expansion.

What if our current economic statistics dramatically misrepresent the true balance of economic power?

#EconomicReality #ChinaEconomy #GlobalPower #BeyondGDP

4?? Cobholm And After

Notes from Great Yarmouth on being 60.

The maltings made the salt fog smell faintly sweet. Coal smoke from terraced houses met it halfway. Together they hung in the air like nicotine-stained candy floss. Great Yarmouth, 1970.

Just five, I held my grandmother’s hand. Friday nights, we took the long walk to the chip shop where her sister worked the fryer, hair nets behind the counter, head scarves in front.

At sixty, I measure distance differently. Between then and now. Between the Great Yarmouth that raised me and the one that remains. Between what I’ve seen abroad and what I’ve witnessed at home. The ghost tracks of the dockside railway are my tracks too.

I was born in my grandparents’ two-up-two-down in Cobholm, where the council houses gave way to the marsh. Shared walls. Coal tar soap and sink. Plastic on iron-framed windows kept out the cold, blocked out the alley. They lived there until the 90s, resistant to improvement.

My grandfather was at ‘The Aquarium’ cinema six nights a week. My grandmother clipped the tickets, sold cigarettes and ices. From his projection booth came Hollywood, a beam of dust-filled dreams that neither had any use for. Her escape was me, his a fishing rod.

Vanishing Industry

By the time of my birth, the herring catch had collapsed to nothing. The fishing industry – Great Yarmouth’s reason and meaning for four centuries – was gone. My father worked timber yards not trawlers. The fleets, the crews, the net menders, the smokers, the rope makers, the Scottish fish wives with their gutting knives and cursing – my grandmother winced at their words – all gone.

Great Yarmouth was a working-class town, but cinema work was isolating. The terraces enforced proximity without connection. It was a poverty of solitude, not solidarity. When unemployment climbed in the seventies, people disappeared into their troubles like stones into wells.

My mother escaped. Teenage pregnancy to Open University graduate to teacher. A statistical anomaly. Even now, too few of Great Yarmouth’s kids go on to university. We moved inland to a village outside Norwich. Our family among the first ripples of a small demographic tide: the young and hopeful flowing away from the coast, leaving the old and immobile behind.

Divergent Paths

My siblings and I split like a controlled experiment. They both left school at sixteen, following local custom. I continued to sixth form, then, bizarrely, Oxford. A social scientist might see in us the bifurcation of Britain: the high-skilled and the left-behind, separated by education and the A47.

Television journalism took me from Belfast to the Balkans and beyond. The World Economic Forum gave me a ringside seat on globalisation across each continent. Sarajevo’s ugly blocks resembled Cobholm’s. Tianjin’s billionaires had grandfathers poorer than mine. In Africa and South America, I witnessed the strange half-life of places that global capital finds temporarily useful then abandons. Everywhere, I seemed to recognise fragments of my home.

My sister died in a halfway house in Yarmouth, her problems too compounded by tragedy to retell. My father’s early death spared him seeing the spiralling decline. Two small, private sadnesses, but also data points in a pattern of chronic illness and mental health challenges that overwhelmed stretched services.

Harbinger or Relic?

Is Great Yarmouth Britain’s future or merely its past? The town offers glimpses of what happens when seasonal employment, an elderly population, and limited skills converge. What unfolds here – the hollowing-out of services, the part-time precarity, the exodus of young talent – might await other communities if current trajectory holds.

From the dunes, wind turbines are visible, giant Spitfire propellers over the grey North Sea. Billions in energy investment. Attempts at reinvention. The energy may be renewable, but is Great Yarmouth? Where’s the town’s energy? The highest-paid jobs go to strangers who arrive at nine, leave at six. What wealth there is, arrives and departs by day, never spending the night.

Walk through the old market on an afternoon in February. Most faces were over sixty. No one looked well. The working-age population that supported local businesses when my grandparents were alive is old or gone, leaving behind an economy that gasps between tourist seasons.

Between Memory and Hope

Tourism itself has transformed. The week-long family holidays that packed guesthouses in my childhood have yielded to day-trips and weekend breaks. Many are care homes. Employment follows this pattern: more zero-hour contracts, more seasonal layoffs, more months eating into credit cards until the visitors return. The arcade lights flash, but fewer hands feed coins to machines.

Great Yarmouth exists in limbo – too significant to abandon, too peripheral to revitalise. The Britain I was born into believed in progress, in each generational wave breaking above the last. The Great Yarmouth I see at sixty suggests a different destiny, permanently trapped by the undertow.

Fatalism though would be a mistake. Great Yarmouth has weathered storms for centuries. New bridges, regeneration schemes – all potential inflection points. Perhaps it’s simply the fate of those who remember what was to struggle with what is. Perhaps every generation feels this dislocation, this sense of a world transformed beyond recognition.

Cobholm no longer carries the strange waft of childhood. The maltings closed last century. Coal fires are forbidden. Down on the dunes I can still see my grandfather patiently baiting his lines by lamplight. I can still feel my nan’s hand holding mine. Between us stretch the gold sand and the grey sea and sky and sixty years of memory, thin as winter sunlight on the North Sea.

But enough maudlin reflection. How did it happen! Read on…

5?? The Great Humiliation: An Astonishing 60-Year Economic Divergence

How my hometown failed to keep up.

In 1965, Great Yarmouth was a seaside fishing town with tourism revenue and a GDP per capita around $3k USD. Across the world, Xiamen was an underdeveloped coastal town in China with barely any industry and a GDP per capita of just $120 USD.

Fast forward to 2025:

• Xiamen: $27k USD per capita, 5.5M population (800% growth)
• Great Yarmouth: $22.5k USD per capita, 100K population (43% growth)

The economic reversal offers critical insights for business leaders:

• Strategic policy creates opportunity – Xiamen’s Special Economic Zone status in 1980 created the foundation for explosive growth through foreign investment.
• Infrastructure precedes prosperity – While Great Yarmouth struggled with limited connectivity, Xiamen invested heavily in modern ports, airports, and high-speed rail.
• Diversification is survival – Great Yarmouth remained dependent on seasonal tourism and offshore energy. Xiamen built multiple economic engines across manufacturing, tech, and finance.
• Talent attraction compounds growth – Xiamen’s university and high-value jobs created a talent magnet. Great Yarmouth experienced youth outmigration.

The lesson? Economic transformation isn’t accidental. It’s the result of strategic vision, infrastructure investment, industry diversification, and talent development working in concert.

#EconomicDevelopment #GlobalBusiness #UrbanPlanning #BusinessStrategy

6?? Britain’s Journey, My Journey (1965-2025)

From imperial twilight to missed opportunities…

In 1965, Britain stood at ￡36.6B GDP with a 5.1% world share. We had the potential pathways to reach ￡3.8T and maintain a respectable 3% global share by 2025. Instead, our journey has led to underperformance and relative isolation. Here’s why:

We hesitated at all the wrong moments:

• European Integration: Imperial nostalgia and American allegiance kept us from fully embracing the EEC early. When we finally joined, it was as reluctant partner rather than architect.
• Industrial Strategy: We allowed our manufacturing base to wither from what could have been 20% of GDP to half that. Labour propped up dying industries while Thatcher dismantled them – neither invested strategically to build tomorrow’s champions.
• Defence Capability: We struggled to transition from imperial overreach to sustainable military power. We remained in America’s shadow rather than – like France – developing an independent strategic identity.
• Educational Investment: Perhaps most painfully, we failed to democratise opportunity through education. Class system persisted in new forms, and we never committed to the 6% GDP investment that could have transformed our workforce.

The result? Rather than a ￡3.8T economy with ￡55k GDP per capita that could rival Germany, we settled for mediocrity – a ￡3.2T economy still plagued by trade deficits and diminished global influence.

The Britain of my birth had genuine cards to play –?industrial capacity, international influence, and intellectual capital. What we lacked was strategic vision and the courage to make bold choices.

Perhaps it’s not too late to recapture some of that lost potential.

#BritishEconomy #GlobalBritain #EconomicStrategy #Birthday #Reflection

7?? The Future? A New Hanseatic Moment

Networks and nations collide

I’ve just finished a history of the Hanseatic League, medieval Baltic merchants who created something revolutionary –?a commercial network that transcended traditional boundaries, wielding power through controlling trade routes rather than territory.

For centuries, the Hansa operated between kingdoms, negotiating privileges while remaining fundamentally independent. Their power flowed from their mastery of connections –?the ships, ports, and commercial knowledge that kings couldn’t easily replicate. Theirs was the globalisation of a smaller medieval age.

History rarely allows such parallel authorities to persist. The Hansa’s decline began when territorial powers – emerging nation-states like Sweden, Prussia, and Denmark – recognised their networks as too strategically vital to remain independent. The princes gradually reclaimed sovereignty over the physical foundations that enabled Hanseatic prosperity.

Nations increasingly view digital infrastructure, semiconductor manufacturing, and data flows as matters of national security rather than merely commercial concerns.

China walls its digital garden. Europe is beginning to regulate algorithms and data transfers. America claws back its tech supply chains. Each moves to reclaim authority over what they now recognise as foundations of modern power.

The globalised merchants of code and connectivity, like the Hanseatic traders before them, are discovering the oldest lesson of power –?that when something matters enough to princes, no amount of wealth buys permanent exemption from sovereignty.

Thanks for reading!

Best

Adrian