MARKET PERSPECTIVE
By J Mulraj
Jan 17-23, 2026
Trump vowed not to use force, but do nations trust him?
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In his speech at the World Economic Forum, President Donald Trump assured the audience, including several world leaders, that he would not use force to acquire Greenland, as he had earlier threatened to do. They let out a collective sigh of relief, just in time to save them from asphyxiation! They’d been holding their breath for long, in fear that use of force against Denmark, a long standing ally of America, would rupture the global order.
Let’s pray that we can trust Trump to keep his promise; the juxtaposition of the two five letter words beginning tru does not truly inspire confidence (ah! there’s a third!).
Trump’s reasons to acquire Greenland are two. One is because the Arctic ice is melting, and, in doing so, is opening up the northern oceans to maritime trade. He fears that Russia/China may grab a toehold in Greenland, which would pose, as Cuba did, an existential threat to USA. He’s trying to prevent that. Secondly, he covets the reserves of rare earth minerals, under Greenland’s frozen land, as a bulwark against Chinese pressure to withhold supply. Let’s examine both.
The US already has a military base in Greenland, and, if push comes to shove, can beef up their weapons easily enough. Russia’s land area is 1.7 times America’s, and it has less than half its population, making it a stretch to protect the world’s largest land mass. Why should it seek to acquire faraway land? The same for China, whose first target is to acquire Taiwan. By the way, Russia has only one aircraft carrier, built 35 years ago, and needing maintenance.
As regards reserves of rare earth minerals, China has the world’s largest reserves, at 44 million tonnes, whilst USA has 1.9 mt and Greenland at 1.8. Even this is buried under tonnes of ice, and extraction would endanger the plate, causing irreparable damage whose culmination would be a 24 foot high wave. One that could demolish NYC. No sane person would take that risk.
Perhaps the rant about taking over Greenland was a red herring to divert global attention from another play – the acquisition of the Gaza Strip. At WEF Davos, Trump launched his World Peace Board, which is, in essence, a land grab clothed in the laudatory and unobjectionable words of ‘world peace’. Trump would be Chairman of the Board for life and have veto power over any decision! He has invited heads of State, including Narendra Modi, to become permanent members of the Board by contributing $1 b. within a year.
It is a land grab because Trump has plans to make Gaza a Riviera of the Middle East. He would do this by the forced displacement of 2 million Palestinians to neighbouring lands! the question of Palestinians, permitted to return to Gaza).
It appears that Trump was silent about the slaughter of Palestinians and, now that they have an existential life, he has formed a land grab initiative called World Peace Board whose aim is to forcibly displace the remaining 2 million residents, who will not be allowed to return to the Riviera of the Middle East. The initial cost of removal of the detritus of war will be funded by the permanent members of the World Peace Board, at a billion dollars each. These members will have no voice over utilisation, as Trump will, as life long chairman, have a veto over all decisions.
At the Davos launch ceremony, 19 countries were present and have agreed to become members.
The World Peace Board will not be limited to the Israel-Palestine conflict but would even intervene in others. This makes the United Nations defunct. This is a dangerous trend and a ticking time bomb as a small group of countries can interfere anywhere, without the legitimacy of an international institution.
Another ticking time bomb is the likely reversal of the yen carry trade. Yield on Japanese Government 40 year bonds went above 4% for the first time. The PM has called for early elections, and has promised to reduce sales tax on food to 0% if re-elected. This would further increase deficit, thus debt, of the world’s highest debt/gdp nation.
Thus far, long institutions such as pension funds and insurance companies borrowed in Japanese yen, at low interest rates, investing the money in US Treasuries with yields around 5%. Foreign investors did, too. Now, the gap in US and Japanese bond yields has narrowed, so the trade will unwind. The last time this happened, stock markets dropped sharply.
The third, omnipresent, time bomb is the possibility of another mid east conflict between Israel and Iran. Should this occur, Iran would block the Strait of Hormuz, through which 20-30% of global oil trade passes. That would spike oil prices.
Last week the BSE Sensex closed the week at 81537, down 2033 points over the week, mainly due to the uncertainties caused by Trump’s rants.
India’s economic performance remains good, with the IMF forecasting a 7.3% GDP growth rate this year, the highest for any large economy. Yet India has a long way to go. Though at #4 in terms of GDP, because it has the world’s largest population, it is woefully low on a per capita basis. The fact that 60% of the population receives food subsidies, 78 years after independence, needs introspection more than plaudits. The backlog of 50 million cases in Indian courts indicates that justice is denied to many. They simply can’t afford a legal battle. At Davos, IMF Deputy MD, Geeta Gopinath, mentioned the difficulty of rural land records and hence to property rights. Raids on political leaders discover large sums of unexplained cash, followed by the silence of an undiscovered tomb.
These are the issues the Government must very urgently tackle, if at all it intends to achieve its vision of a Viksit Bharat.
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