A Quarrel In A Faraway Land…

By Michael Every of Rabobank

The immediate focus in markets today is on tech slumping again, rotating from JGBs, then gold, silver and other metals. Yet despite the scale of market moves — around a trillion dollars of paper losses, as ‘Bill Gates stated: “The majority of AI companies will fail”-- few writing about it understand the sector. It is, to quote Chamberlain, “A quarrel in a faraway land between people of which we know nothing.” That line echoes far more broadly and deeply.

US-brokered Ukraine-Russia peace talks in Abu Dhabi saw a “productive” first day yesterday. That’s as can only maintain this war because China is essentially bankrolling it.” One report even says Russia is using neural chips to turn live pigeons into drones. In short, it’s not purely threats to Ukraine, or Russian GDP, or current weapons that Europe needs to pace itself against. Much, much more spending could be needed.

Tomorrow sees US-Iran talks held in Oman, despite a change of venue, Iran nearly backing out, and the US shooting down an Iranian drone near an aircraft carrier. Markets are still hoping for ‘peace in our time’, but it takes no specialist knowledge to know that isn’t really true of the region. Indeed, there is still a strong local view that the talks are likely to fail, opening up a political path for a US and Israeli attack on Iran’s nuclear program, ballistic missile plants, and perhaps the regime itself – which Iran pledges would mean a regional war.

Trump and Xi spoke ahead of his planned state visit in April. The US side stressed lots of deals to be done, including on soybeans; China stated Taiwan is the “most important” issue; in the background, as Bloomberg puts it, “‘Lone Wolf’ Takaichi Wants to Build a Bold, Outspoken Japan.”

For those expecting détente, note China just warned Panama of “heavy prices” to pay after Hong Kong’s CK Hutchinson saw its contract to run ports at either end of the Panama Canal quashed. That was Donroe Doctrine lawfare taking de facto control of a critical global trade chokepoint. Elsewhere in LatAm, Costa Rica just saw a pro-Trump president elected.

“THIS IS DONROE” https://t.co/Zp2mXdVvDW pic.twitter.com/mUvKO3y7qK

— zerohedge (@zerohedge) January 30, 2026

In geoeconomics, the European Parliament unfroze the EU-US trade deal, but a vote is not likely until March, as Von der Leyen tries to seal a security and trade deal with Australia. Yet Oz matches the UK in finding rearmament hard, is a long way from Europe, and part of AUKUS – recall the French submarine debacle? Moreover, an FTA won’t float many boats, and even with one, Europe doesn’t jump the queue for resources, smelt them, or teleport them home.

The key thing to focus on is control of resources, upstream and midstream. Even those who don’t understand AI grasp it needs A LOT of cheap electricity, copper, and rare earths. In that regard, the White House is proposing a critical minerals trade zone to 50 countries, including the EU, Japan, India, South Korea, Australia and the Democratic Republic of Congo (DRC), to curb China’s dominance – as Beijing may The proposed bloc would share a price floor for key inputs as well as a common tariff vs. China. As Vice President Vance put it, “We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone.” In other words, shift industry back to the US – but also expand industry across the bloc rather than buying cheap downstream goods from China.

Understand that this means global decoupling, starting with upstream and midstream; locks countries into a US system vs China; and the only alternatives are China; to build one’s own mines and smelters, if so blessed – as The AI race: US and China defence sectors emerge as key battlegrounds.’ Indeed, Nvidia’s AI chip sales to China have just been stalled by a US security review: KYC measures to prevent chips heading to the PLA.

Yet even as A quarrel in a faraway land between people of which we know nothing.”