Erosion of the dollar's safe-haven role

A week after his emergency episode on President Trump’s threats to acquire Greenland, Darren returns with a rapid debrief of the Davos meetings—and what it means for the world (and for Australia). The immediate crisis appears paused: Trump has shifted from “ownership” to a negotiating “framework” focused on Arctic security, basing access, and keeping China and Russia out. Still, Darren thinks the sovereignty question is not resolved, and these events are a marker of deeper institutional decay.

Darren then unpacks Canadian Prime Minister Mark Carney’s much-discussed Davos speech: a blunt warning that the world is experiencing a rupture of the international order, not a smooth transition. He shares Carney’s sense of urgency, but challenges parts of the diagnosis—and explains why those analytical distinctions matter for policy choices.

He assesses Trump’s proposed “Board of Peace” as a signal of how personalist, status-driven institutions can emerge when rules weaken. Darren also reflects on power—arguing that Trump’s performative displays of raw strength risk the Athenian problem of overreach and backlash, while for middle powers real leverage often lies in domestic resilience: the capacity to mobilise politically and absorb pain long enough to hold the line. The episode finishes once again with an Australia angle, given Canberra has benefited from luck as much as strategy. What are Australia’s red lines—and when would it speak up for partners before silence becomes precedent?

Australia in the World is written, hosted, and produced by Darren Lim, with research and editing by Hannah Nelson and theme music composed by Rory Stenning.

Relevant links

Thomas Wright, “Europe’s red lines worked”, The Atlantic, 22 January: https://www.theatlantic.com/international/2026/01/greenland-crisis-trump-diplomacy-nato/685715/

Paul Krugman, “Trump 1, Europe 1”, Paul Krugman (Substack), 23 January: https://paulkrugman.substack.com/p/trump-0-europe-1

Davos 2026: Special address by Mark Carney, Prime Minister of Canada, 20 January: https://www.weforum.org/stories/2026/01/davos-2026-special-address-by-mark-carney-prime-minister-of-canada/

Richard Green and Daniel Forti, “The board of discord”, Foreign Policy, 22 January: https://foreignpolicy.com/2026/01/22/trump-board-of-peace-united-nations-gaza-ukraine-international-cooperation/

Anton Troianovski, “Trump’s ‘Board of Peace’ Would Have Global Scope but One Man in Charge” New York Times, 21 January: https://www.nytimes.com/2026/01/21/us/politics/trump-board-peace-united-nations.html

Sara Jabakhanji, Graeme Bruce, “Here are the countries joining Trump's 'Board of Peace' so far”, CBC News, 22 January: https://www.cbc.ca/news/world/board-of-peace-gaza-trump-list-of-countries-9.7055866

Seva Gunitsky, “The Strong Will Suffer What They Must:Vaclav's Grocer and American Hubris”, Hegemon (Substack), 21 January: https://hegemon.substack.com/p/the-strong-will-suffer-what-they

Krzysztof Pelc, “The look of empire: Donald Trump’s dangerous fixation with imperial aesthetics”, Foreign Policy, 22 January: https://foreignpolicy.com/2026/01/22/trump-venezuela-empire-greenland-nato-europe/

Kyla Scanlon, “The Great Entertainment: Can you govern the world like a reality TV show?”, Kyla’s Newsletter (Substack), 22 January: https://kyla.substack.com/p/the-great-entertainment

Kate McKenzie and Tim Sahay, “Canada's new non-alignment: What sovereignty means now” Polycrisis Dispatch, 23 January: https://buttondown.com/polycrisisdispatch/archive/canadas-new-non-alignment/

Alan Beattie, “Carney’s new global order needs a huge shift in political will”, Financial Times, 22 January:  https://www.ft.com/content/5dcbc846-5f32-4076-909b-94b5ef87895c

Sarah Marsh and Elizabeth Pineau, “Europe's far right and populists distance themselves from Trump over Greenland”, Reuters, 22 January: https://www.reuters.com/world/europes-far-right-populists-distance-themselves-trump-over-greenland-2026-01-21/

The Rest is Politics (podcast), The real reason Trump wants Greenland, 21 January 2025: https://www.youtube.com/watch?v=yJ0P-xkIQHY