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January Newsletter: The US ‘Cyberattacks’ the UK

28 January 2025

Moral injury. This is the term often associated with soldiers who experience trauma in conflict—following orders that go against their moral compass, forced to commit acts that would be considered crimes in ordinary life. When peace finally comes, the outcome is not always what they thought they were fighting for. A deep sense of betrayal sets in… “We killed for what?”

But moral injury is not just confined to the battlefield; it can affect ordinary people too. Consider those in the UK who voted against Brexit, believing in the ideals of the European Union. For them, the EU was more than a political bloc—it represented a vision of cooperation and peace. When that vision crumbled with Brexit, many felt an enduring moral wound. Fast forward to today. The rise of populism in the US under President Trump brings a new kind of moral injury to those who believe in the values of liberal democracy. His “America First” approach alienates allies and dismantles the very foundations of cooperation, where truth often takes a back seat to self-interest. For those who once trusted the ‘West,’ this shift feels disorienting and painful—another form of moral injury.

However, the MAGA movement is not just causing moral injury; it’s inflicting financial injury too. The irony is that America is already great—its economy is the largest, its culture is predominant, and its companies dominate global business. But that is not enough for the current government. The consequences of this unchecked self-interest are already evident. Take Elon Musk, for example. His recent tweet, “Prison for Starmer,” followed by an online poll questioning whether the US should “liberate the people of Britain from their tyrannical government,” is not just a personal grudge or an exercise in power—it is effectively a cyber-attack. The tweet’s impact probably hit the UK bond market, increasing the cost of government borrowing. Bond markets love stability. And while global bond markets have been weak recently, the UK market has been the standout loser. Economic factors alone do not fully explain why the situation has been the worst in the UK. The timing coincided with Musk’s inflammatory rhetoric. Musk apparently has the power to destabilise the US’s traditional alliances, shake market confidence and cost them money. With friends like these, who needs enemies? Long seen by some as a playground bully, the US is now turning on its own allies, creating yet more moral injury. A decade ago, President Xi’s increasingly aggressive policies triggered a realignment of Pacific nations relationships. Some strengthened their ties with the US. Shifting trade routes and capital markets takes time, but it is becoming difficult to see the US’s allies not reconsidering their positions. Countries like China and India are already positioning themselves as more dependable, less self-serving alternatives.

Imagine holding a beautiful butterfly gently in your hands—nurturing it with care and admiration. As you open your hands just a little, you marvel at its pure beauty and simplicity. It fills you with a sense of hope and fulfilment. Now imagine someone coming along and crushing your hands together, destroying the butterfly. This is what America is doing today—deliberately crushing butterflies. Creating moral injury. It is becoming increasingly hard to believe that those whose butterflies are crushed will continue, unthinkingly, to pour their investments into American corporate giants that manipulate the rules to serve their own interests. Into American bonds to pay for Trump government deficits. This overall picture may not be positive, but it is pretty clear who has most to lose. How much of your money is in America?

by Craig Harper, Managing Director