Donald Trump and the Price of Volatility
Donald Trump was in Switzerland last week, speaking in Davos at the World Economic Forum. By coincidence, I was there too, though nowhere near him. The closest I came was by mistake. I got lost while looking for a place to park, took a wrong turn, and suddenly found myself in front of his hotel, boxed in by barriers and about twenty masked policemen, with dogs and mirrors sliding under cars. I rolled down my window and put on the most innocent Swiss face I have. They didn’t make a fuss, but it was enough to feel the density of real-world power.
Davos has that effect. It compresses things. Influence, proximity, authority. Trump’s appearance there felt the same way. Not a new chapter, not a surprise, but a concentration. The style, the signaling, the reversals, the noise, all packed into a single appearance. If you want to understand what has been building throughout his presidency, Davos was not a detour. It was the moment when the pattern became visible at scale.
At first glance, Trump looks like chaos embodied. One day tariffs, the next day retreat. One week confrontation, the next accommodation. Allies, markets, and media ride the swings, trying to decode whether any statement reflects intent, strategy, or impulse.
The usual explanations split into two lazy camps. Either Trump is irrational and unfit. Or he is secretly brilliant, weaponizing chaos for leverage. Both miss the more mundane and more dangerous reality.
What we are seeing is not strategy or madness, but a personality scaled into a system that cannot metabolize it.
Trump’s decision-making style is not new. It comes straight out of real estate and media, environments where bluffing, signaling, reversals, and pressure are normal. Credibility is short-term. Damage is localized. Relationships are transactional. You can threaten today, walk it back tomorrow, and still close a deal next week. The arena tolerates volatility.
The presidency does not.
When that same style is scaled to the level of a global hegemon, the costs change. A threat from the U.S. president is not a tactic. It moves currencies, supply chains, military postures, alliance calculations. A reversal is not flexibility. It injects doubt into the entire signaling system.
At first, the volatility feels energizing. Markets swing. Commentators speculate. Traders profit. The disruption creates an illusion of vitality. Something is happening. The old order is shaking.
But signaling theory is brutal. Threats only work if they are costly to issue and costly to ignore. Once threats are cheap and reversals frequent, they lose informational value. Actors stop responding to content and start responding to pattern. After a while, the world no longer hears the words. It hears noise.
That’s when the style exhausts itself.
Markets adapt first. They shorten reaction windows and discount rhetoric. Allies stop complying and start hedging. Adversaries probe instead of responding. Eventually even real signals disappear into the fog created by earlier bluster. The system becomes desensitized.
This is not primarily a political failure. It’s a structural one. Global trade, diplomacy, and security run less on goodwill than on predictability. Trust is not a moral nicety. It is an economic and strategic asset built slowly and destroyed quickly. Once eroded, it cannot be restored by volume or force.
Trump did not invent American disruption. The U.S. has used pressure and brinkmanship for decades. What changed is the compression of intervals. Under Trump, threat, escalation, reversal, and contradiction happen faster, louder, and with less institutional buffering. What once unfolded over years now unfolds over days.
The damage is cumulative. Supply chains fragment. Contracts absorb risk premiums. Allies diversify quietly. Even when policies soften, the memory of instability remains. Trust does not rebound. It hardens into caution.
Trump is less a mastermind than an elephant in a porcelain store. At first, the spectacle is captivating. Motion, noise, surprise. Step back later and the humor is gone. The shelves are not rearranged. They are broken.
Chaos can be monetized for a while. Volatility can be traded. Attention can be harvested. But chaos is a wasting asset. Once credibility is gone, the ability to threaten, reassure, stabilize, or coordinate goes with it.
Trump will eventually leave office. The system he leaves behind will be more brittle, more fragmented, more suspicious. Repair will take longer than the damage did. Not because the world is sentimental, but because systems remember.
The core problem is not that Trump changes his mind. It is that a personal style designed for small, flexible arenas has been scaled into a system that depends on slow trust, durable signals, and institutional continuity.
That mismatch is the story.
And mismatches don’t end in clever twists. They end in fatigue, erosion, and long repair cycles.