MacroVoices #470 Michael Every: A Week Where Decades Happen?

Episode Summary

Executive Summary: Macro Voices episode 470 centered on Michael Every’s view that Trump’s disruptive foreign and trade policy is a deliberate grand-strategy shift aimed at China, using Ukraine, tariffs, supply chains, crypto, and a sovereign wealth fund as tools of statecraft. The post-game shifted to market implications: weak breadth, falling dollar and oil, firm gold, and highly mixed technicals across risk assets.

Main Topics: Trump’s Ukraine policy and the Zelensky Oval Office blowup (Priority: 5/5): Every argued the public confrontation was a historic diplomatic failure, but also a pressure tactic to force Ukraine toward a minerals deal and ceasefire terms. He sees Ukraine as having little leverage and the US as seeking an exit from the war. Tariffs, North America, and the China strategy (Priority: 5/5): The interview framed China tariffs as real and Canada/Mexico tariffs as a possible bargaining tool to create a North American-plus-allies bloc against China. Every stressed that the key question is whether the US is building a fortress America or a broader anti-China coalition. Executive orders as geostrategic statecraft (Priority: 5/5): Every interpreted multiple Trump executive orders as mechanisms to block Chinese capital and influence, reshape maritime supply chains, accelerate vetted FDI, and potentially use a sovereign wealth fund to acquire strategic assets off-book. Populism spreading globally (Priority: 4/5): Every described a global wave of populism driven by inequality, housing affordability, institutional distrust, demographic stress, and technological change. He warned that if Trump-style populism fails, even worse populism could follow worldwide. China remains the central strategic variable (Priority: 5/5): Every repeatedly argued that all major developments—Ukraine, tariffs, Europe’s rearmament, alliance realignment, shipping, and investment rules—ultimately point back to US competition with China. Market and technical outlook across key assets (Priority: 4/5): Patrick and Eric reviewed a risk-off market tape: S&P weak near key support, dollar breaking down, oil testing lows, gold resilient near $3,000, uranium under distribution, and copper trying to break higher. Breadth remains poor and volatility elevated.

Key Arguments: The Oval Office Zelensky-Trump clash reflected a deep pre-existing trust deficit and Zelensky misread the US audience; Ukraine likely must sign the minerals deal to keep negotiations alive. The Ukraine minerals deal is more symbolic than economic, functioning as a fig leaf that allows Trump to justify a ceasefire push and avoid a long-term security commitment. Trump wants to end the Ukraine war quickly to refocus on Asia and potentially seek detente with Russia as part of an anti-China strategy. China tariffs are real; Canada/Mexico tariffs may still be negotiable and could be used to build a joint North American external tariff against China rather than a US-vs-all conflict. The new investment executive order is designed to exclude China and China fronts from broad areas of the US economy while fast-tracking capital from allies and non-China supply chains. The maritime executive order uses port fees and fleet quotas to punish China-built shipping and incentivize US shipbuilding and strategic supply-chain independence. The crypto order may be less about ideology than creating new fiscal/strategic space; however, market reaction suggests investors are unsure whether the policy is substantive or a bait-and-switch. A US sovereign wealth fund, in Every’s interpretation, is really an executive-branch statecraft tool that can mobilize private-sector leverage for strategic asset acquisition without appearing as sovereign debt. The recent drop in the 10-year yield reflects both market fears of growth slowdown and the possibility that Doge-related spending cuts are easing fiscal pressure. Global populism is not a Trump-only phenomenon; it is a structural response to dissatisfaction, inequality, housing unaffordability, and institutional failure. China is the organizing principle behind the administration’s actions; all other policy moves are best understood as pieces of a broader competitive posture.

Data Points: S&P 500 weekly change: down 191 basis points to 5842 - Macro scoreboard for the week ending March 5, 2025 US Dollar Index weekly change: down 207 basis points to 104.27 - Largest three-day drop in over a year WTI crude oil (April): down 337 basis points to 66.31 - Testing 52-week lows RBOB gasoline (April): down 228 basis points to 214 - Energy weakness alongside crude Gold (April): down 14 basis points to 2926 - Holding near record territory despite minor pullback Copper: up 551 basis points to 479 - New breakout discussed as potentially trend-confirming Uranium: down 139 basis points to 64.05 - Still in a weak technical pattern despite bullish nuclear news US 10-year Treasury yield: up 1 basis point to 4.31% - Near-term yield stability despite broader market uncertainty SPX short-term resistance: 58.75 - Eric’s level for confirming a short-term uptrend SPX downside trigger: 57.50 - A close below this prior low would signal a deeper correction VIX: 23-24 range - Implied volatility elevated, making options more expensive China tariff: 20% - Described as signed and real Canada/Mexico tariffs: 25% and 10% for energy - Discussed as imminent but still potentially changeable Maritime port fee on China-built ships: $1,000 per net ton up to $1 million cap; $1.5 million for China-built and operated ships - Proposed USTR response to Chinese maritime dominance Maritime shipping quotas: 1% rising to 3% then 5% - Share of US exports to be carried on certain vessels over coming years American-built ship quota: 3% of cargo then 15% of outbound cargo; 5% of ships built in America - Part of reindustrialization and merchant marine strategy Gold correction low: $2,844 - Bottom of the recent correction, above the 38.2% Fibonacci retracement Copper levels: $4.65-$4.70 near-term hold; $5+ prior highs - Key technical zones for confirming breakout Potential oil washout: $63-$62 - Downside targets if support breaks Potential gold upside: $3,200-$3,300 - If dollar weakness becomes a new tailwind

Pivotal Quotes: "take President Trump very seriously, but not always literally" — Michael Every: Eric referenced this earlier prediction as having proven prescient on the current news flow "What this was an attempt to try and buy time, get everything to just calm down for a while" — Michael Every: On the purpose of the Zelensky minerals-deal confrontation and ceasefire logic "There is some kind of strategy, chaotic as it may appear, and sometimes the chaos can be part of that strategy" — Michael Every: On how investors should interpret the administration’s seemingly erratic policy moves

Implications: Listeners should view current policy shocks as part of a broader anti-China realignment, not isolated headlines. Markets likely stay volatile, with technical fragility in equities and oil, while gold and policy-sensitive sectors may continue to diverge.