MacroVoices #551 Michael Every: Decoding The Global Geopolitical Puzzle (Part 2)

In this bonus "Macro Voices Unplugged" episode, Michael Every and host Eric Townsend explore the complex geopolitical puzzle connecting seemingly disparate global events. The conversation begins with three immediate news items: Iran issuing a one-week ultimatum to lift military blockades or resume asymmetric escalations (spiking crude oil prices), reports of Trump committing to a 90-day diesel export ban (opposed by Energy Secretary Chris Wright), and Canadian PM Mark Carney directing military war games to assess responses to a potential U.S. invasion of Canada.

Every argues these events are not isolated but rather interconnected elements of an escalating U.S.-China cold war. He contends the U.S. is attempting to consolidate its Western hemisphere allies while destabilizing regions critical to Chinese supply chains. The diesel export ban exemplifies how the administration may use economic coercion as a geopolitical tool, potentially issuing selective exemptions to nations that comply with U.S. strategic objectives. Canada's situation illustrates the broader pattern: countries face pressure to choose sides, with significant downside risks if they attempt independent geopolitical positioning.

The discussion then shifts to the underlying strategic logic. Every argues that if the U.S. believes China may invade Taiwan, it has two options: negotiate a deal or make invasion strategically unviable. The latter approach involves deliberately destabilizing key regions—Russia-Ukraine consuming resources, the Middle East in flames, rare earth supplies disrupted—to weaken China's strategic position. This framing recontextualizes conflicts previously understood as having distinct causes; instead, they're presented as deliberate components of a larger grand strategy.

Townsend raises a provocative question: is the U.S. inadvertently disarming itself by exhausting weapons and resources through support to Ukraine and Israel? Every counters that the U.S. underestimated its own weakness, comparing America to a 55-year-old realizing their mid-life fitness requires painful adjustment. However, securing the Western Hemisphere and destabilizing China's supply chains would strengthen the U.S. negotiating position.

The AI arms race emerges as a critical new frontier. Every discusses how Chinese open-source models undermine the profitability of American frontier labs, potentially representing deliberate Chinese strategy to cripple U.S. technological advantages before they crystallize into superintelligence. He parallels this to Soviet Cold War tactics of copying rather than innovating, and warns that American academic institutions, driven by quarterly earnings mentality and inadequate security consciousness, remain vulnerable to espionage and talent recruitment by Chinese interests.

Every emphasizes that maintaining an integrated global financial system while engaging in zero-sum geopolitical competition is fundamentally contradictory. He predicts increasing capital controls, exit taxes, unrealized capital gains taxes, and restrictions on money movement—not because of ideology but because cash-strapped governments need resources for defense, AI infrastructure, and strategic commodity stockpiles. Markets cannot operate freely when national security is paramount.

The conversation concludes with nuclear escalation risks. While Every stresses he doesn't forecast nuclear war, he acknowledges plausibility of tactical nuclear weapon use if Iran escalates disruptions to energy supplies or if Russia uses them in Ukraine. He characterizes such weapons as normalized once deployed—a Rubicon that could accelerate alliance formation and defense spending globally. Both speakers express discomfort that such scenarios, once unthinkable, now warrant serious consideration.