The New Geo-Political Era Is Changing EVERYTHING...But Wall Street Is BLIND To It | Michael Every

Industrial policy (using state investment banks to direct capital toward critical sectors) was unfashionable for decades but is now returning across multiple countries, as evidenced by the UK's British Business Bank and similar institutions emerging elsewhere.

“in the UK um they're trying to now start lean towards industrial policy which is an oldfashioned 1970s word which is part of Economic statecraft and it very much went out of fashion it's very much back in fashion now so they're looking at something called the British Business Bank which is like an investment bank owned by the state which I expect to see more of in lots of places”

China pursues a consistent mercantilist strategy of running $1 trillion annual trade surpluses and continuously expanding export share, creating global tensions as its products flood world markets, making universal adoption of Chinese mercantilism impossible (all countries cannot run surpluses simultaneously).

“because China's on mealy you can carry a small mechanist in your pocket as a global economy because they they're small once you're a giant like China and you still run A1 trillion doll Trade Surplus every year and you're not content with that you want it to be higher you keep trying to grow your exports even more the world is full of your stuff and of course people will push back”

Border security has transformed from an amorphous topic where there was no national consensus on immigration policy into a clear policy priority where Trump has stated the cost of national security is essentially unlimited.

“and now it's Crystal Clear and when asked about well how much you going to spend on it president Trump he has said what's the cost of National Security basically saying it's Priceless like I'll spend whatever it takes right”

Michael Evy predicted in November 2024 that geopolitical momentum would shift away from globalization and toward mercantilism and protectionism, a prediction that has proven accurate as seen in Trump's America First agenda and worldwide nationalist movements.

“when today's guest was last on this program back in November he predicted we'd see continued momentum geopolitically away from globalization and towards mercantilism and protectionism that's proven to be the case worldwide”

Economic policy and statecraft are fundamentally different: economic policy uses tools like interest rates to achieve technocratic economic targets like low unemployment or 2% CPI, while statecraft uses the same tools to achieve foreign policy, national power, and national interests, which are completely different objectives and often contradictory.

“when you've got economic when you got Economic Policy you're using all the kind of terminology that we understand like interest rates for example the FED funds rate um to look at an economic Target market for example we want low unemployment or we want 2% CPI or we want you know stable long-term bond yields so we'll set the FED funds rate appropriately to try and Achieve those targets and everyone understands that's a technocratic ostensibly a political Target... but largely it's kind of neutral it's in a technocratic box when you move over to statecraft you you are trying to look at foreign policy National Power and national interests and you use the same tool to try and Achieve something completely different”

Investors who continue to apply traditional macroeconomic metrics (2% inflation, unemployment, Fed funds rate, GDP) to understand current policy will 'sleepwalk into a meat grinder' because the Playbook has changed and these metrics are no longer the primary policy drivers; mercantilist-minded investors need to analyze geopolitical decision sets and their likely impacts instead.

“if you are planning on investing according to the status quo you are probably sleepwalking into a meat grinder um because we are we literally The Playbook has changed and so you know if if you have any other things that you think you got some confidence in and in where markets might go this year please share it with me but I'm kind of taking away from you we all got to put on our mercantilist classes”

The economy is one gear in the broader national interest machine but not the dominant one; nations will now sacrifice or starve parts of their economy to feed other parts and to advance overall national interests, meaning GDP optimization is subordinate to geopolitical positioning.

“the economy is one of the gears but it is not the gear right so in in some ways... Nations will now say well you know what I might actually sacrifice this or starve this part of my economy to feed this part of my economy or or feed this this um this other Adventure internationally to advance our our overall natural interest”

Ben Scott and Treasury officials are explicitly focused on the 10-year yield and long-end curve dynamics rather than Fed funds rate, as part of economic statecraft to control long-term borrowing costs and shape capital flows toward national security objectives.

“one of the key things there is even if we don't do anything with the with the short end bent has openly said now the 10e is what they're looking at he said they're not looking at fed funds they're looking at the 10 year”

When countries deregulated everything and embraced global markets, immediate analysis showed inevitable winners and losers within every economy (rich richer, poor relatively poorer) and between countries (those running trade surpluses like China, Japan, Germany winning; deficit-runners like the US losing), making eventual breakdown inevitable.

“when you looked at the fact we then deregulated everything and said because markets it was evident immediately that you would have winners and losers inside every economy so the rich would get richer and the poor relatively would get poorer and you'd have winners and losers between countries I.E the ones who were still mercantilists like China uh earlier like Japan like Germany which insist on running a trade surplus which means somebody else has to run a deficit”

When predicting something (like mercantilism's return), one should not be confused with wanting that outcome; prediction is descriptive about what IS or WILL BE, not normative about what SHOULD BE.

“I mean you you do this all the time right I mean you're you are the expert on all this so you have to talk about it all the time yeah and again I describe the world as it is based on a certain Theory um and a certain methodological toolkit which I would like to think my track record shows has worked well or has worked far more often than not in terms of predicting you know the a lot of these big changes and yeah...people get confused that if you predict something you're being normative and you want it to to happen it's not the same thing”

China faces a situation where if everyone else copies its mercantilist playbook, it loses its competitive advantage because it can no longer be the sole mercantilist in a liberal world economy; China is now facing balance sheet recession, demographic headwinds, and a world where its playbook has been adopted by everyone else including its primary competitors.

“the bigger issue for me and this is not one for just this year but going forward as you said if everyone now copies China's Playbook which was one of the core things I've been arguing for years where do they go from there because you can't go the route of saying right well we'll become the free Trader... you then end up in a very very tense Global situation because everyone wants to win that race it's completely zero sun”

After the Cold War ended with America's victory through a carefully ring-fenced economy, the US transitioned to a true global economy for the first time, but this system was destined to fail because deregulation meant immediate winners and losers within every economy (rich getting richer, poor relatively getting poorer) and between countries (mercantilist countries like China, Japan, Germany winning while deficit-running countries losing), making breakdown inevitable.

“then at the end of the Cold War which we won through having a very carefully ring fenced economy where you could do some things and you couldn't do other things um we then had a true global economy for the first time but if you really looked at it first of all you'd say is this going to work this time because it's never worked before and when you looked at the fact we then deregulated everything and said because markets it was evident immediately that you would have winners and losers inside every economy so the rich would get richer and the poor relatively would get poorer and you'd have winners and losers between countries I.E the ones who were still mercantilists like China uh earlier like Japan like Germany which insist on running a trade surplus which means somebody else has to run a deficit and the losers the country is running the deficits so if you looked at the long run of History you looked at the fact that the winners in in some countries were doing better than the losers and between countries some were winning and some were losing it was inevitable inevitable that it would eventually break down one way or another and it has”

The world is transitioning from Star Trek (federation, all planets working together) to Star Wars (those with might do what they can get away with), and this shift represents a move from attempting unified global governance to neo-imperial spheres of influence where power dictates outcomes.

“you see the future is being much more Star Wars versus Star Trek right Star Trek is all about the Federation and all the one you know Universe government and all planets working together Star Wars is basically those with the might do what they can get away with right”

If every country adopts mercantilist trade surplus strategies simultaneously, the global situation becomes zero-sum (trade surpluses require deficits elsewhere), leading either to severe conflict or to a return to spheres of influence where countries negotiate territorial zones and agree to write the divisions on cocktail napkins.

“as a result you then end up in a very very tense Global situation because everyone wants to win that race it's completely zero sun and either that ends very badly you know in as it's been shown in history before or you have to go back to something else I alluded to at the beginning which is spes of influence you know zones of interest and saying okay that block of countries they're yours these are you know we'll be 50/50 in that lot and we're back to end World War II with you know shares of countries written on cocktail napkins”

Some policymakers argue that if China becomes the alternative mercantilist partner, Europe and others could simply switch to dealing with China instead of America, but this ignores the fact that China operates without democratic accountability, constrains others' policy freedom, and switching to China is not truly fungible with switching to America which at least has electoral mechanisms.

“there is as you answer is it really a fungible Choice like that I mean there's a lot that comes with Mitch mercantilist you pick right of course absolutely I mean if Europe were to say openly no right we're going to start doing more trade deals with China then I can guarantee you that those you know those American Military umbrellas over Europe would start to be uh you know retracted much more quickly and much more painfully and other pressure points would be used like the euro dollar system etc etc so no I don't think they are fully fungible but for some smaller countries possibly but you know you are exchanging one mechanist for another and one you have elections and in four years things might change and in the other one you don't and they won't”

People in markets are exhausted with geopolitical headlines and difficulty computing the magnitude of changes, so they are switching off and refusing to trade or price in geopolitical risk until they see concrete evidence on their desks, causing the market to lag enormously and setting up for dramatic repricing when it finally realizes the shifts are real and not just noise.

“people are so exhausted with the flurry of headlines coming through and just how Wild some of them are and they're having so much difficulty Computing just how big these changes could be fundamentally that they're switching off and they're literally saying I'm not even going to try and trade this anymore until I see it in front of me”

The US federal government could theoretically abolish the Internal Revenue Service and fund the state primarily through tariffs and trade policy, a mercantilist model that America used up until the early 1900s and is being revived as part of Trump's economic statecraft.

“Trump's comments about hey we might just abolish the Internal Revenue Service and we just may be able to get all of our income that we need to fund the state from external parties... I mean there are some that argue that that's how we funded America you know up until the early 1900s”

Canadian sovereignty and independence may be increasingly questioned if America views Canada as strategically necessary for North American security, particularly given Arctic importance, similar historical patterns of imperial protection turning to absorption, and Canada's relatively small economic and military power compared to the US.

“Canada... existed initially under the protection of the British Empire... then once the Brits get shoved off of top slot... America is Top Dog... and during the Cold War obviously America protected Canada because it was right next door to Russia and the Arctic is critically important... what's happened since the re-election of trump... is the reemergence of spheres of influence neo-imperialism mechanism”

Evy uses 'fart craft' as a term for using the financial system to create money from money (leverage, borrowing), and proposes using this financial engineering to fund 'war craft' (actual national security infrastructure like border walls, military spending).

“when you talk about taking an asset for example this piece of federal land mortgaging it leveraging it up and then saying we're going to take that fund which is pretty much Fiat it's not savings it's not gold it's not crypto or anything like that it's just you know multiplied up Fiat money but we're going to put it in a hard asset over here like you know some new border defense a border wall whatever it takes to make you feel safe I've said that's using finan flatulence what I call fart craft where basically you're just using the financial system to make money from money but you're doing doing farcraft in order to try and build Warcraft”

Brazil is the critical player in Latin American mercantilism because it is cheaper than US at food/commodity production on massive scale, making it a competitor; US could offer subsidies and tariff exemptions to redirect Brazil toward manufacturing for US market instead of expanding agriculture.

“Brazil is cheaper in many of them and it can produce on vast scale and continues to increase its output why aren't you on our team...you could turn around and say let's try and use a combination of subsidies and tariffs and economic statecraft and fed swap lines to say look in China there's a cluster of cities here producing this particular product which we're still importing into America we're going to put 25 or 35% tariffs on China there but we're going to give an exception to Brazil”

The United States could leverage its unmonetiized federal assets (public lands, infrastructure rights, etc.) by borrowing against them to create a sovereign wealth fund that can be deployed into strategic sectors the market won't fund (border security, defense, critical infrastructure).

“the US federal government still has a lot of assets which have not been monetized so obviously what they're going to do is try and borrow against those leverage it up and then take that capital and spend it where they think it needs to go again for National Security or these are the areas that the markets won't go into themselves”

Economic policy uses tools like the federal funds rate to target economic metrics (unemployment, CPI, stable yields), framed as technocratic and ostensibly apolitical, whereas statecraft uses the same tools to achieve foreign policy and national power objectives, which is fundamentally different.

“when you've got economic when you got Economic Policy you're using all the kind of terminology that we understand like interest rates for example the FED funds rate um to look at an economic Target market for example we want low unemployment or we want 2% CPI...largely it's kind of neutral it's in a technocratic box when you move over to statecraft you you are trying to look at foreign policy National Power and national interests and you use the same tool to try and Achieve something completely different”

Canada's historical ability to remain demilitarized and independent was protected first by the British Empire, then by American security commitment during the Cold War, and lastly by NATO; as spheres of influence reemerge, Canada cannot realistically maintain independence without military strength or submission to American orbit.

“if you look at the long run history of Canada obviously a proud people you know a great nation etc etc qualification it existed initially under the protection of the British Empire which was at the time the most powerful force in the world...then once the Brits get shoved off of top slot internationally then America is Top Dog and during the Cold War obviously America protected Canada...and at that point Canada was like many smaller countries...able to say hey we are now on the world stage...we can do whatever we want...well what's happened since the re-election of trump...is the reemergence of spheres of influence neo-imperialism”

The key analytical framework for understanding markets going forward is 'Grand Macro Strategy' (what is the US trying to achieve geopolitically, who is in the alliance, what are the dividing lines) rather than traditional 'Macro Strategy' (GDP, ISM surveys, payrolls, inflation), and the order of analysis must be: Grand strategy → macro outcomes → market impacts.

“it comes back to that point that I was Raising back in November you know the day Trump one...it's now Grand macro strategy it's not macro strategy which is what we normally talk about you know GDP the ism survey nonf far payrolls etc etc inflation CPI no it's Grand macro strategy which is what is the grand strategy of the US what is it trying to achieve now...what does it make the macroeconomy look like and then what does that make markets look like you have to get that order correct conceptually”

The vast majority of market participants and asset managers do not practice geopolitics or understand how to incorporate geopolitical risk into pricing models because they rely on standard metrics that worked well for an entire generation but are now encountering a generational breakdown.

“while people have kind of woken up to what's going on the vast majority don't do geopolitics now they're very good at what they do they have lots of kind of standard metrics that they look at that have worked really really well for an entire generation but when we're now having a generational breakdown and as a result some of those people are actually having their own breakdown”

Trump's pressure on NATO allies to spend 5% of GDP on defense could be applied in combination with threats to retract the American security umbrella, forcing Europe to either spend 5% purely to defend itself or spend 3.5% on US arms purchases, either way structurally transforming the European economy and limiting its ability to pursue other priorities.

“from a financial and defense perspective it looks to me like America is literally saying to all of Europe you need to start spending 5% of GDP on defense now not 1.5 and then the question is do you want Europe to spend all that from their own pocket which will completely change their economy vastly more than the American economy that would just transform them and you take on Russia and we look at China which is one strategy or are or do you want them to spend 3.5% of GDP and buy stuff from America”

Tariffs are not primarily economic policy but statecraft tools—they can hurt domestic consumers in the short term (inflation) but serve larger geopolitical objectives like reshoring production, building alliances, or weakening competitors, so traditional economic cost-benefit analysis misses the point

“the disruption that's going on right now is people might be saying like whoa wait a minute why are we going by this Playbook why why you going by tariffs they're they're bad right they're going to maybe make you know inflation be a little bit higher in the near-term here inside the country or whatever right and and the answer is is because it's a bigger game there's there's other larger objectives that are trying to be uh attained here than just what's the best GDP we're going to get for the next quarter”

If asset managers in Canada were to price in existential questions about Canada's continued existence (Trump statements), it would show up in their research and they would be unable to price long-term bonds correctly, but they won't openly discuss it because it threatens their worldview, so they treat it as noise instead of real risk

“you now have existential questions about the existence of Canada now you may dismiss them and say well that's utterly ridiculous and you know maybe we can explore that in more detail...but when you have people saying we don't think your country should exist uh you know from a very powerful Neighbor Next Door with nuclear weapons do you really think you put that in your research note do do you really think you're going to start including that no you're just going to say this is noise I'm not thinking about that because I like my passport I like my currency I like my Central Bank you know I like my way of life”

A fully tariff-funded government would initially generate revenue and inflation, but once foreign production is replaced with domestic production, the tax base wouldn't grow enough to replace previous federal spending levels, requiring dramatic reduction in government size or services

“anything coming in from abroad uh is you know very very expensive which would generate quite a lot of Revenue and inflation initially and then eventually once you replace all foreign production with domestic production you don't have much of a tax base I mean it grows a bit because you know you have got extra activity happening at home but maybe not enough to cover everything that people have been used to with the current kind of fiscal or federal fiscal umbrella”

China cannot easily pick up the world as an alternative to US mercantilism because China and US mercantilism are not fungible choices; European countries choosing China over US would face immediate withdrawal of US military umbrellas, financial system access through eurodollar system, and other coercive measures.

“there is as you answer is it really a fungible Choice like that I mean there's a lot that comes with Mitch mercantilist you pick right of course absolutely I mean if Europe were to say openly no right we're going to start doing more trade deals with China then I can guarantee you that those you know those American Military umbrellas over Europe would start to be uh you know retracted much more quickly and much more painfully and other pressure points would be used like the euro dollar system etc etc”

Globalization and free trade for the past 40-50 years represent a historical aberration; the long run of human history is characterized by protectionism, mercantilist competition for trade surpluses, and control of value chains, which will reassert itself.

“the long run of human history is that international trade and international relations have always been about protectionism mechanism I.E I run a trade surplus you don't...then for a lovely window post World War II we had a US built system...and then at the end of the Cold War...we then had a true global economy for the first time but if you really looked at it first of all you'd say is this going to work this time because it's never worked before”

Evy uses the term 'fart craft' (using financial system to make money from money) to describe the process of leveraging federal assets up to create capital pools for warcraft (building actual national security capabilities), showing how financial engineering serves geopolitical objectives.

“when you talk about taking an asset for example this piece of federal land mortgaging it leveraging it up and then saying we're going to take that fund which is pretty much Fiat it's not savings it's not gold it's not crypto or anything like that it's just you know multiplied up Fiat money but we're going to put it in a hard asset over here like you know some new border defense a border wall whatever it takes to make you feel safe I've said that's using finan flatulence what I call fart craft where basically you're just using the financial system to make money from money but you're doing doing farcraft in order to try and build Warcraft”

The 'Maral Lago Accords' concept—where Trump potentially forces allied countries to buy long-term US bonds at zero coupon or very low yields as tribute, thereby shifting the yield curve down and supporting stock prices—is being discussed as an economic statecraft tool that would redistribute wealth to the US.

“this is where statecraft C's coming in again because we've had recent discussion about what is economic statecraft in concept Jim biano talking about the maral Lago Accords and I see Bloomberg this morning here is talking about the fact people are talking about that again and saying that Trump may say to like Europe right you don't have to pay spend three and a half perc of GDP on defense but we want you all to buy 100 Year us bonds at you know zero coupon or incredibly low yields”

Europe's dilemma is existential: it lacks a strong central government or military and relies on American protection, so it must choose between autonomy (spending heavily to rearm independently) or dependency (accepting American dictates on defense and payments), and markets are currently pricing this existential risk as if it doesn't exist.

“president macron has said you know Europe can die... what you have basically is the equivalent of an America where the federal government is incredibly weak... there's no fiscal Union so each one of the states has their own budget... if that was the position in the US where do you think you would stand right now on the geopolitical stage”

Countries should be open to a much larger option set of possible outcomes including potential territorial reallocation, closer integration with larger powers, or formal incorporation into larger political units, based on rational cost-benefit analysis rather than historical pride or cultural assumptions about national independence.

“you know that's just sort of how business works and decisions get made and I know you know statecraft is different than than just business but but it it it it makes a lot of sense and as you said this is sort of how the world worked from many many many centuries up until the 20th century which is the history we're almost immediately familiar with”

Markets are lagging enormously and will not move in response to news, then will move dramatically when it finally realizes 'yes, this is real and not just headlines,' creating an inefficiently priced market structure vulnerable to sharp repricing

“the market itself in general is lagging enormously here and it's not going to move and then it will move dramatically when it finally realizes Yep this is real and not just headlines”

Future European integration into US structure is theoretically possible if countries are willing to use US dollar instead of Euro and accept full integration, showing flexible application of 'franchise' model for US expansion.

“in it America in the future has a franchise where basically any any country around the world can basically join which of course the European Union has had as its operating uh you know mechanism for quite some time um and back in that November statecraft piece I did say that infrastructure in America in the past meant territorial expansion...if Greenland becomes an American protectorate or something then in the long run if you're looking at oh the rest of this Century all kinds of questions can start to be asked okay that's that's that that's all I would say um and yeah for the US it wouldn't surprise me not just looking at Europe if you don't have America saying where are there relatively lowcost High return territories”

The Trump administration may use the Defense Production Act to subsidize oil production to lower energy prices, which combined with tariffs and possible forced foreign purchases of long-term US debt could simultaneously reduce inflation, fund defense, and boost stock prices via lower discount rates.

“Trump will do everything in his power to get oil prices down...I can see the clock but I just have to make this point even the trans Alaskan Pipeline...was built using economic statecraft the defense production act...there's nothing at all to stop Trump using the defense production act again and saying National Security yada yada yada subsidies whatever we've got to get oil prices down and if you do that...Energy prices plummet you can put up a 25% tariff...and if it is slightly higher you give an income tax cut...maybe that works and if you again Force some countries to buy a 100-year debt maybe you can force down that long-term cost of borrowing and stock prices go up”

Vice President Vance is publicly stating to Germany that the US shouldn't defend them if Germany continues imprisoning people for social media posts (critiquing censorship), signaling that America is now making political/cultural demands of allies as preconditions for security

“overnight as we're speaking now your your day vice president Vance literally said to Germany why should we bother defending you if you're going to put people in prison for a mean tweet MH so he's trying to affect political change in Germany in terms of their quite censorious you know liberal democracy”

Greenland, with 60,000 people and vast unmonetiized territory, could be incentivized to join the US by offering each resident $1 million from leveraged federal assets, a cost far lower than US expenditures on Ukraine aid, which would gain the US significant resources and strategic Arctic positioning.

“why wouldn't use your Sovereign wealth fund to monetize some sleeping Federal asset somewhere leverage it up 10 times so it's worth six billion dollars okay for example a federal asset worth six billion you leverage it up 10 times with the magic of fart craft and then you say here's $1 million each right everybody in Greenland if you want to become an American state I I I literally raised this on on X I was like I mean we could make everybody there a millionaire and it would be not that much money compared to what we spend for Ukraine support and a lot of other things”

Market participants are experiencing exhaustion from the flurry of headlines and are consciously avoiding pricing in geopolitical change, instead adopting a 'show-me' mentality where they will only trade when developments become undeniable facts on their desk rather than speculation.

“people are so exhausted with the flurry of headlines coming through and just how wild some of them are and they're having so much difficulty computing just how big these changes could be fundamentally that they're switching off and they're literally saying I'm not even going to try and trade this anymore until I see it in front of me until I've got that on my desk literally as a fact I cannot ignore”

Trump has explicitly stated that he's looking at the 10-year Treasury yield (not the federal funds rate) as the focus of policy, suggesting that controlling long-term borrowing costs is now the explicit policy target, which is a shift from traditional Fed focus on short rates.

“even if we don't do anything with the with the short end bent has openly said now the 10e is what they're looking at he said they're not looking at fed funds they're looking at the 10 year so the part of that is about of course you know what they're going to be doing in in in terms of financing whether it's t- bills or along end of the curve”

Europe is being asked by America whether it will defend itself (specifically the Baltic states), and European answers so far are evasive ('let's have a committee'), which signals Europe doesn't have political will for military action, making the Euro and European assets increasingly risky long-term

“Europe is being asked by America okay if this matters to you are the French and the Spanish and the Germans prepared to go and fight in the Baltic states for Europe and if the answer is no and so far the answer is we'll get back to you let's have a committee and the only ones who will do it are America and America says we can't afford to do it anymore”

Russia has been injured by the Ukraine war in terms of relationships with other players globally but has gained territory in Ukraine, may emerge with new territory, and if readmitted to the G7/G8 by the Trump administration appears to be achieving some degree of geopolitical rehabilitation despite losses.

“Russia has obviously gained some some res sources uh in in Ukraine now um but it has definitely injured its relationships with other players uh around the world because of the war... Russia suffered some severe blows um and some of them may even be permanent given the de demography of the country but if it emerges from this with a lot of new territory which does seem likely and if as we saw overnight America is saying it wants it readmitted back into the G7”

If countries were stocks, Evy would be strongly buying the US and strongly shorting both Europe and China given current geopolitical trajectories and uncertainties.

“if countries were stocks knowing what we know right now... who would you be buying who would you be shorting shorting Europe shorting China buying the US very very clearly”

The Federal Reserve currently claims to be on hold and doesn't know what's happening geopolitically, is still studiously apolitical despite obvious political implications, and may see governance rotation to new Fed governors in the coming years who are more aligned with statecraft objectives than with traditional central banking independence.

“the FED doesn't want to do that the feds now come out and basically said we're on hold until we understand what's going on they have no idea what's going on no idea at all... I I don't think I mean it would have to be blind not to be aware it's going on they are still studiously apolitical even though of course they have a domestic you know political angle that they don't talk about but I wonder what the next set of fed Governors will look like when they're rotated through in the next few years”

Adam's channel will likely need to cover political action more frequently in the future because political/geopolitical strategy is now the primary driver of economic and market outcomes, forcing previously apolitical channels to engage.

“I think we probably have talked a lot more about what's happening in the political sphere in the past couple months than I have in my years of doing this but it's for that reason it's it's not taking aside or or supporting one particular agenda over another it's just the dawning reality that hey we got to really figure out we we we got to watch the action here because we have to be able to calculate where it's going to end up”

Trump's early strategy actions suggest he's willing to use 'the speed of shock'—making dramatic moves so quickly that opponents can't organize response—this is why he leads negotiations by 'throwing grenades' and creating chaos before walking in to offer deals as smoke clears

“from my observation of him much of it self-described listening to him talk uh you know he says like when he starts a negotiation the first thing he likes to do is open the door toss her grenade in wait for it to go off and then walk in as the smok's clears right so he generally comes starts with the stick but is hoping to get you to agree to a nice big juicy carrot at the end of it”

Investors and analysts who do not incorporate geopolitical analysis into their models will likely face catastrophic losses, while those who understand the mercantilist framework and anticipate statecraft-driven repricing will have opportunities to profit.

“if you are not using any of the readings that I've done for decades...but they are in a professional role telling you what to do with your money that maybe a little bit more caution would be required and that will already give you a great deal of protection”

Some financial analysts and media reports are completely ignoring geopolitical factors or merely using 'geopolitics' as a label without actual explanation, similar to a doctor saying 'biology' when asked what's wrong with a patient.

“there are lots and lots of reports out there in Market space which are just not mentioning any of this or mentioning it and just saying the word geopolitics which I think I've joked to you before is like going to see your doctor and you say what's wrong with me I've got this this this problem and he says biology you know that that doesn't actually explain to you what's happening or what you need to do what the treatment is right”

Marx was wrong about value extraction; he claimed that paying workers $3 on a $5 sale meant the capitalist stole $2, but increased productivity can allow everyone to win simultaneously; however, this logic doesn't apply as cleanly to controlling commodity supplies in global value chains

“I can make an argument and I do that colle Marx was wrong about Marxism when he said you know if you if you pay if you sell a product for $5 and you pay your worker $3 you stolen $2 from the worker that's basically Marxism in one one bullet point he was wrong about that you can increase productivity and everybody can win so mark That's Mark dealt with right you don't deal with it so easily on the value chain because this is true if you are basically getting your Commodities cheap you can sell cheaper to everybody else or you can make a higher profit if the commodity seller is selling the commodity High everybody else gets you know higher inflation”

A sovereign wealth fund model can be implemented in the US by leveraging unmoneized federal assets, borrowing against them, and deploying the capital into areas of national security importance that markets won't fund themselves, creating a multiplier for the broader economy through increased tax revenue.

“what they don't understand is that the US federal government still has a lot of assets which have not been monetized so obviously what they're going to do is try and borrow against those leverage it up and then take that capital and spend it where they think it needs to go again for National Security or these are the areas that the markets won't go into themselves”

America could offer Canada economic incentives including significant investment in east-west corridors within Canada (via sovereign wealth funds), favorable trade deals, and military protection in a formal alliance, making integration attractive rather than purely coercive, though such carrots are currently not on the table.

“in theory using the economic statecraft toolkit which I keep referring back to yeah absolutely you can offer uh lots of investment via this you know farcraft Sovereign wealth fund to say right we'll help build East West corridors within Canada... it's a Goodwill gesture um and at the same time the military one is a vital one”

Greenland is a slam dunk acquisition target for America because it has substantial undeveloped resources, only 60,000 people who could be incentivized to vote for independence and integration, strategic Arctic positioning, and the US could afford to make Greenlanders significantly wealthier without breaking the budget relative to other government spending.

“Greenland seems sort of like I'm going to put that in the slam dunk category like if we could strike a deal that worked for everybody why wouldn't you do it... there are so many ways that could be done... it's a massive it's a massive land mass with lots of resources only 60,000 people on it if we can find some way to make those 60,000 people happy why wouldn't we to get the both the resources and the Strategic positioning”

As America embraces mercantilism and everyone globally sees this working, other countries are forced to adopt the same playbook because there's no viable alternative; Europe is now pursuing industrial policy with Buy European provisions and attempting to control upstream critical commodity supplies in third countries, a move toward mercantilism driven by competitive necessity.

“because there's nothing else you can do... China's on mealy you can carry a small mechanist in your pocket... once you're a giant like China... you want it to be higher you keep trying to grow your exports... the world is full of your stuff and of course people will push back so if America is now pushing back against China and Everyone by the way although again the question is is it everyone... everyone will follow now Europe just this week has announced... they're going to go for something called the clean uh new industrial deal... that is going to be saying okay we're gonna have Buy in Europe Provisions”

The most likely long-term resolution to universal mercantilism is a negotiated return to spheres of influence with territorial carve-outs negotiated bilaterally (like Cold War cocktail napkin deals), where countries rearm heavily to maximize their negotiating position and then settle on mutually acceptable spheres rather than engage in actual military conflict.

“I think everyone would prefer to avoid that so if push comes to shove I think everyone will now rearm like stink which they are going to do to try and make sure that when they go into that negotiation they get to write a number down on a cocktail napkin that they like... I'm I'm taking the upside which means we don't actually have a war risk but we do have all that reflation change of GDP structure to what is GDP for”

A cynical reshuffling of winners and losers rather than fundamental system change could occur: existing corporate elite is displaced in favor of a new elite closer to Trump administration (e.g., Elon Musk), similar to what happens in emerging markets when a new faction takes power.

“what we could see at a high level is a re shuffling purely hypothetical a reshuffling from one set of previous you know let's say them win let's use the term winners to a new set like for example I saw a headline that you know Trump's thinking of no longer using a certain American Aviation company because they're proving slow to deliver Air Force One and is leaning towards Elon Musk so okay surprise surprise it might be time to go long companies that that friendly with the new Elite”

The concept that Europe could accept Chinese peacekeepers in Ukraine would represent a massive geopolitical defeat because it would place Chinese troops on European soil in a context where China has been explicitly aligned with Russia, yet some European policymakers are apparently discussing this possibility.

“for example there are people in Europe saying well we can always deal with China yeah sure deal with China um... some smaller countries possibly but you know... you can make the argument as a parallel that you know some people are talking about Chinese peacekeepers in Ukraine which would be staggering if true if if Europe is prepared to acceed to that and have Chinese troops on the European Mainland you know when when China has so clearly been standing alongside Russia in this and think that's a neutral party then uh yeah then then Europe really doesn't understand geopolitics at all”

The 19th century Monroe Doctrine may be the most likely Trump grand strategy: the Americas become American spheres of influence (including Greenland and potentially Canada), Europe is told to defend itself (rearm to 5% of GDP) while buying American weapons and potentially paying for US bases, and Russia is told to focus on Europe while China is identified as the primary competitor.

“I suspect it's a the Mon Monroe Doctrine as in the Americas are American again which is going to be very unpopular in Canada and Mexico and Greenland and uh you know lots of other locations and then B using that power base and utter utter raw real politique telling Europe you're going to get on side”

Trump's core proposal to use the Defense Production Act to drive down oil prices is realistic and could offset inflation from tariffs, because energy is a critical input and subsidizing domestic oil production through Defense Production Act authorization would be consistent with national security statecraft.

“Trump will do everything in his power to get oil prices down... in the short term that may be more difficult to do but in the medium term that could be done um and again there will have to be statecraft used... the trans Alaskan Pipeline you have there was no Market case for that that was built using economic statecraft the defense production act your your LG industry was largely developed with funds from the defense production act so there's nothing at all to stop Trump using the defense production act again”

Europe discussing the possibility of accepting Chinese peacekeepers in Ukraine would be catastrophic sign that Europe does not understand geopolitics, given China's open alignment with Russia.

“for example there are people in Europe saying well we can always deal with China yeah sure deal with China um so on one level I don't think that China wins scenario is as realistic as people portray it...if you look at the US history...Chinese peacekeepers in Ukraine which would be staggering if true if if Europe is prepared to acceed to that and have Chinese troops on the European Mainland you know when when China has so clearly been standing alongside Russia in this and think that's a neutral party then uh yeah then then Europe really doesn't understand geopolitics at all”

Trump's current administration is employing a mercantilistic approach, but the precise grand strategy remains unclear: is it 'America alone' (high tariffs on everything, breaking NATO and Western alliances), or is it Monroe Doctrine-based (Americas as US sphere), or is it building a gang of core Western allies against China?

“is Trump talking about America alone not just America first but America alone where everything from the entire rest of the world will be very highly tariffed um breaking up the Western Alliance as a result uh breaking up NATO uh breaking up every International Organization uh and just sitting there you know pretty with High inflation for a while...or is it America plus a group of core allies versus China and Russia or is it basically saying okay we're going to go back to the mroe doctrine again”

Evy believes the likely outcome is NOT war but rather a rearmament race where all countries stockpile military capacity to improve their negotiating position, followed by explicit spheres-of-influence agreements, avoiding kinetic conflict but reshaping the global order into regional blocs.

“I don't think anyone actually wants to fight a war...but I think everyone would prefer to avoid that so if push comes to shove I think everyone will now rearm like stink which they are going to do to try and make sure that when they go into that negotiation they get to write a number down on a cocktail napkin that they like so I'm I'm taking the upside which means we don't actually have a war risk but we do have all that reflation change of GDP structure”

Russia, despite severe blows during the Ukraine war and demographic damage, will emerge with new territory and may face normalization by the US (readmission to G7, removal of aggression condemnation), positioning it higher geopolitically if it retains conquered lands.

“Russia suffered some severe blows um and some of them may even be permanent given the de demography of the country but if it emerges from this with a lot of new territory which does seem likely and if as we saw overnight America is saying it wants it readmitted back into the G7 in fact that as I'm speaking to you now America would not condemn Russian aggression as part of the G7 statement so it very much appears that Trump is laying out the red carpet um rhetorically to try and normalize Russia again”

Europe is announcing a 'New Industrial Deal' involving 'Buy European' provisions for the private sector and plans to control upstream critical commodities in third-world countries to retain value chains within Europe, directly copying China's mercantilist playbook.

“Europe just this week has announced we've seen leaks of a plan where they're going to go for something called the clean uh new industrial deal...part of that is going to be saying okay we're gonna have Buy in Europe Provisions not just for the government for the private sector...40% that's got to be made in Europe...Europe has sensibly said we need to get energy costs down...we're going to try and buy or control Upstream critical Commodities in third countries”

The Federal Reserve, under Jerome Powell, has been deliberately avoiding any mention of geopolitical statecraft or the concepts Evy is discussing, maintaining studied apoliticality even though geopolitical and political factors are now primary drivers of economic outcomes.

“I've listened to every one of Jerome Pal's press conferences for the past several years he has never uttered any of the concepts that you've talked about in this conversation no and I I don't think I mean it would have to be blind not to be aware it's going on they are still studiously apolitical”

The UK government is simultaneously planning to put boots on the ground in Ukraine to maintain European security architecture while also directing state investment bank funding toward the creative industries (interpretive dance, video games), showing confused industrial policy that misaligns means with strategic ends.

“in the UK where it's muddled is that the sectors they're choosing are all over the place and one of them is the creative Industries...can the UK right now to put it in context and I I hope we'll discuss this in a moment too is contemplating trying to put boots on the ground in Ukraine in order to achieve some kind of stability in the European security architecture...at the same time you know the finance part of the economy the chancellor of the exer as we call it in the UK they're saying we need more interpretive dance”

Trump's tariff strategy can be compatible with reciprocal tariffs and negotiated deals (like offering carve-outs to Brazil in exchange for supply chain substitution) rather than universal tariffs, which provides flexibility and allows for statecraft-based incentives rather than blunt weapons.

“and of course this is in contradiction to a universal tariff or it's not in contradiction to a reciprocal tariff excuse me frog in my throat it's not in contradiction to a reciprocal tariff um and maybe the other player you know can reduce their tariffs and then you can find some kind of deal so Trump is opening the door to that and he has even alluded to it visa Canada when he said if you were American you wouldn't face tariffs at all”

For regular citizens of the US, day-to-day life will likely continue unchanged despite dramatic geopolitical headlines and market moves, but for people living in Eastern Europe, the Baltics, Ukraine, and around potential flashpoints, these changes are existential.

“if you're in most of the United States or almost all of the United States I think day-to-day Life Will Go On exactly the same for you even if you do see you know dramatic headlines...but imagine if you're living you know on the fringes of Eastern Europe right now imagine if you're living in the Baltic states...imagine if you're living in Ukraine there are you know lots and lots of people for who this really is existential”

The Euro has strengthened and European stocks have risen despite existential questions about European defense and sovereignty, representing sharply odd and ballsy market pricing that ignores long-term viability questions in favor of short-term narratives.

“the Euro's gone up and European stocks have gone up and there may be micro Arguments for each individual stock...when you're talking about will this thing be around in 10 years in the form it is now it's an incredibly ballsy view to turn around and say absolutely I'm buying that right now versus versus the currency you know the US which is clearly whatever happens going to be either Global hegemon or Primus interpares”