The Global Economy is Experiencing Converging Waves of Chaos
A discussion with Michael Every, Market Strategist, Rabobank
The general sat, and the lines on the map moved from side to side, Roger Waters.
Today, the lines on the map are increasingly disrupting the traders’ lines on the screen, and investors are becoming unnerved.
Lines on the map and on the screen.
Michael Every lived in post-communist Russia’s TraumaZone and, as a young man, experienced the hollowed-out remains of post-Soviet Central Europe. He learnt that when a regime fails, the ship doesn’t right itself. It breaks apart.
More recently, he worked in investment banking, where market traders’ lines on a screen are their comfort blankets when managing market risk. But for those who have experienced the stomach-shrinking reality of a collapsed empire, it is the lines on the map that move. Today’s collision of markets and geopolitics has just raised the stakes. Risk has become radical uncertainty, and market participants need to adapt or die. Michael has some clear views on whether the average monitor of Bloomberg headlines is up for the challenge.
He thinks that neoclassical economics, the secular Bible of mean reversion, no longer works. The belief that no matter how violent the storm, things will eventually return to a natural state of equilibrium, he says, is just silly. The old comforting creed always was, according to Every, a delusion.
Modern finance’s accepted creed is that disruptions are temporary blips on a spreadsheet. Yet the graphs and charts used by the wonkish priesthood are fundamentally broken, ignoring the one thing that truly moves the economic needle: raw power. Today, the lines on the map are increasingly disrupting the traders’ lines on the screen, unnerving investors.
Waves Matter.
Every believes that the old world is moving towards a messy, unpredictable collision of demographics, technology, and geopolitics. This wave can break in many different directions. Meanwhile, he points out that the market ignores what cannot be quantified, and it is now ignoring the convergence of Kondratiev waves, cliodynamics, and a Fourth Turning. These frameworks aren’t just intellectual joyrides, but maps for a world where the floor is falling out.
Given the complexity of the system we have around us... To presume it’s in an equilibrium is silly.
Michael’s view is uncomfortable for the modern economist, shaped by calm and stability. Every suggests that the return to the mean isn’t coming. There is no drifting back to the stability of 2019; we are being carried by a new riptide.
The Suez Mirror: A Superpower at the Crossroads.
History doesn’t just repeat; it rhymes, often with a vengeance. In 1956, the United Kingdom and France, the fading guardians of the old order, invaded Egypt to reclaim the Suez Canal. They were not defeated on the battlefield. They were marched home by runs on the pound and the franc, engineered by a United States that was ready to assert its hegemony.
Today, the U.S. faces its own Suez Moment in the Middle East, having entered a giant lobster pot in Iran. If the U.S. is forced into retreat by a combination of market instability and China, which has stockpiled commodities while the West has been largely asleep, the global template for our world order shifts permanently.
To help understand why China holds this leverage, it is worth looking at the historical analogy of Prussia vs France. When Prussia defeated France in 1871, the resulting shift in bullion didn’t happen because the Prussians became harder workers or the French became lazy. It was an accounting balance dictated by victory and policy. China’s trade surplus is not the result of Western over-consumption; it stems from a deliberate industrial policy of neo-mercantilism that the West has been too slow to counter.
If the U.S., the world’s policeman, is taken down a peg too far, Western privilege and wealth will evaporate, and we will realise, far too late, how much our standard of living depends on setting the global rules.
Guns, Butter, and the Death of the Free Market.
In Every’s view, the market era, where trade is dictated by price and efficiency, is dead. We are entering the age of Post-Post-Keynesianism.
Traditional Keynesians believe you can print money to fix any problem. Every argues that printing money only works if you have the seigniorage, the hard power to force others to accept your currency as the global standard. You can only print money if you have the weaponry to make them do it. It is a zero-sum reality that our prevailing economic belief system refuses to acknowledge.
While Wall Streeters obsess over when we’ll get a rate cut, China has built an industrial fortress, giving it a chokehold over the West’s critical supply chains. In Every’s film-buff view, this is the Star Trek Two reality where the needs of the many will outweigh the needs of the few. We are shifting toward National Capitalism, as articulated by Craig Tindale, in which state intervention becomes the only way to survive.
The Great De-financialisation: Putting the Tools Back in the Box.
The West has increasingly treated the stock market like a hobby. We’ve lived through a period of hyper-financialisation where having a flutter on an FX app is seen as a legitimate way to build a life. According to Every, that era could be ending.
Consider the 1980s bank manager. In that era, a mortgage was a sober, civic-minded affair, three and a half times your salary, with a 5% deposit that took years to save. Contrast that with the pulse-check lending pre-GFC, where if you had a heartbeat, you had a loan. In Every’s view, the West’s frivolous relationship with its capital is over.
We are moving towards capital rationing: the state will increasingly channel savings towards public goods, such as defence, re-industrialisation, and supply chain, rather than private speculation. A period of financial repression.
We will assimilate the mantra from Beijing that houses are for living in, not for speculation. Speculating on assets will become as socially unacceptable as gambling once was under historic religious orthodoxy.
AI and the New Feudalism.
Artificial Intelligence is not the utopian productivity engine of the Silicon Valley brochure. It is, in many ways, the ultimate brain rot. We are witnessing cognitive damage as younger generations lose the ability to think or create without a screen.
Economically, AI creates a reserve army of labour that threatens to hollow out white-collar roles. This presents a haunting paradox: who will have the purchasing power to buy the products? Without a radical new political economy, we risk a New Feudalism in which a tiny elite controls technology while the masses become redundant. This sorting effect is a brutal divide between those who can navigate this transition and those left behind.
Preparing for the Worst, Hoping for the Best
For Every, this sorting effect is not a temporary adjustment; it is a structural shift. The old structures of the past forty years have dissolved. We are caught in the break in a confluence of waves, where everything changes violently.
We are moving into an era where we may no longer be required to think or produce in the ways that have defined the human experience for millennia. We must ask a question that no spreadsheet can answer: In a world where the traditional roles of worker, speculator, and manager are being erased by technology and economic statecraft, what remains of the human soul?
Is humanity about to enter a Marxist utopia of higher-level self-actualisation? Or are we about to become the dormant houseplants of the machine? Michael Every leaves us to ponder this one. His job is to take us on a wild ride through the possible outcomes of our radically uncertain world, with its heightened insecurity. It is our job to decide how to risk-weight it and respond.
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Thanks for reading
Jeremy
