Michael Every Says the Old American System Is Being Spit Out and a New Empire Like Structure Is Forming
Rabobank strategist Michael Every told Commodity Culture that the world is leaving the post Cold War order the United States built and then abandoned. The system of unlimited free trade, free movement of people and goods, and financialization of nearly everything is ending because it no longer served American interests.
“Clearly, we are exiting a system built by the US over many decades, which it thought would suit it, and which didn’t, and which is now rejecting, spitting up, which was a unipower for a while, and which presumed that globalization and free markets, free trade, free movement of people, free movement of goods, and the financialization of almost everything would produce unlimited peace and prosperity. And of course, anyone who’s read history would tell you that was aberrant nonsense.”
Every rejects the idea that the American Empire is collapsing. He argues the opposite. The period of pure markets first globalism is what is ending. What comes next is closer to the beginning of a more traditional empire. America is looking back to its 19th century and pre World War II playbook while China uses a mix of ancient statecraft and the old American industrial playbook. The real contest is control of physical supply chains, not consumer demand or housing markets.
On the dollar he sees possible reinvention. “We will see a reinvention of the dollar, a rehypothecation of the dollar, a reframing of the dollar, if you will, alongside a more empire like structure.” Differential rates, an onshore and offshore dollar, or other workarounds are possible if the current architecture fails.
Every is skeptical that gold will replace the dollar system anytime soon. Central banks are accumulating it, he says, but mainly as a portable way to hold dollars offshore. “You can’t really do much to other people’s gold without banning gold… And at any point, you can just sell them for dollars. So effectively there are another way of holding the dollar offshore.” He sees no realistic infrastructure yet for gold to function as everyday settlement. A U.S. revaluation of gold reserves, if it happened, would mainly raise money for military spending, not restore a gold standard. With wars, social spending demands, and massive debt, he asks, “In what world do people think we’re going to go back on gold with a fiscal straight jacket?”
China will not price the world in physical gold either, in his view. Contemporary China is neo mercantilist, not classical mercantilist. It wants factories, steel, guns, and control of supply chains more than gold bars. Its debt load is already enormous and its power comes from trade surpluses and industrial dominance, not specie. Energy, not gold, sits at the center of the new competition, with conflicts around Iran and Europe illustrating the point.
The transition will be messy. Markets can crash and recessions can deepen while the new structure is built. The old globalization story is finished. What replaces it is still being decided by the two powers that control the most critical physical supply chains.
