The Frontier

Michael Every states US efforts to reinvent itself and counter China are the primary global driver, evidenced by Trump's Asia tour securing rare earth and shipbuilding deals with Japan and South Korea.

Every argues the recent Trump-Xi meeting resulted in a temporary ceasefire for rearmament, not a lasting G2 partnership, forecasting a year-long interregnum before renewed US-China competition.

Every highlights recent escalations: China announced rare earth export controls tied to military use, the Dutch seized Chinese chipmaker Neria, and three EU oil refineries processing Russian fuel suffered mysterious explosions.

Every notes the US has restarted nuclear tests and discussed regime change in Venezuela, while Trump suggested potential moves on Nigeria and Mexico, signaling a shift toward military statecraft.

Every cites the European Commission's proposed green tech policies, including 'made in Europe' rules for public tenders covering 14% of GDP, capital controls on FDI, and tariffs to support key sectors.

Every argues US economic vulnerability stems from decades of offshoring production, leaving it weak in areas like rare earths and pharma, forcing a difficult decoupling from China while still needing its exports.

Every claims US power lies in controlling the financial system, high-end chips, software, and aircraft, and can physically disrupt China's commodity flows from regions like Africa and Latin America.

Every forecasts the US will use capital controls to direct foreign investment into strategic domestic sectors like rare earths and shipbuilding, moving from a free market 'jungle' to a managed 'safari park'.

Every predicts dollar stablecoins will become a key geopolitical tool, allowing the US to reshape financial architecture and reindustrialize by regaining control over offshore dollar flows.

Every sees AI as both inflationary for power and resource demand, and deflationary by replacing jobs and potentially leading to universal basic capital, while its ultimate military application could wipe out corporate value.

Every expects bifurcated commodity prices between Western and Eastern blocs, creating arbitrage opportunities alongside illegal gray markets, mirroring Cold War dynamics.

Patrick Sesna presents a pairs trade to fade South Korea's AI-driven rally, going long the Nasdaq 100 QQQ and short the iShares MSCI South Korea ETF EWY, citing narrow concentration in Samsung and SK Hynix and geopolitical risk.

Eric Townsend views current inflation as secular and in early stages, which is initially positive for equities, while Patrick Sesna notes weak market breadth with only 40% of stocks above their 50-day moving average.

Townsend sees a technical buy signal in gold similar to August's pre-rally setup, while Sesna expects a potential bottom this year with a break to new highs likely in 2026.

Townsend notes uranium is consolidating after positive news flow, with the systemic risk being an unwind of the AI trade, while Sesna observes heaviness in the URRA ETF after its six-month bull run.