Michael Every: Stablecoins Are the New Petrodollar

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I've been reading Michael Every's research for years. His work at Rabobank sits at the intersection of geopolitics, macro, and the physical economy in a way that almost nobody else is doing. When he put out his "reverse perestroika" paper at the start of this year, his framework for understanding Trump's second term as a systematic dismantling of the post-Cold War order, mirroring Gorbachev's reforms in reverse, it genuinely shifted how I interpreted everything that followed. That piece is the lens for this whole conversation.

The core of Every's read, and mine too after spending an hour with him here, is that most people are still navigating the world using a map drawn over the last 50 years. That map is wrong now. The institutions, pricing models, and geopolitical assumptions built on US-led neoliberal globalism are all being stress-tested simultaneously, and the people who haven't updated are going to keep being blindsided. Every walked me through what he sees as the rewiring in real time: stablecoins as a dollar-extension mechanism, the physical constraints on reindustrialization, China's genuine strengths and its hidden Achilles heels, and a second half of the year that looks uncomfortably volatile.

The thread I kept pulling on is this: the Genius Act is the legal scaffolding for replacing the petrodollar with a programmable, T-bill-backed dollar instrument. Whether that works or collapses is the highest-stakes financial experiment of the decade. This is what we got into.

Key takeaways

• The post-WWII framework is functionally over. Every institution and pricing model built on 45 years of neoliberal globalism is in question at once. Most market participants are still navigating by the old map, and that's why they keep getting caught off guard.
• Stablecoins are the US bid to replace the petrodollar. The mechanism Every lays out: T-bill-backed stablecoins issued offshore, with a yield differential engineered to be higher abroad than at home, generating potentially trillions in annual demand for US short-term debt while projecting dollar power into economies where local currencies are failing. The Genius Act is the on-ramp.
• The needle being threaded is almost impossibly thin. Every puts a 2-in-3 chance the US threads it and a 1-in-3 chance of dramatic failure. The outcomes are so different from each other that standard financial market spreads don't come close to pricing the actual risk.
• The real constraint isn't capital, it's physical. Refineries, copper, grid capacity, drone blades. The US can issue T-bills and stablecoins, but it can't print diesel or electrify AGI compute without the atoms. Ten years in Bitcoin mining gave me a direct read on how badly the grid outside of ERCOT has been underinvested.
• China's real cards are in the physical, not the financial. Its manufacturing complex, energy infrastructure, and demonstrated ability to cut oil consumption are the cards it actually holds. The fiscal situation behind the firewall is arguably worse than America's, but the US can't use financial muscle against a ring-fenced system.
• Bitcoin wins regardless of which path the US takes. In a world where every central bank is racing to devalue, where stablecoins dilute the Fed funds rate into offshore buckets, and where structural inflation is baked in by geopolitics, the fixed-supply permissionless asset is the only instrument that isn't being debased to fund a war or a reindustrialization project.

The Map Is Wrong, Why the Last 50 Years Don't Apply Anymore

Every opened by doing something I want to try to replicate here, which is a two-minute scattergun through the headlines of a single morning that all feed into the same thesis.

AGI announcement from OpenAI. Putin gesturing at peace in Ukraine that everyone close to it reads as cover for mobilization. An Iran "pause" that Every thinks is exactly what it sounds like, a pause. South Korea reportedly considering sending forces to Hormuz. An Australian op-ed calling for negative immigration, not lower immigration, negative.

And a Netherlands government policy paper from the WRR, the Scientific Council for Government Policy, arguing that Europe is caught between the US and China with no good options, and laying out three paths: push for a China Plaza Accord to drive the renminbi down to around 3 or 4 to the dollar, mirror China's policies one-for-one including having the ECB actively weaken the euro, or put tariffs and capital controls in place to match Chinese mercantilism directly.

A centrist Dutch government policy body is now seriously putting those European options on paper. That's the tell. The ideological superstructure of the last 45 years is coming apart and the cracks are showing in places that would have been unimaginable five years ago.

My framing going in was exactly this. The Trump administration's November national security strategy document pointed squarely at hemisphere-first, no foreign entanglements, Monroe Doctrine revival, reindustrialize at home. Then Iran pops up in February and it's a complete inversion of that.

Every's read is that Iran was always on the target list, just ideally later, after the midterms, with more munitions and more planning. But you don't always get to pick your moment, especially if Israel was already moving toward striking Iran independently and the intelligence on Iran's nuclear progress was more alarming than advertised.

The point that stuck with me: you can't just build the Monroe Doctrine in the Western Hemisphere if you've ceded the Middle East to the Russia-Iran-North Korea-China axis. Oil, and particularly diesel and refined products, still run the physical economy everywhere. Whoever controls that geography controls a veto on everything else. That's why they're there.

You can read more about how the post-WWII order is fracturing and what it means for markets in a piece we ran drawing directly on Rabobank's framework.

Stablecoins as the New Petrodollar, How the Dollar Gets Rewired

This is the part of the conversation I found most important, and I want to give it real space because the mechanism is the whole argument.

I've been following Tether since it launched out of Bitfinex. When Paolo Ardoino and Giancarlo Devasini and the team there started it, by Every's own framing and my recollection from following it closely, nobody thought it would crack a $100 million market cap. It was a convenience instrument for crypto traders who needed a dollar equivalent on exchanges that couldn't access the banking system cleanly.

Now it's a piece on the geopolitical chessboard. That shift is genuinely staggering to me, and I've been watching it the whole time.

Here's Every's mechanism, translated into plain terms.

The US issues dollar stablecoins backed by T-bills. Offshore, in emerging markets, in countries where the local currency is deteriorating, demand for a dollar-equivalent you can hold on your phone via a VPN and not have the local taxman see is enormous. The US engineers a yield differential, higher effective rates on dollar stablecoins abroad than on domestic dollar instruments, which Every says will have to be called an "incentive" rather than a yield under the Genius Act's construction, but the economic effect is the same. Demand for those stablecoins means demand for the T-bills backing them.

Every's estimate is that this could generate a couple of trillion dollars of investment annually into US short-term debt. That funds the Pentagon. That funds a significant chunk of the budget deficit without the long end of the yield curve blowing out.

The next step is the petro-stablecoin pivot. The US offers nuclear technology, security guarantees, or other quid pro quos to Saudi Arabia, Qatar, and other Gulf producers. In return, they accept payment for oil in dollar stablecoins rather than conventional petrodollars. That's not actually that different mechanically from the petrodollar system, but it's programmable, it's controllable, and it routes demand through a US-governed instrument rather than the eurodollar system that the US doesn't fully control.

It's a gun-on-the-table moment for any country that exports to the US: you either plug into the stablecoin system or you're out. Very high risk, very high reward.

The third leg is domestic. Every's read is that large US banks don't lend into the real economy in any meaningful productive sense. Stablecoin-backed smart contract financing, directed through new mechanisms into critical minerals, drone technology, and defense-adjacent manufacturing, could be the bridge that gets commercial capital moving in the direction the executive wants. This is the signal I see in the equity stakes the administration has been taking in critical mineral companies, not nationalization, but a seat at the table, a vote against offshoring, and a demand signal to the banking system about where to deploy.

Major European central banks have already flagged that a successful US stablecoin rollout could trigger capital flight from emerging markets and from Europe itself. The ECB's admission that central bank money may need to go onchain to remain relevant reads differently once you understand what the US stablecoin play is actually designed to do.

The question I pushed Every on: can the market cap get big enough, fast enough, to actually support geopolitical-scale liquidity needs? His answer is that it's not purely a market mechanism, it's a statecraft mechanism. If the US uses state power to accelerate adoption, nothing succeeds like success and momentum builds on itself.

But it either goes very, very well or very badly. There's not much middle ground in a bet this size.

Economic Statecraft, Equity Stakes, Critical Minerals, and the Wartime Capital Signal

Scott Bessent said in a July 2024 speech at the Manhattan Institute that he believed there was a grand economic reordering underway and he wanted to be in the captain's seat alongside the president as it unfolded. That framing is what I keep coming back to when I look at what the Treasury has actually been doing.

The moves on the monetary side have been deliberate and relatively fast by the standards of how these things normally move. T-bill issuance up, long-end management, the Genius Act as the stablecoin on-ramp. The Clarity Act is a separate instrument with different implications for broader crypto market structure, they're not the same thing, and conflating them misses what each is actually designed to do.

What I flagged to Every is what I see as the WWII-footing read on the executive equity stakes in critical mineral companies. Taking a 10% stake in a company producing something the US needs for defense and reindustrialization, and having a government representative at the table when they're deciding whether to shut US plants and move production to China, amounts to a veto right. Every confirmed this is exactly how he reads it. More phone calls, more golden shares, more deliberate stakes.

The point isn't to monetize on the way up, though he noted this is America and everyone wants to make money. The point is representation in the room when decisions get made that determine whether American productive capacity survives or gets offshored again.

The 45-year lull wasn't just complacency. It was a system that made a lot of people extremely rich by not doing this. Those vested interests don't quietly step aside.

Every's honest read is that reversing 40-plus years of offshoring and underinvestment in physical capacity is at minimum a ten-year project. This Trump term is just digging the foundations. You'd need another two terms after this to build something that actually holds.

The Physical Constraint, Energy, the Grid, and Why Finance Alone Can't Fix This

I've been in Bitcoin mining for ten years. Eight years ago, when Bitcoin mining started becoming prominent in the US, we were building out infrastructure across the country and it became clear very quickly that the grid outside of ERCOT in Texas, which operates as a relatively free market, is brittle. Critically underinvested for 50 years. That's not a talking point; that's direct operational experience from trying to interconnect industrial-scale power loads in states that simply don't have the capacity headroom to absorb them.

That grid reality is now the constraint on the AGI buildout. Every's point is that the physical limits bind regardless of what the financial system does. You can have a $2 trillion company on paper. You can print T-bills. You can issue stablecoins. None of that produces copper, or nickel, or the large-blade turbines Elon Musk flagged as being in short supply, or the refined diesel that everything in the physical economy still runs on.

Every's structural inflation framework is the clearest version of this I've heard. You get lower energy prices through one of three paths: demand collapse somewhere (stagflationary, ugly), new refineries coming online (a 5-to-10 year build at minimum, not happening in this cycle), or winning kinetically against Iran and Russia and restoring energy flows on your terms. There is no financial engineering that substitutes for those three options. The Fed can manage the MOVE index. Refining crude oil requires refineries.

That's the same framing I bring to the AGI compute question. The benchmark numbers coming out right now are extraordinary if they're real. But the question of whether the US has the electrons to run AGI at scale is still genuinely open. The "bring your own generation" model, natural gas turbines co-located with data centers, not connected to the grid at all, is one answer.

American entrepreneurial ingenuity is real and it's reinvigorated right now in ways that make me more optimistic than the grid statistics alone would suggest. But it has to actually happen. You can't model your way around the atoms.

The PwC projection of $31.6 trillion in AI data center capex through 2050 makes the power constraint argument for me better than I can.

China's Hand, Strengths, Achilles Heels, and the Standoff

The thing I kept pushing Every on is that China gets labeled "communist" in US media coverage and then people stop thinking. But if you've ever actually worked with Chinese people, they're some of the most capitalistic people you'll encounter. The label obscures more than it reveals.

Every's read on China's actual position: enormous strength where it matters, which is the physical economy. Manufacturing dominance, a domestic energy buildout that is genuinely staggering to look at in chart form, and a demonstrated ability to adapt faster than Western observers expect.

The moment that crystallized this for me is what Every described as China's response when the US thought it could use Hormuz access as financial pressure: China demonstrated it could cut oil consumption by millions of barrels per day, by Every's estimate, because its economy is now electrified enough to flex that muscle. By his reckoning, China holds roughly a year's worth of strategic petroleum reserves as additional buffer. That is a credible standoff.

At the same time, the picture behind the firewall is not what the top-line manufacturing dominance suggests. By Every's read, and he's explicit that China's data opacity is rising, so these are estimates, around a third of Chinese companies are now losing money on their exports, propped up by subsidies. The fiscal situation is arguably worse than America's.

And the automation wave that made China's manufacturing so efficient is now rolling through its own labor market. The Washington Post, he noted, reported that something on the order of 350 million Chinese workers could be pushed into gig work within the next couple of years as factory automation accelerates. Karl Marx's own argument about automation undercutting the consumer base is playing out inside the world's largest manufacturing complex.

China's physical strengths are real. But the US can't use its financial muscle against a system that is deliberately ring-fenced. Both sides have genuine strengths and genuine vulnerabilities that the other side can't easily exploit. Every's 2-in-3 / 1-in-3 framing is his probability on the US threading it, not mine to endorse or dispute, but worth sitting with.

Iran, Ukraine, and the End-of-Year Risk Calendar

Russia is openly saying it will back Iran. That's not a surprise if you've been paying attention, Iran supplied the Shahed drones that have been striking Ukrainian cities, Russia has helped Iran with targeting of US forces in the region, and the two have a clear mutual interest in tying down American attention across multiple fronts simultaneously. Every's 2018 paper sketched out exactly this kind of multi-front pressure scenario. The coordination across the axis is getting tighter even as Western coordination is getting looser.

Every's base case for the rest of the year: post-midterms, the US escalates against Iran again, because the economic war is working but needs a push, and Iran is likely to try to escalate first anyway if the economic pressure is biting hard enough. On Ukraine, the risk is that Russia escalates before winter, not just more missile strikes, but gray zone operations against European infrastructure or even a provocation against NATO's eastern flank to test whether Article 5 is real. A tactical nuclear demonstration somewhere over Ukrainian territory, Every notes, is something analysts are now discussing, not as a likely outcome but as a tail risk that can't be ruled out if Russia's oil refineries keep taking hits.

There are also rumors, Every presents them as rumors and so will I, of a Putin-Trump-Xi meeting at APEC on November 19th. If that happens and produces anything meaningful, it reshapes everything. If it produces nothing, the market reads it as confirmation that no deal is coming.

The midterms tighten the administration's room to maneuver on all of this. Executive orders become the primary instrument whatever the result, since Congress has been delivering very little. I've been writing about how the midterm dynamics are affecting Trump's ability to execute, that piece has more on the political constraints that Every is pointing at from the macro side.

Europe Has No Pull, And Knows It

I'll say it plainly: Europe built its political economy for an idealist neoliberal pacifist world that doesn't exist anymore. It has no meaningful pull with China, no meaningful pull with the US, and it decommissioned the energy infrastructure that would have given it at least physical independence.

Maybe you shouldn't have decommissioned all those nuclear and coal power plants. I said it to Every and I'll say it here.

Every's read is that the pressure is building inside Europe in ways that are visible now at the policy level, the WRR paper is a good example, but the structural problem with 27 countries where any one can veto just about anything is that you can't get the speed of response that this moment requires. Offsites, working groups, and grand speeches aren't going to close a trade deficit with China that is, by Every's reading, now larger than America's.

The specific watch item he flagged: October, when Europe is supposed to tell China whether it will start a trade war over that exploding trade deficit or not. If Europe actually pulls the trigger on tariffs against China, that snowball becomes an avalanche because the downstream moves are enormous. If it blinks, again, then Every isn't sure what it has left. The Dutch central bank moving gold out of the US is a small but legible signal of how European institutions are quietly repositioning for a world they don't fully control.

Van der Leyen's push to mobilize European household savings into the European economy is real but runs into the same coordination problem. Mark Carney appearing at the European Parliament is a tell about where Canada thinks its longer-term alignment interests might have to shift. None of it adds up to a coherent European response to what Every is describing. Not yet.

About Michael Every

Michael Every is a Senior Global Strategist at Rabobank, where he covers global macro, geopolitics, and what he calls economic statecraft, the deliberate use of financial and economic tools as instruments of national power. He publishes the widely read "Daily Research" notes that have developed a following well outside the traditional financial research audience. He is based in Hong Kong and has lived and worked across nine countries. His "reverse perestroika" paper, published in early 2025, is available through Rabobank's research distribution.

Sources mentioned

• Rabobank: The Post-WWII Order Is Gone and Central Banks Can't Fix It (TFTC): background on Every's broader research framework and how it maps to current macro
• ECB Admits Central Bank Money Must Go Onchain to Survive (TFTC): European central bank acknowledgment of the stablecoin competitive pressure Every describes
• Dutch Central Bank Moves 86 Tonnes of Gold Out of US Citing Geopolitical Risk (TFTC): European institutional repositioning signal
• PwC Projects $31.6 Trillion in AI Data Center Capex Through 2050 (TFTC): the power-constraint argument for the AGI buildout
• Mark Mitchell: Trump Is Throwing the Midterms (TFTC): the political constraints Every points at from the macro side
• Bitcoin Stocks Decouple From Wall Street as Hormuz Talks Collapse (TFTC): current Hormuz situation context

Watch the conversation

Timestamps

• 0:07 - Bitcoin wins in a devaluing world
• 0:34 - Intro: why the old map is wrong
• 2:39 - Iran, Ukraine, and the morning's headlines
• 11:13 - Russia backs Iran, bloc-based geopolitics
• 34:50 - Can the US reindustrialize in time?
• 43:14 - Physical constraints, MMT critique, and the yield curve
• 47:42 - Monroe Doctrine vs. the Middle East
• 55:07 - End-of-year risk calendar and the midterms
• 1:02:24 - Europe has no pull

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