June 23, 2025 • 11 mins
Rabobank Global Strategist says Trump isn’t as “nutty” as people may think he is, as there can be upsides to trade wars and geopolitical crises.
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Episode Transcript
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Speaker 1 (00:00):
Buckle yourselves and folks, Michael every Rabobank Global strategist Michael,
I love you having on the show, having you on
the show. We're based out of Dunedin, and I do
joke that after chatting to you, I want to climb
to the seventh floor of the Westpac building and jump,
because you always have me worrying about the state of
the world, and I'm thinking, with what's happened in the
(00:21):
past week, what are you going to come up with? Yet,
someone left your presentation this morning and I heard them
mutter on the way out after hearing you, maybe Trump's
not as nutty as people think he is.
Speaker 2 (00:33):
Good afternoon, Good afternoon. Lovely to be with you in
person for the first time I think doing this show
at least, No, he's not as nutty as people think
he is. And I would add neither am I. Um
And in terms of the jumping off the seventh floor,
I've often tried to make the point to you that
(00:54):
actually there's a really optimistic side to what I try
and get across.
Speaker 1 (01:02):
All Right, we're just maybe having some technical difficulties. Harve it.
We will battle on regardless. We've got a tech guy,
Bill Hayes. Are we on the job. Are we on
air team? We are on it. Let's just continue as
though that glitch never happened at all. So you carry on.
Speaker 2 (01:18):
In terms of jumping off of the seventh floor. A
message I've tried to get across repeatedly is it actually
there's a big upside to what's going on. So when
I describe some of these global events happening in the
background as I have been, I've always tried to say, yeah,
there are risks, but on the other hand, if things
turn out right, there's real sunshine on the other side
(01:38):
of it. And that's true for the trade war, that's
true for various different geopolitical crises we've had, and it's
absolutely true for what's going on right now in the
Middle East.
Speaker 1 (01:47):
You said when Trump was elected Trump two points zero
that this would change the face of how the world
does politics and it hers.
Speaker 2 (01:55):
Well, I mean that was a no brainer, to be honest.
I mean, if you look at what he was saying
he was going to do when he came into power,
the only question is would he actually deliver, and he
absolutely has. I mean, in terms of economic policy, there's
been a huge change. You can see trade policy has
been shaken up. Every domestic policy in the US is
being shaken up. And at the same time, primary focus
(02:16):
right now as we're talking is just in the past
few minutes we've seen more developments from the Middle East,
which again shake everything up.
Speaker 1 (02:23):
Well, he's declared a total ceasefire. You tell me the
Israelis are flat out bombing Tehran as we speak, and
vice versa.
Speaker 2 (02:30):
Well, Tehran's not bombing Israel right now, but oh sorry,
Iran isn't bombing Tel Aviv and Haife right now. But
Israel is still bombing Tehran.
Speaker 1 (02:38):
So when does the ceasefire come under play?
Speaker 2 (02:40):
Well, he said a while ago, he said in six hours.
They never announced them immediately, So both size traditionally in
the Middle East always try and bomb right up to
the last minute. So I would imagine you will get
more firing right until legally they're supposed to stop according
to this agreement, and then hopefully things can hold, at
which point what we were being told a few days ago,
(03:01):
which is this risk's World War III. This is an
absolute calamity. Now, those risks were there, to be clear,
but they were only what we call fat tail risks.
They were never the central risk instead touch would What
it appears we have got is a defanged or defenestrated
Iran which doesn't have a nuclear weapon, which is a
huge positive for the region and for the world, and
(03:23):
a massive demonstration of the reassertion of both Israeli and
US power in conjunction, which could open the door to
stability and peace.
Speaker 1 (03:32):
So this has been a huge diplomatic victory, potentially for
Trump using bombs.
Speaker 2 (03:38):
Yeah, that's how you sometimes get victory America.
Speaker 1 (03:42):
I'm just going to pick the eyes out of your
presentation this morning. You said America is essentially isolationist and
anti free trade, but certainly make America great again. It's
America first.
Speaker 2 (03:55):
What I said was historically America is a realist rather
than an idealist, and isolationist rather than internationalist. It has
periods where it tries to become more global and more
pro free trade, but we're currently reverting back to type
which is a more controlled trade. Now. I don't think
(04:15):
America is anti trade, but they're not interested in trade
where they import and don't export, which is what they've
been doing for a very long time. They want trade
partners who when they sell to them, will turn around
and say, well, I've just sold this much to you.
I've got these dollars in my pocket. Now I want
to buy something from you. That's what they want to see.
Speaker 1 (04:33):
Well, the other point you've made, and this is coming
to pass. I guess America wants to reindustrialize and make
stuff again.
Speaker 2 (04:42):
They do, that's the plan. Let's join the dots here.
They've just potentially brought, you know, peace to the Middle
East of a sort, as you said, with bombs. The
bombs that they used to achieve that. Reports are they
used twelve of them. We don't know how many they have,
but intelligen estimates but maybe only around thirty or forty.
They don't have a lot of them. They now need
(05:04):
to make more. So the whole point is, if you
want to have that Pax Americana of sorts, you need
to have the weapons, you know, to be used to
enforce it. And that's been America's problem. They haven't been
making enough of this stuff. They need to keep the
global system policed, if you will, so they want to
start reindustrializing a.
Speaker 1 (05:24):
Lot of us. Myself included of being dismissive of Trump's tariffs,
I think they're interventionalist and not good for world free trade.
We're a nation depending on world on the world and
some free trading. But you're saying tariffs are the way
of the future. We've almost gone back to the future
like it used to be.
Speaker 2 (05:42):
Well, tariffs were the way of the world forever up
until a few decades ago, where we decided that we
knew better than the totality of global economic history and
if we remove tariffs, everything would work out.
Speaker 1 (05:56):
Well.
Speaker 2 (05:57):
I mean, let me put a hypothetical to you. I
mean New Zealand. Obviously you're of fantastic producer of food
and a food exporter. What if there was a new
country that suddenly appeared on the map that could produce
everything that you do at a third of the cost,
because you know, they were using indentured labor, so whatever
trick of the trade they were using, and they were
flooding your market and every market you export to, and
suddenly you couldn't sell food anywhere. I wonder how free
(06:18):
trade New Zealand would be in that situation. So it's
always a question of where you sit in the relationship
that tells you how you feel about it. You're quite
rightly in favor of it because of where you sit now,
but that's not always true for everybody.
Speaker 1 (06:30):
Wanston Peter's there foreign a Faace monister said, we're in
the most the world was the most unstable it's been
since the Cuban Missile crisis of October nineteen sixty two.
Would you concur with that?
Speaker 2 (06:43):
We came close to that in the past couple of days,
where some of the rumored headlines out there about what
Russia might or might not do could have been an
echo in the worst case scenario, and I flagged it
at work, but I said, look, it's unlikely, but you
have to put it out there as a scenario, is
that Russia could have done what it threatened twenty four
hours ago, which was to send a nuclear weapon to Iran.
(07:06):
Let's say, for example, they put it in a cargo
plane and they say, this plane is flying to Tehran.
It's got a nuclear weapon in it. It's Russian. You
shoot it down. You're at war with us on a
nuclear level. But if it gets there, Iran's got a nuke.
What are you going to do? And it would have
forced a Cuban missile style crisis on America and Israel.
Thinking about it today, the former president Medvedev, who tweeted that,
(07:28):
said basically only joking, have no intention of doing anything
like that, So they completely blinked and walked it back.
Speaker 1 (07:34):
Does Russian a but player and the power play between
China and the US. They have the superpowers as Russia.
Russia is no longer a superpower.
Speaker 2 (07:43):
No it's not. It's super spoiling things. It can't build
very much, which is what you need to be a superpower.
But they're a super spoiler in that they can disrupt
other people's systems and they will always be powerful because
of their geography, their commodities, and then of nuclear weapons
that they've got. But that doesn't give you the basis
to build very much.
Speaker 1 (08:04):
One of the slides you put up this morning pertained
to New zealand our history. You went back to eighteen
forty the founding of our nation effectively, and you said,
from eighteen forty right through to nineteen forty one, the
beginning of the Second World War, we were a farm
for the UK and the British Empire. Are then post war,
(08:24):
until Britain entered the EU, we were a farm for
Mother England, for Britain. We became after that a farm
for Asia. You stopped at twenty twenty four. Who are
we a farm for? Now?
Speaker 2 (08:37):
Well, I put that question to Kiwis. But that is
the key question because there were two parts of that slide,
and you alluded to it. At the beginning. You were
a farm for the UK with the UK protecting you.
Then you were a farm for the UK with the
Americans protecting you. Then you were a farm for Asia
with the Americans protecting you. Now the question is not
(08:58):
just who are you a farm for? It's who is
protecting you? And what I was trying to say is
you have to start with the second question to answer
the first. You can't say America is protecting us, but
we'll be a farm for China, for example, because that
may not be compatible with America protecting.
Speaker 1 (09:13):
You and the future. Can we afford to sit on
the fence? No, no, we can't. So Winston Peters is right, Well,
either choose the US or we choose China. And choosing
China would probably be disastrous for US from a security
point of.
Speaker 2 (09:26):
View, Yes it would. Ultimately that choice is likely to happen.
Nothing's written in stone. China itself could change. But if
it doesn't, yes, logically you get to that decision point.
But then if you choose China, that's disaster US for
you in terms of security. If you choose the US,
it's extremely damaging in terms of trade. So there are
trade offs that need to be made.
Speaker 1 (09:48):
A final question for you r a final comment from
a question that was posed to you after your excellent
address today. Someone threw it out there seemed a bit
of a silly question to start. Well, then I thought
about it for a moment, the possibility of another civil
war in the United States. You didn't dismiss it.
Speaker 2 (10:06):
Well, I'm not the only one not dismissing it if
you look at the polarization there and the anger and
the bitterness and the divide politically where you have got
large street demonstrations, and not just in the US, by
the way, the same is true in Europe. The same
is true in the UK. Even in Australia. People walking
through the streets of capital cities with Iranian flags and
(10:26):
before that it was Hesbola flags, and before that it
was Hamass flags, etc. You have to ask yourself, Okay,
is it really an impossibility? And far more credential people
than me are saying it's far from likely, But It's
not something you can rule out, but that in itself,
as I said today, is tied to trying to create
this new global structure. If you create a global structure
(10:48):
which is fairer in terms of who wins and loses
on trade, who wins and loses domestically, so you don't
get people left behind, maybe we remove that threat at
the same time.
Speaker 1 (10:57):
Final comment from me. You're based out of Singapore or
your Rabobank's global strategist, have you thought of moving to
a sofa place I e. New Zealand?
Speaker 2 (11:05):
Ha ha, Well I can't cope with the winters. I've
just come down here from Singapore and I can't tell
you how many layers I'm wearing already.
Speaker 1 (11:12):
Michael Avery. Always good to catch up. I reckon. We've
caught up in person and had a coffee and Dunedin.
You disagree with that, and you and I sometimes disagree
or agree to disagree, but it's been great catching you
in person. Fantastic address, keynote address this morning.
Speaker 2 (11:26):
Thank you, there we go.
Speaker 1 (11:27):
Michael Every from Rabobank, Singapore based Global Strategist,
Buckle yourselves and folks, Michael every Rabobank Global strategist Michael,
I love you having on the show, having you on
the show. We're based out of Dunedin, and I do
joke that after chatting to you, I want to climb
to the seventh floor of the Westpac building and jump,
because you always have me worrying about the state of
the world, and I'm thinking, with what's happened in the
(00:21):
past week, what are you going to come up with? Yet,
someone left your presentation this morning and I heard them
mutter on the way out after hearing you, maybe Trump's
not as nutty as people think he is.
Speaker 2 (00:33):
Good afternoon, Good afternoon. Lovely to be with you in
person for the first time I think doing this show
at least, No, he's not as nutty as people think
he is. And I would add neither am I. Um
And in terms of the jumping off the seventh floor,
I've often tried to make the point to you that
(00:54):
actually there's a really optimistic side to what I try
and get across.
Speaker 1 (01:02):
All Right, we're just maybe having some technical difficulties. Harve it.
We will battle on regardless. We've got a tech guy,
Bill Hayes. Are we on the job. Are we on
air team? We are on it. Let's just continue as
though that glitch never happened at all. So you carry on.
Speaker 2 (01:18):
In terms of jumping off of the seventh floor. A
message I've tried to get across repeatedly is it actually
there's a big upside to what's going on. So when
I describe some of these global events happening in the
background as I have been, I've always tried to say, yeah,
there are risks, but on the other hand, if things
turn out right, there's real sunshine on the other side
(01:38):
of it. And that's true for the trade war, that's
true for various different geopolitical crises we've had, and it's
absolutely true for what's going on right now in the
Middle East.
Speaker 1 (01:47):
You said when Trump was elected Trump two points zero
that this would change the face of how the world
does politics and it hers.
Speaker 2 (01:55):
Well, I mean that was a no brainer, to be honest.
I mean, if you look at what he was saying
he was going to do when he came into power,
the only question is would he actually deliver, and he
absolutely has. I mean, in terms of economic policy, there's
been a huge change. You can see trade policy has
been shaken up. Every domestic policy in the US is
being shaken up. And at the same time, primary focus
(02:16):
right now as we're talking is just in the past
few minutes we've seen more developments from the Middle East,
which again shake everything up.
Speaker 1 (02:23):
Well, he's declared a total ceasefire. You tell me the
Israelis are flat out bombing Tehran as we speak, and
vice versa.
Speaker 2 (02:30):
Well, Tehran's not bombing Israel right now, but oh sorry,
Iran isn't bombing Tel Aviv and Haife right now. But
Israel is still bombing Tehran.
Speaker 1 (02:38):
So when does the ceasefire come under play?
Speaker 2 (02:40):
Well, he said a while ago, he said in six hours.
They never announced them immediately, So both size traditionally in
the Middle East always try and bomb right up to
the last minute. So I would imagine you will get
more firing right until legally they're supposed to stop according
to this agreement, and then hopefully things can hold, at
which point what we were being told a few days ago,
(03:01):
which is this risk's World War III. This is an
absolute calamity. Now, those risks were there, to be clear,
but they were only what we call fat tail risks.
They were never the central risk instead touch would What
it appears we have got is a defanged or defenestrated
Iran which doesn't have a nuclear weapon, which is a
huge positive for the region and for the world, and
(03:23):
a massive demonstration of the reassertion of both Israeli and
US power in conjunction, which could open the door to
stability and peace.
Speaker 1 (03:32):
So this has been a huge diplomatic victory, potentially for
Trump using bombs.
Speaker 2 (03:38):
Yeah, that's how you sometimes get victory America.
Speaker 1 (03:42):
I'm just going to pick the eyes out of your
presentation this morning. You said America is essentially isolationist and
anti free trade, but certainly make America great again. It's
America first.
Speaker 2 (03:55):
What I said was historically America is a realist rather
than an idealist, and isolationist rather than internationalist. It has
periods where it tries to become more global and more
pro free trade, but we're currently reverting back to type
which is a more controlled trade. Now. I don't think
(04:15):
America is anti trade, but they're not interested in trade
where they import and don't export, which is what they've
been doing for a very long time. They want trade
partners who when they sell to them, will turn around
and say, well, I've just sold this much to you.
I've got these dollars in my pocket. Now I want
to buy something from you. That's what they want to see.
Speaker 1 (04:33):
Well, the other point you've made, and this is coming
to pass. I guess America wants to reindustrialize and make
stuff again.
Speaker 2 (04:42):
They do, that's the plan. Let's join the dots here.
They've just potentially brought, you know, peace to the Middle
East of a sort, as you said, with bombs. The
bombs that they used to achieve that. Reports are they
used twelve of them. We don't know how many they have,
but intelligen estimates but maybe only around thirty or forty.
They don't have a lot of them. They now need
(05:04):
to make more. So the whole point is, if you
want to have that Pax Americana of sorts, you need
to have the weapons, you know, to be used to
enforce it. And that's been America's problem. They haven't been
making enough of this stuff. They need to keep the
global system policed, if you will, so they want to
start reindustrializing a.
Speaker 1 (05:24):
Lot of us. Myself included of being dismissive of Trump's tariffs,
I think they're interventionalist and not good for world free trade.
We're a nation depending on world on the world and
some free trading. But you're saying tariffs are the way
of the future. We've almost gone back to the future
like it used to be.
Speaker 2 (05:42):
Well, tariffs were the way of the world forever up
until a few decades ago, where we decided that we
knew better than the totality of global economic history and
if we remove tariffs, everything would work out.
Speaker 1 (05:56):
Well.
Speaker 2 (05:57):
I mean, let me put a hypothetical to you. I
mean New Zealand. Obviously you're of fantastic producer of food
and a food exporter. What if there was a new
country that suddenly appeared on the map that could produce
everything that you do at a third of the cost,
because you know, they were using indentured labor, so whatever
trick of the trade they were using, and they were
flooding your market and every market you export to, and
suddenly you couldn't sell food anywhere. I wonder how free
(06:18):
trade New Zealand would be in that situation. So it's
always a question of where you sit in the relationship
that tells you how you feel about it. You're quite
rightly in favor of it because of where you sit now,
but that's not always true for everybody.
Speaker 1 (06:30):
Wanston Peter's there foreign a Faace monister said, we're in
the most the world was the most unstable it's been
since the Cuban Missile crisis of October nineteen sixty two.
Would you concur with that?
Speaker 2 (06:43):
We came close to that in the past couple of days,
where some of the rumored headlines out there about what
Russia might or might not do could have been an
echo in the worst case scenario, and I flagged it
at work, but I said, look, it's unlikely, but you
have to put it out there as a scenario, is
that Russia could have done what it threatened twenty four
hours ago, which was to send a nuclear weapon to Iran.
(07:06):
Let's say, for example, they put it in a cargo
plane and they say, this plane is flying to Tehran.
It's got a nuclear weapon in it. It's Russian. You
shoot it down. You're at war with us on a
nuclear level. But if it gets there, Iran's got a nuke.
What are you going to do? And it would have
forced a Cuban missile style crisis on America and Israel.
Thinking about it today, the former president Medvedev, who tweeted that,
(07:28):
said basically only joking, have no intention of doing anything
like that, So they completely blinked and walked it back.
Speaker 1 (07:34):
Does Russian a but player and the power play between
China and the US. They have the superpowers as Russia.
Russia is no longer a superpower.
Speaker 2 (07:43):
No it's not. It's super spoiling things. It can't build
very much, which is what you need to be a superpower.
But they're a super spoiler in that they can disrupt
other people's systems and they will always be powerful because
of their geography, their commodities, and then of nuclear weapons
that they've got. But that doesn't give you the basis
to build very much.
Speaker 1 (08:04):
One of the slides you put up this morning pertained
to New zealand our history. You went back to eighteen
forty the founding of our nation effectively, and you said,
from eighteen forty right through to nineteen forty one, the
beginning of the Second World War, we were a farm
for the UK and the British Empire. Are then post war,
(08:24):
until Britain entered the EU, we were a farm for
Mother England, for Britain. We became after that a farm
for Asia. You stopped at twenty twenty four. Who are
we a farm for? Now?
Speaker 2 (08:37):
Well, I put that question to Kiwis. But that is
the key question because there were two parts of that slide,
and you alluded to it. At the beginning. You were
a farm for the UK with the UK protecting you.
Then you were a farm for the UK with the
Americans protecting you. Then you were a farm for Asia
with the Americans protecting you. Now the question is not
(08:58):
just who are you a farm for? It's who is
protecting you? And what I was trying to say is
you have to start with the second question to answer
the first. You can't say America is protecting us, but
we'll be a farm for China, for example, because that
may not be compatible with America protecting.
Speaker 1 (09:13):
You and the future. Can we afford to sit on
the fence? No, no, we can't. So Winston Peters is right, Well,
either choose the US or we choose China. And choosing
China would probably be disastrous for US from a security
point of.
Speaker 2 (09:26):
View, Yes it would. Ultimately that choice is likely to happen.
Nothing's written in stone. China itself could change. But if
it doesn't, yes, logically you get to that decision point.
But then if you choose China, that's disaster US for
you in terms of security. If you choose the US,
it's extremely damaging in terms of trade. So there are
trade offs that need to be made.
Speaker 1 (09:48):
A final question for you r a final comment from
a question that was posed to you after your excellent
address today. Someone threw it out there seemed a bit
of a silly question to start. Well, then I thought
about it for a moment, the possibility of another civil
war in the United States. You didn't dismiss it.
Speaker 2 (10:06):
Well, I'm not the only one not dismissing it if
you look at the polarization there and the anger and
the bitterness and the divide politically where you have got
large street demonstrations, and not just in the US, by
the way, the same is true in Europe. The same
is true in the UK. Even in Australia. People walking
through the streets of capital cities with Iranian flags and
(10:26):
before that it was Hesbola flags, and before that it
was Hamass flags, etc. You have to ask yourself, Okay,
is it really an impossibility? And far more credential people
than me are saying it's far from likely, But It's
not something you can rule out, but that in itself,
as I said today, is tied to trying to create
this new global structure. If you create a global structure
(10:48):
which is fairer in terms of who wins and loses
on trade, who wins and loses domestically, so you don't
get people left behind, maybe we remove that threat at
the same time.
Speaker 1 (10:57):
Final comment from me. You're based out of Singapore or
your Rabobank's global strategist, have you thought of moving to
a sofa place I e. New Zealand?
Speaker 2 (11:05):
Ha ha, Well I can't cope with the winters. I've
just come down here from Singapore and I can't tell
you how many layers I'm wearing already.
Speaker 1 (11:12):
Michael Avery. Always good to catch up. I reckon. We've
caught up in person and had a coffee and Dunedin.
You disagree with that, and you and I sometimes disagree
or agree to disagree, but it's been great catching you
in person. Fantastic address, keynote address this morning.
Speaker 2 (11:26):
Thank you, there we go.
Speaker 1 (11:27):
Michael Every from Rabobank, Singapore based Global Strategist,
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