ELAM: A memo to President Xi with a surprising conclusion
An unusual memo has surfaced in policy and market discussions under the title "ELAM: A memo to President Xi." The acronym is never explained. Purportedly written by "Intelligence Staff" for Chinese leader Xi Jinping, the document catalogs a long list of U.S. vulnerabilities, from sluggish growth and trade friction to NATO turmoil and spiraling energy prices. But its central conclusion is perhaps not what its author intended: the United States, the memo admits, is unbalancing itself.
The memo opens with a premise that might flatter Beijing. "The good news is that our program of keeping the USA off balance is working," it says. Yet as it walks through each example, the analysis keeps pointing back to decisions made in Washington, not operations directed from Beijing.
On the domestic front, the memo cites second-quarter 2026 U.S. annual growth of 1.5%, down from 2.1% in the previous quarter. It attributes the slowdown to "confusing and frequent changes" in tariff policy, which it says have triggered multi-billion dollar write-offs in industries such as autos. Economists generally agree that prolonged trade-policy uncertainty can depress investment, though the scale of the effect remains a subject of debate.
North America, the memo argues, reflects the same pattern. It describes President Donald Trump as casting aside the USMCA trade pact, which took effect in 2020, to pursue another rewrite. That opening, it claims, has pushed Canadian Prime Minister Mark Carney to negotiate more trade with China. Mexican trade, by contrast, remains fairly strong, aside from violence that the memo ties to U.S. drug demand.
In Europe, the memo recalls Trump's warning that the United States might leave NATO, an alliance of 32 nations, over its response to what it calls the war in Iran. Whether or not that threat is literal, European allies are already under pressure to strengthen their own defenses against a possible incursion from the East. A U.S. security commitment that appears conditional would change the calculus of every NATO capital.
On Iran, the memo quotes the Iranian Supreme National Security Council as saying: "The Strait of Hormuz won't reopen until the U.S. corrects its behavior." It then notes that gasoline futures have risen from $1.80 to $3.16, a 75% increase, since the start of what it calls Trump's Iran adventure. If sustained, such an increase in fuel costs would feed through to consumers and complicate the Federal Reserve's inflation outlook. The memo also says Trump is now blaming the domestic energy industry for making too much money — a sign, at least in the author's eyes, that political pressure is building ahead of the November congressional elections. The author warns that losing the House, which it calls likely, would effectively shut down further presidential initiatives.
The most striking passage is the one in which the author responds to a question from Xi about which Chinese programs produced these results. "As far as we can tell, we did nothing," the memo says. "All of this happened since February 28 with no effort on our part." If the memo is genuine, that is a remarkable admission. If it is not, it is an even more interesting piece of political commentary.
The market section of the memo has a somewhat different tone. West Texas Intermediate crude trades at $81.72, which the author treats as roughly the midpoint of the recent range and therefore good news for the Permian Basin. Energy stocks advanced alongside the price rally.
Cryptocurrency traders, meanwhile, have apparently rotated into AI and semiconductor stocks. The SOX semiconductor index fell from 14,500 to 11,000 before recovering to about 12,500, precisely at its 50-day moving average. The memo calls that level an important test for the tech sector. Technical analysts would agree: a sustained break above the 50-day line could invite fresh buying, while a failure there might signal another leg lower.
The S&P 500, or SPX, has jumped to 7,800, and the memo expects a final push toward the high 7,880s. But it also cautions that equity-market turning points are usually preceded by some fundamental event. With so many shocks crowded into the period since February 28, the author wonders whether markets will eventually pause.
What makes "ELAM" notable is not the geopolitical briefing it pretends to be. It is the argument buried inside: the most serious threats to U.S. stability, in this telling, are coming from U.S. policy itself. That may not be what President Xi's intelligence staff was hoping to hear, but it is consistent with a growing body of analysis about the economic costs of volatile leadership.