Inflation could be the new normal as the rules-based order collapses
The prospect of a violent and chaotic global order may mean inflation is here to stay.
Surging oil prices prompted by the US-Israel war on Iran threaten to become the new normal, as the international rules-based order makes way for a volatile and violent replacement.
During a tour of Australia last week, Canadian Prime Minister Mark Carney warned the global order was being “erased” as “hegemons”, a thinly-veiled reference to the US and China, impose their will through coercion and violence.
The prospect of rolling conflicts poses political risks for the Albanese government, which faces persistent shocks to international trade which it has little ability to prevent.
Trump’s attack on Iran, and its impact on the strategically-vital Strait of Hormuz, has already prompted domestic petrol prices to surge past $2 and forced the government onto the defensive.
