The past couple decades the way global economy worked is U.S. consumers were soaking up all the cheap stuff the world had to offer: the asset rich, benefiting from the dollar as reserve currency and massive QE, bought high-end stuff from Europe using cheap Russian gas, and lower-income households bought all the cheap stuff from China. All this has worked for decades, until nationalism, protectionism, and geopolitics destabilized the low inflation world.The U.S. and China relationship became inflationary, in contrast to previous decades when it was deflationary.With regards to the Ukraine conflict which really is a Russia-US conflict, both sides went “nuclear” quickly, economically: the U.S. weaponized the U.S.dollar, and then Russia weaponized commodities.In this situation, central banks went from waging a war against deflationary forces originated from globalization of cheap resources (labor, goods, and commodities), to “fighting” the inflationary forces coming from a complex economic war.Russia and China have ironically been the main “guarantors of macro peace”, providing all the cheap stuff that was the source of deflation fears in the West, which, in turn, gave central banks leeway for years of overwhelming monetary expansion (QE).Today’s inflation, is more about supply and less about demand, and more about geopolitics than (domestic) politics.The west can surely reduce demand by raising rates, but what if supply curves move inward faster than demand curves?I don’t see the market thinking much about that. Hence my post as heavy food for thought.