Forget for the moment the current political impasse on Capitol Hill, one of the main factors driving bond yields higher and sending a chilling message to the stock markets.
Of much greater importance to global production and prosperity are the shifting geopolitical tectonic plates.
It’s no surprise that President Biden’s first act upon returning from Israel this week was to take to the airwaves.
Clash: The changing world map and the power struggle between the United States and its rival China are stifling economic decision-making
In a Reagan-style speech, he turned directly to the people to seek support for 100 illiobn (£83 billion) in military and economic aid, to be split 60-40 between Ukraine and Israel.
Russia’s war against Ukraine and the obscene Hamas attack on Israel are dramatically changing the political and economic world order.
It seems like only yesterday that I arrived for financial meetings in Bangkok (it was actually 1991!) and there on a table was an innocuous press release announcing that Russia had applied to join the pinnacle of capitalism at the International Monetary Fund.
There was a huge wave of optimism about the possibilities for economic progress and much talk of a peace dividend.
A place was even found for Russia as the eighth member of the G7 club of rich countries, from which the country has since been expelled.
How different it all looks now. The changing world map and the power struggle between the largest economy, the United States, and its assertive, Russian-friendly rival China, are stifling economic decision-making.
Brown era: When Gordon Brown helped found the G20 in 2009, he brought China, Russia and Saudi Arabia to the table
At the time of the Great Financial Crisis in 2008-2009, the IMF and other financial organizations were castigated for not having seen it coming.
One suspects that the IMF-World Bank meeting in Marrakesh, the first to be held in an Arab country, will be seen in the same light of failure.
The Israel-Gaza shock overshadowed the story. What has not been widely discussed, except behind closed doors, is how polarization defeats global decision-making.
When Gordon Brown helped found the G20 in 2009, he brought China, Russia and Saudi Arabia to the table for an international operation to prevent a 1930s-style depression.
When the G20 met in Marrakesh, all that emerged was a series of bromides about manufacturing and little about the war raging in the heart of Europe, which has inflicted inflationary pain on the West and starved the poorer south of grain and other resources.
Nor was there a word about the dangers to economic well-being of a conflict in the Middle East that has already led the Americans to move two aircraft carriers to the eastern Mediterranean.
It was left to the World Bank, which has long played a major role in the West Bank (and to a lesser extent Gaza), to tell staff it was “shocked” by the escalation of violence and the “targeting and kidnapping of innocent people’. citizens.’
The Bank, under the new slicker leadership of Ajay Banga, finds itself in the vortex of events. China’s hard line on debt cancellation – as we saw in Sri Lanka – is a new weapon as Beijing asserts itself in Africa, Latin America and beyond, furthering the Bank’s mission to make the world a better place getting in the way.
Likewise, efforts to expand IMF financing through changes in shareholder structure, known as quotas, are holding hostage to US-China relations and deep divisions in the Middle East.
War can have some economic and financial benefits for countries such as Britain, France and the US, with their defense systems and weapons production capabilities.
But it is also a shock to economic cohesion at a time of economic fragility, with the G7’s high debt burden, rising oil prices and powerful central banks nipping prospects for expansion in the bud.
Scottish fog
Could Rishi Sunak learn something from Scottish Prime Minister Humza Yousaf?
The SNP leader is proposing to go straight to the markets to issue Scottish infrastructure bonds to fund affordable housing.
A more creative Tory government would have gone straight to the taxpayer with an offer of HS2 Manchester bonds with the kind of coupon that has made the recent National Savings offers so popular.
The banks would object and the Ministry of Finance would fear a disruption of the government bond market. Former Treasury chief Nick Macpherson has tweeted that such bonds may be more expensive.
Nevertheless, it is an intriguing opportunity to give citizens the chance to invest directly in major projects, with the imprimatur of HMG.