The four horsemen of the apocalypse are coming for the global economy

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Four powerful shocks are hitting the world economy at the same time. They are escalating and feeding on each other, driving a commodity spiral that can end only in an inflationary blow-off.

The effects are ripping through the global bond markets and confronting central banks with an impossible dilemma. Yields on 10-year US Treasuries have surpassed 5 per cent, smashing through the Maginot defences of Scott Bessent, the US treasury secretary.

The Bloomberg commodity index has risen 48 per cent this year, accelerating in pace and spreading in breadth from energy to industrial metals and grains. The fever has spread to shipping and freight.

Lloyd’s List says the cost of a giant VLCC oil tanker on the Baltic Exchange has hit $US1 million ($1.4 million) a day, eight times the cost in January. “What is happening is truly unprecedented,” said Erik Broekhuizen, the head of shipping at Poten & Partners.

The futures markets are no longer pricing in a quick return to normal, as they were in those first insouciant weeks of the Iran war, when traders still believed in the all-conquering might of the US navy. Brent futures contracts are more than $US90 a barrel all the way out to the spring of 2027.

As Trump’s Iran war drags on, we’re facing the next oil crunch

Stephen BartholomeuszSenior business columnist

Senior business columnist

European gas futures are locking in prices through the winter that are three times higher than last winter. Wheat, maize and soybeans are all in “contango”: futures prices are well above today’s spot prices.

The first two horsemen of this “apocalypse” – conquest, war, famine and death in the Book of Revelation – are the twin wars in Iran and Ukraine, both acts of aggression by atavistic old men who fatally misread their own strength. These two conflicts are convulsing the world’s........

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