How will the confrontation in Ukraine affect the global balance? Specifically, how might it shift the balance between the US and China.

Hegemony isn’t a fixed, structural feature of the world. Hegemony is what you make of it. You produce and reproduce it at moments of crisis by acting promptly and at scale. The Fed has acquired a well-justified reputation as a generous hegemon of the dollar-based global system. Since 2008 it has repeatedly acted to ensure sufficient liquidity. Whether that is sustainable in the long-run, whether it leads to the progressive devaluation of the dollar, or a world awash with credit, these are serious. But right now they are not top of mind. In the long run – as Keynes famously said – we are all dead. And if we weren’t already aware of the wisdom of that message, President Putin has done his bit to remind us of it.

Meanwhile, global commodity prices are surging. Given current market conditions, why would exporters accept payment in something other than the most fungible currency i.e. dollars?

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