Reserve Bank of Australia Governor Michele Bullock recently highlighted a significant shift in the challenges facing central banks. Speaking at a Committee for Economic Development of Australia event in Sydney, Ms Bullock acknowledged that like her predecessors, she too faces a defining crisis. However, her crisis is a new wave of global inflation, increasingly driven by geopolitical conflicts and supply shocks thousands of kilometres from Australia. She remarked, “I think it is pretty much the world we live in now,” signalling a departure from purely domestic economic concerns.
This sentiment resonates with Michael Every, a global strategist at Rabobank, who believes central bankers are increasingly becoming military strategists. Rabobank is a Dutch multinational banking and financial services company, known in Australia for its focus on farming and agribusiness clients. Every suggests understanding military strategies and their impact on global oil prices is now as crucial for institutions like the RBA as traditional economic indicators. He points to Ms Bullock’s own observation that current supply disruptions—from the Russia-Ukraine war to Middle East conflicts—stem from a fundamental shift in the global order, replacing open trade with geopolitical tensions.
Every describes this new reality as “economic statecraft” and “grand macro strategy,” where nations pursue interests using economic, political, and military power. This marks the end of a 45-year period of globalisation underpinned by US military might, which, he argues, eventually led to inequality and weakened industrial capacity. As the global landscape fragments into blocs aligned with superpowers, investors, businesses, and policymakers may be underestimating the profound implications. Every stresses a lack of resilience and optionality in current systems, warning that “if lines on maps can move, lines on your screen will move a lot,” signifying significant economic disruption and demanding reassessment of global dependencies.
