"A less reliable America means more wars and crises that disrupt trade. Sanctions and economic nationalism create barriers, making markets less fungible." [less reliable America]
"commodity firms and Wall Street trading desks are making $140bn a year, double the level in 2019." [$140bn a year]
"if the erosion of the law of one price becomes widespread and sustained, overall inflation rates could diverge more." [erosion of the law of one price]
The article treats commodity price dislocations (oil ranging $97–$147 per barrel, gold divorcing between continents, tech chips 50% more expensive in China) as evidence of a systemic breakdown in price convergence. The author attributes this not to temporary shocks but to sustained geopolitical tension and industrial policy, implying the fragmentation is structural and durable. This generalizes beyond commodities to tech, EVs, and biotech, suggesting the law of one price is retreating across asset classes.
The article catalogs a revival of business models previously written off as obsolete—19th-century Japanese trading houses, macro-hedge funds (dormant since 2012), and new 'neocloud' firms renting AI chip access across borders. This pattern suggests that market fragmentation is not a temporary disruption but a structural regime shift that rewards intermediation. The author explicitly frames arbitrage profits as 'a tax that the world pays to incentivise firms to try to bridge fractured markets,' treating it as a systemic feature of the new order.
The article moves from price dislocations in commodities and tech to macroeconomic consequences: if markets remain fragmented, inflation will no longer converge globally. The author notes this reverses the 1990s–2000s pattern of low, converging inflation. The implication is that geopolitical fragmentation is not just creating trading opportunities but reshaping the fundamental monetary and currency landscape, with weaker currencies and lower asset valuations in high-inflation regions.