The most revealing price in the world economy may not be oil, gold, the rand, or a United States (US) Treasury yield. It may be the price of a Japanese ice lolly.

Japan’s competition authorities are investigating some of the country’s biggest ice-cream makers for suspected coordination around price increases. On the surface, it sounds almost absurd. Ice cream hardly feels like the frontier of global capitalism. But, that is precisely why the story matters. When even the freezer becomes politically sensitive, you know the inflation era has changed the rules.

Japan spent decades living with deflation. Companies learnt to apologise for price increases, protect market share, absorb costs, and treat consumers as if stable prices were a permanent social contract. Then the yen weakened, imported food and energy became more expensive, labour became scarce, and the Bank of Japan pushed interest rates back to 1%. Suddenly, businesses trained to fear price increases were asked by shareholders to defend margins and by the economy to accept inflation as normal. This transition is messy. Consumers see greed. Investors see pricing power. Regulators see possible collusion. Politicians see an angry electorate. Companies caught between all four discover that exiting a low-inflation world is not just a monetary event. It is a psychological shock.

South Africans should understand this. We have not lived through Japanese-style deflation, but we know what a weak currency does to a country that imports fuel, machinery, medicine, technology, and fertiliser. Currency weakness does not arrive with a siren. It seeps into grocery prices, insurance premiums, school fees, medical aid expenses, electricity prices, and transportation costs. By the time households feel inflation, the economic adjustment has already travelled a long way.

This is why global confidence feels dangerous. The world economy has survived pandemic inflation, wars, tariffs, energy disruptions, higher interest rates, and the restructuring of trade routes. Yet, resilience is not about being robust. Resilience means you survived the last shock. Being robust means you can survive the next one without relying on luck. And there has been plenty of luck. Companies absorbed some tariff costs through margins. Trade was rerouted rather than destroyed. Energy inventories softened geopolitical shocks. The investment boom in artificial intelligence (AI) lifted US confidence, equity markets, and capital spending. Russia’s economy, despite sanctions, continued to trundle along on war spending and oil revenues. None of this proves the world economy is invulnerable. It may simply prove that the bill has not yet arrived.

Financial markets, meanwhile, appear eager to capitalise on the good news and ignore the fragility. The AI story may be real; transformative technologies usually are. But, real technologies can still produce unreal valuations. Railways changed the world. The internet changed the world. Both also produced periods where investors confused a genuine future with any price today. When companies are valued more on possibility than profit, optimism stops being an opinion and becomes a risk factor.

The same holds true for inflation. Economists like trimmed measures because they strip out extreme price moves and reveal the underlying trend. That is useful. But, households do not live in trimmed-mean inflation. They live in fuel, bread, rent, school fees, electricity, and medical costs. A price shock removed from the model can still be the shock that breaks the household budget.

The lesson for South Africa is not pessimism. It is discipline. In a world where prices, currencies, rates, and markets can move suddenly, financial well-being cannot depend on the assumption that conditions will normalise quickly. Households need buffers. Companies need balance-sheet strength and pricing power. Governments need fiscal credibility. Investors need to distinguish between durable earnings and fashionable narratives.

Sometimes the smallest price tells the biggest story. A Japanese ice lolly is not just dessert. It is a warning that the world has moved from an era where someone else absorbed the shock to one where everyone is trying to pass it on.

This article has been published on Moneyweb.

For a few weeks, the global economy stared into an old fear: That politics in the Middle East could, again, become an inflation machine. Oil prices surged, the Strait of Hormuz became the centre of the financial world, and investors dusted off the kind of nightmare scenario usually reserved for crisis decks: $180 oil, food inflation, collapsing currencies, and central banks being forced to choose between growth and credibility.

Now, the worst case seems to have faded. A ceasefire has been signed, the Strait is reopening, and oil prices have fallen sharply from their peak. Yet, the strange thing is what has not happened. Bond yields have not collapsed. The dollar has not surrendered its gains. Central banks have not declared victory. Markets have received good news, but the problem has not gone away. This is the lesson that South Africans should take seriously: The world did not escape an inflation shock. It merely escaped the most dramatic version of one.

Energy inflation travels. It does not stay neatly inside the fuel price. It moves into transport, fertiliser, food, manufactured goods, and wage demands. Once those second-round effects begin, cheaper oil helps, but it does not rewind the clock. A family may see relief at the pump, while still paying more for groceries. A business may have lower fuel costs, but still face higher input prices. Inflation is not a light switch. It is more like dye in water.

This is why central banks remain cautious. The Federal Reserve (Fed), European Central Bank, and Bank of England are looking at the same basic problem: Headline inflation may ease, but underlying inflation is still too sticky. The market debate is no longer: “Will oil prices go higher?” It is: “Has the inflation psychology changed again?” Once households, firms, and unions start pricing for a more expensive world, central banks will have to fight the expectation, not only the data.

For South Africa (SA), this matters enormously. The South African Reserve Bank must respond to what global prices do to local inflation and the rand. If the Fed stays higher for longer, the rand has less breathing room. If the dollar strengthens, imported inflation becomes harder to contain. If global investors decide that the United States (US), powered by artificial intelligence and resilient consumers, remains the safest place to earn returns, emerging markets must work harder to attract capital. This is the uncomfortable part: Even when SA does nothing wrong, the cost of money can rise because the world has changed its mind.

China adds a second warning. For years, China’s answer to weakness was more investment, more exports, and more infrastructure. It worked spectacularly. But, now domestic demand is soft, property remains wounded, and the return on further investment appears weaker. China is discovering what all growth models eventually face: Yesterday’s miracle can become tomorrow’s constraint.

SA should not look at China with superiority. We have our own old formulas. We promise infrastructure without execution. We speak about industrialisation, while electricity, logistics, and municipal capacity undermine firms. We talk about inclusive growth, while education and skills fail to carry millions into productivity. Like China, we also struggle to admit when a model has stopped producing what it once promised.

So, where does this leave investors and households? In a world where relief rallies are possible, but complacency is dangerous. Oil prices can fall, and interest rates can remain high. The rand can weaken even after good local news. Food inflation can persist after the geopolitical headline improves. China can export strongly, while still disappointing commodity producers. The US can look politically chaotic and still attract capital because returns matter more than mood. The great mistake now would be to confuse the end of the emergency with the return of normality. South Africans know the difference. The crisis may be less frightening than it was a month ago. But, the bill is still moving through the system.

For much of the past decade, the easiest money was made in the weightless economy. Software scaled faster than factories. Platforms looked more powerful than production lines. Capital was cheap, rates were low, and the market was willing to pay extraordinary prices for profits that might only arrive years from now. That world has not disappeared. But, it is changing.

South Korea offers a useful glimpse of what the next phase may look like. Its current boom is not built on slogans about innovation. It is built on chips, ships, transformers, and weapons. Artificial intelligence (AI) needs semiconductors. Semiconductors need data centres. Data centres need electricity infrastructure. A more dangerous world needs ships, submarines, tanks, and defence systems. Korea happens to make many of these things at scale.

This is not by accident. It is the result of decades of industrial depth: Engineering skills, export discipline, large corporate balance sheets, supply-chain competence, and a national fear of falling behind. Some of Korea’s conglomerates have long been criticised for being too sprawling. Yet, in this moment, that breadth has become useful. When the world suddenly needs strategic production, the country that still has factories, technicians, and institutional memory is not trapped in theory. It can deliver.

This is the first lesson for South Africa (SA). We speak too often as if growth will come from confidence alone. Confidence matters, but only when there is something real to be confident about. Investors do not ultimately reward speeches. They reward electricity, ports, skills, logistics, policy credibility, and companies that can compete beyond their home market. SA still has genuine advantages in mining, agriculture, energy, financial services, and parts of industrial production. But, advantage is not destiny. Without execution, it becomes a museum exhibit.

The second lesson is that capital is becoming less patient. The recent pressure on United States (US) technology shares after stronger employment data shows how quickly the market’s mood can shift. If interest rates remain higher for longer, the future profits promised by AI are worth less today. The AI story may still be powerful, but investors are starting to ask harder questions: Who will pay for the infrastructure, who will earn the margins, and how long before the excitement becomes cash flow? That matters beyond Wall Street. In a cheap-money world, weak business models survive longer. Governments postpone trade-offs. Investors tolerate heroic assumptions. In a higher-rate world, the bill arrives sooner.

This leads to the third lesson: Debt is becoming political again. Developed countries have spent years behaving as if fiscal space was almost infinite. Wars, ageing populations, social promises, and higher interest costs are now testing that belief. Even the US’ “exorbitant privilege” is not a permanent exemption from arithmetic. When debt service costs rise, they crowd out the future quietly at first, then suddenly. South Africans understand this better than most. We already know what happens when the state spends too much on yesterday’s failures and too little on tomorrow’s capacity. A country cannot build a dynamic economy while its budget is being eaten by interest payments, bailouts, and inefficiency.

There is a final, more uncomfortable lesson. The Americanisation of European football shows that capital does not merely fund institutions; it changes them. Investors see under-commercialised assets. Supporters see identity, memory, and belonging. Both may be right. Economies are similar. Reform fails when people are treated only as consumers, taxpayers, or line items on a spreadsheet.

The next decade may, therefore, be less glamorous than the last, but more honest. The winners will be countries that can produce, power, finance, defend, feed, and govern with competence. For SA, the question is simple: Are we building real capacity, or merely managing decline with better language? The world is moving from promises to proof. We should too.

For years, investors lived in a world where bad news was often good news. If markets fell hard enough, central banks would soften their tone, governments would open the fiscal taps, and asset prices would recover before the economy had absorbed the shock. The result was a powerful habit: Buy the dip, because policymakers would not allow the dip to become a crisis. This habit may now be dangerous.

The world has not become less interventionist. In fact, the opposite is true. Governments are everywhere. They are subsidising energy, protecting strategic industries, tightening trade rules, funding defence, restricting critical minerals, screening foreign investment, and rebuilding supply chains. But, this is no longer the old safety net designed mainly to calm financial markets. It is a new, more political form of state capitalism. This distinction matters.

Old policies were broad, fast, and market friendly. They rescued liquidity, restored confidence, and pushed investors back into risk assets. New policies are narrower, slower, and more selective. They do not save everyone. They favour industries considered strategic, companies with political weight, technologies linked to national security, and sectors justified under the language of resilience, energy transition, or sovereignty.

Europe shows this shift clearly. Once the defender of open competition and strict state-aid rules, it is now debating how much public money is needed to keep steel, energy-intensive manufacturing, and green technology alive. The argument is understandable. European firms face high energy costs, subsidised Chinese competition, and an America that has embraced industrial policy with enthusiasm. But, the risk is equally obvious. If Germany and France can subsidise more aggressively than smaller member states, Europe may protect industry from China while weakening its own single market from within.

China, meanwhile, is playing a longer game. It is not only exporting cheap goods. It is exporting overcapacity, buying consumer brands, controlling critical parts of supply chains, and using its industrial base as strategic leverage. Its domestic economy is under pressure, but its companies are becoming global competitors in clothing, electric vehicles, batteries, consumer brands, and technology-enabled retail. This is not simply commerce. It is economic power looking for new channels.

Then, there is also the security dimension. Japan is rearming because China is more assertive. China condemns Japan’s military spending while expanding its own defence budget year after year. Taiwan remains a flashpoint. Rare earth minerals are no longer just inputs; they are bargaining chips. Shipping lanes, energy corridors, and semiconductor supply chains have become investment variables.

What does this mean for South Africa (SA)?

First, we should stop assuming that globalisation will remain neutral and based on rules. The world that SA trades with is becoming more transactional, subsidised, and geopolitical. Market access, energy security, logistics performance, and diplomatic alignment will matter more, not less.

Second, we cannot copy Europe’s subsidy model. We do not have the fiscal space. A South African subsidy race would probably protect incumbents, reward political proximity, and deepen the debt problem. We need fewer permanent handouts and more disciplined, performance-based support.

Third, our real industrial policy is not a speech, a master plan, or a slogan. It is electricity that works, ports that move goods, rail that lowers costs, crime control that reduces risk, and regulations that allow private capital to invest with confidence. Without these basics, any subsidy is just an expensive decoration.

For investors, this new world requires a different mindset. The question is no longer only whether central banks will cut rates or whether governments will intervene. The sharper question is: Who will they intervene for, who will be left exposed, and who will pay?

The old world rewarded faith in rescue. The new world may reward resilience in the form of strong balance sheets, pricing power, policy credibility, and the ability to execute. For SA, the challenge is clear: We cannot afford to build an economy that survives only when global markets are generous, commodity prices are kind, or government finds another temporary support package. Our advantage must come from fixing the basics (electricity, logistics, security, regulation, and investment confidence), so that growth depends less on rescue and more on performance.

This article has been published on Moneyweb.

The next trade war may not begin with a tariff announcement. It may begin with something far smaller and more frightening: A payment that does not go through, a hotel booking that disappears, a cloud service that stops working, a parcel that is returned, or a bank transfer that quietly bounces. That is the new shape of economic power. The world is not simply deglobalising. It is discovering that globalisation was built on switches, and that many of those switches are controlled by someone else.

Europe is learning this lesson the hard way. For decades, its relationship with the United States (US) looked reasonably balanced. Europe sold goods. The US sold services, software, platforms, payment systems, and cloud infrastructure. But, these services are no longer peripheral. They are the operating system of modern life. A country can still have factories, skilled workers, and wealthy consumers, yet remain vulnerable if its payments, data, software, and digital identity systems depend on foreign platforms. This is why Europe is suddenly talking about digital sovereignty, alternative payment systems, and its own “Airbus of payments”. It is not really a debate about technology. It is a debate about control. No serious economic bloc wants to discover, during a political dispute, that it cannot pay, compute, insure, book, communicate, or trade without permission from another country’s companies.

China represents the other side of the same problem. It has long been a leader when it comes to cheap manufactured goods and is now also becoming a leader in advanced manufacturing. China is no longer merely exporting toys, textiles, and basic electronics. It is pushing into electric vehicles, clean energy, machinery, chemicals, robotics, industrial equipment, and critical minerals. This is much more threatening because it means that China is now challenging the sectors that built the prosperity of Germany, Japan, South Korea, and parts of Europe. A stronger renminbi may help ease some political pressure, but it will not remove the deeper issue. China has built scale, capability, and state-backed industrial momentum that competitors can no longer ignore.

That being said, the US still looks like the strongest player. Its labour market has improved, corporate profits remain high, and business investment is resilient. But, even the US is not immune to global shocks. If energy prices remain elevated because of the conflict in the Middle East, inflation could remain sticky. If inflation remains sticky, the Federal Reserve cannot simply cut interest rates because politicians want cheaper money. Suddenly, central bank independence becomes more than an academic principle. It becomes a market risk.

Investors are, therefore, facing a strange world: The US controls much of the digital architecture. China controls more of the industrial architecture. Europe controls important niche sectors, but lacks platform scale. Everyone depends on everyone else, while everyone is also trying to depend on one another a little less.

South Africa (SA) should pay attention. We are not only price-takers in commodities and interest rates. We are dependency-takers. We rely on Chinese-manufactured goods, Western financial infrastructure, imported technology, global shipping routes, foreign capital, and external demand for our minerals. In a more coercive world, weak countries do not become neutral. They become exposed.

This does not mean that SA should chase a fantasy of self-sufficiency. We cannot build everything ourselves. But, we can become far more serious about resilience. Energy security, port efficiency, payment stability, cyber protection, digital infrastructure, critical minerals processing, and policy credibility are no longer boring reforms. They are the new foundations of competitiveness. The same applies to portfolios. The best companies of the next decade may not simply be those with the highest margins today. They may be those with pricing power, diversified suppliers, strategic assets, reliable infrastructure, and a low exposure to political chokepoints.

In the old world, efficiency was king. In the new world, resilience may be the real premium.