For over three decades, investors benefited from a powerful mix of disinflation, cheap global labour, steady productivity, and dependable central bank support. These conditions shaped both the market environment and investor expectations. They kept interest rates low, volatility contained, and asset prices moving higher. The structural forces that kept inflation suppressed are no longer working the same way, and the global order that enabled them is shifting fast.
Geopolitics are more fractured, and the balance between the West and China is no longer predictable. The West is rearming, supply chains are reorienting, and energy security is being prioritised over cost. Inflation has returned, and this time, it may not fade quietly.
China’s economy is no longer the engine it once was. Property markets are slowing, credit expansion is under pressure, and its long-run demographic and productivity trends point downward. This could be disinflationary in the near term, particularly for goods. But history suggests that governments rarely stand back in the face of slowing growth.
Artificial intelligence, automation and biotech are advancing quickly, and many see them as the next source of productivity. But these benefits take time to filter through, and the rollout is shaped by regulation, national security, and industrial policy.
Ruffer Investment Company Limited (LON:RICA) is a British investment company dedicated to investments in internationally listed or quoted equities or equity related securities
