Diesel prices have gone goblin mode

This is Bloomberg Opinion Today, a K-shaped economy of Bloomberg Opinion’s opinions. Sign up here.Today’s Agenda Diesel is the real fuel to [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a K-shaped economy of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Diesel is the [real fuel to watch](. - [Germany’s military]( needs improvement. - China could be the [next global crisis agent](. - We have a [new K-shaped economy](. The REAL Fuel Emergency Is Diesel Given that the End Times are in full swing, what with World War III brewing, the 432nd [Covid wave]( apparently underway and [Pete Davidson]( going to space, you can forgive people for kind of giving up a little. Two years ago we were spinning on Pelotons, baking sourdough and learning Mandarin. Now we’re just guzzling vodka, snarfing pizza and letting our eyebrows grow together, apparently. The kids call this “going [goblin mode](,” a phrase that was not, as legend has it, popularized by Pete Davidson’s mortal enemy’s [ex-girlfriend](. I am so, so tired. Here’s an example in chart form, courtesy of Jessica Karl: Goblin Source: Jessica Karl Goblin Source: Jessica Karl What you’re looking at is the price of diesel fuel, which has [been even uglier lately than the price of crude oil](, writes Javier Blas. The stuff only fuels the global economy, and it was in short supply even before Vladimir Putin invaded Ukraine. Now prices are setting records, threatening the entire global supply chain and yet more inflation. Pass the pizza. China Could Be the Next Russia From the start, the Covid pandemic has been one nasty surprise after another, just an endless procession of jack-in-the-boxes filled with malice. The Ukraine war is following a similar path. Not all the surprises are completely awful. Putin’s aggression has inspired a shockingly toothy response from the West. Germany has been the biggest surprise of all, shutting the door on the Nord Stream 2 gas pipeline from Russia, sending weapons to Ukraine and even getting serious about [arming]( itself for the first time in decades. [German forces have fallen into serious disrepair]( and will need a lot more money, time and dedication to sort out, Chris Bryant warns. But it’s a start.  Meanwhile, just as Covid did, Putin is giving [Europe an emergency kumbaya moment]( that could shove it much further down the road to fiscal and political unity, writes Jenny Paris. A side effect could be the euro gaining power relative to the dollar. A far less pleasant surprise has been China’s response. It doesn’t seem thrilled its partner in the new Axis of Autocracy, formed with Putin at the Beijing Olympics, has already invaded a neighbor and unified much of the world against it. But China has been [spreading]( Russian propaganda and doing nothing to temper Russia’s zeal for civilian slaughter. President Joe Biden’s national security adviser, Jake Sullivan, met Chinese officials today, but the [readout]( suggests only that they had a “substantial discussion.” That could mean anything! Westerners have long hoped China’s inclusion in the global economy would inevitably lead it to join us at the [End of History](, where we’d all spend the rest of eternity voting in free elections, buying Ikea furniture and just generally having a nice time. But then we had similar hopes for Russia, and look how that turned out. Adrian Wooldridge warns [we’ve misread China just as badly](. Both nations are powered by self-regarding strongmen and a burning sense of cultural grievance that overwhelm the appeal of Western values. The results could be just as bloody. Bonus End-of-History Reading: [NATO expansion actually helped Russia](; don’t buy it as an excuse for Putin’s invasion. — Hal Brands The K-Shaped Economy Is Back, Hooray One early-pandemic trend making a comeback is the K-shaped economy. Back in Ye Olden Tymes of Original Formula Covid, people who could work from home kept their jobs, while less-wealthy people in service industries faced mass unemployment. This was called a “K-shaped” economy because we all got tired of using the word “inequality” a while back. We thought the U.S. government obliterated this K shape with an avalanche of money. But Conor Sen writes it has risen from the rubble to terrorize us again, this time because of inflation. Well-off people who own houses just keep getting better-off as home values rise. People [more exposed to food and energy costs are suffering](. Teresa Ghilarducci has some tips for [how people at the bottom of the K can survive]( high inflation. A few teasers: Take the bus. Don’t buy in bulk. Try lentils instead of meat. Nobody said this would be fun. The Federal Reserve will get around to starting to fight this inflation later this week. Mohamed El-Erian suggests [it should raise rates aggressively]( to catch up to the prices it let get out of control. This will [likely cause a recession](, warns Lisa Abramowicz, though financial markets don’t seem to believe it yet. That’s one way to collapse the K. Bonus Surviving-the-K Reading: - You [might want to avoid Treasury bonds]( for a little while. — Alexis Leondis - Protect yourself from uncertainty [by being more resilient](. — Allison Schrager Telltale Charts [California’s gasoline prices are uniquely exorbitant]( but could become more common as we switch to EVs, writes Justin Fox. Further Reading [Pandemic-relief fraud was rampant](. The government must make sure such a thing doesn’t happen again. — Bloomberg’s editorial board [Zoom-school lawsuits have a point](: On-campus learning really is worth more, and universities should embrace the idea. — Stephen Carter There’s [no sense in staying in a new job]( if it’s not living up to expectations. — Kathryn Minshew ICYMI The [pregnant woman photographed]( at a Ukraine maternity hospital bombed by Russia has died, along with her baby. [Sewer data suggest rising Covid]( cases in the U.S. Joe [Manchin won’t support Sarah Bloom Raskin]( for the Fed. Elon Musk says he [wants to fight Putin](. Kickers Russian cops arrested a woman for [holding a blank sign](. [Uncombable Hair Syndrome]( is real, spectacular. (h/t Scott Kominers for the first two kickers) Russians accidentally [got some protest]( with their evening news. Birds [might have language](. Notes: Please send cannolis and complaints to Mark Gongloff at mgongloff1@bloomberg.net. 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