When it comes to my family and my personal life, I confess that I tend to be a worrier. Over the years this has led to my share of wakeful nights, lying in bed worrying about a problem a child had at school, or about whether it was really a good idea to move to a new apartment, or even whether I’d left enough time to make a morning flight.

But recently, for the first time that I can remember, I awoke in a cold sweat in the middle of the night focused purely on the state of the world and with a memory of my dream just before waking, in which I looked at my Bloomberg screen and saw the British pound trading at $0.80.

No, that is not a prediction. I really do not expect such a massive fall in Britain’s currency. And in fact, if the pound’s value did drop so steeply, it might even represent an opportunity, not the end of the world.

Rather, the dream seemed to embody a sense that I live in a world that, in some ways, I don’t completely recognize. For readers familiar with the novelist Haruki Murakami, I feel almost as if I’ve wandered into his novel 1Q84—and a parallel universe that subtly, but critically, different from the one I left. How else to characterize the bizarre fact that an estimated $10 trillion of the world’s sovereign debt now carries negative yields—and yet that meanwhile in Europe, home to most of those negative yields, governments continue to preach austerity?

It would be easy enough to interpret such bond pricing as a precursor to economic collapse. That could apply even in the U.S., where although the central bank has created trillions of dollars of money, growth is slow, real incomes are down, and politicians have not added the kinds of massive investments in infrastructure that could put the country on the right path to their wish lists. The yields on ten-year bond now approach 1.5 percent, as low as at any time—and according to some indexes, lower—in America’s history going all the way back to 1790.

But if I look more closely, actually, what’s happening today lines up exactly with—if an even more acute version of —the way I’ve viewed, and written about, America and the world for nearly a decade. My broad macro perspective has been, and remains, that America and most of the world teeters on a thinner and thinner tightrope, with an eventual fall to one side or the other inevitable. On which side we will fall is the critical question.

On one side lies a nearly endless abyss: deflation and depression. On the other lies inflation, which, while no piece of cake, is a far better alternative. As we’ve noted before, the massive inflation that ran rampant in 1920s Germany didn’t even bring down the government. But the deflation in the 1930s left Europe in the hands of unbridled evil.

Understanding this, however, only takes you halfway home. To get all the way back, you have to realize that despite economic policies bordering on the insane, we may still escape. But the West, to avoid facing a threat to its way of life, will have to accept living with inflation for a while. It could be the hiatus that eventually leads to far better and calmer times.

Evidence continues to mount that, as I’ve said, we now see commodity prices beginning to perk up for real. Three news stories appeared over the weekend to support this view, and while these stories will come as no surprise to TCI readers, they show that word is spreading.

First was a report that copper supplies are likely to sharply trail demand in 2017-2020, which leads to China’s large stockpiling. I have previously pointed out that Chinese copper imports now well exceed previous records.

Copper’s supply/demand dynamics will likely be turbocharged by a similar shortfall in oil. Indeed, according to Bloomberg, under most assumptions, the only hope for a balancing of supply and demand in oil is sharply increased production in Russia. And according to Bloomberg’s hawked-eyed analyst Julian Lee, Russia’s output is much more likely to fall than increase. He shows strong evidence: production from Rosneft, Russia’s largest producer, has declined for three years. The International Energy Agency (IEA) agrees with Lee and estimates Russia’s oil output will fall over the next several years. And so it should come as no surprise that China is also importing record amounts of oil.

Finally, there was the IMF’s world update, which we can sum up in one word: dire. The world can no longer rely on monetary solutions: we need more government spending, lots of it, along with less regulation that gets in the way. Such spending, which is essential, will increase demand for commodities and labor, and it will be inflationary.

Bottom line: policymakers will get another swing at events similar to 2007-2008. If commodity prices continue to rise and wages also get a boost, inflation will jump. If the Fed and other central banks try to head inflation off at the pass, we’ll see a repeat of 2008—and given the even greater fragility of the world’s finances, it could be 2008 on steroids. Let’s hope we avoid such a tragic outcome.

Maybe we all should send policymakers histories of the years following inflation, in Germany and even in Japan, which experienced a year of 40 percent inflation before it embarked on scorching growth for about two generations. Along with histories of those years, for good measure let’s send histories that recap the world’s economy leading up to WWII. And let’s hope that for today’s policymakers, once severely burned, forever shy.