Remember that image of an avalanche? That is what we are now seeing around the world as higher food and energy prices combine with monetary tightening and supply-chain disruption. As in the 1970s, the most serious damage will be suffered by emerging and developing economies — the “Third World,” as they were then collectively known. Consider just a few examples, beginning in the Middle East.

Turkey’s currency has come under increasing pressure in the last two weeks. The government’s response is to try to force the country’s banks to use their dollar reserves to support the lira. Last week, Iran’s hardline government raised prices for basic goods including bread, cooking oil and dairy products, by between 100% and 300%. Thousands turned out to protest.

Lebanon is the region’s basket case. Having defaulted on its debt in March 2020, the government barely functions. Over 80% of Lebanese live in poverty and everyone faces hyperinflation. The situation has worsened this year because Lebanon imports over 60% of its grain from Ukraine and Russia.

A comparable disaster is brewing in El Salvador. Under the populist, authoritarian leadership of President Nayib Bukele, the country has enthusiastically embraced Bitcoin both as a reserve currency and as legal tender nationwide. The cryptocurrency selloff has likely pushed El Salvador toward a default next January, when $800 million of sovereign bonds are due.