Great riddle!
You are
CASHEW
My prefix is the ruler of all our lives.
CASH. Cash plays an integral role in our day to day lives.
My suffix hints us thrashing knives.
HEW. Thrashing knives could mean chopping at an object, since knives are made to chop. Hew means precisely this.
My infix before the fire was a cane.
ASH. Ash is what is the remains from plant material being burnt. This line points at Ash before being (in contact with) the fire was a cane.
My whole pretends that it's insane
CASHEW is a nut and nuts can mean crazy, it is a false craziness craziness only sharing the term but not the meaning.