These past few days, everyone has been focused on the US-China trade war, but the real bombshell has been detonating on Wall Street.
First, BlackRock, the world's largest asset manager, directly restricted client redemptions—receiving only 5% of the 9.3% withdrawal rate, with the remainder being forfeited. This is called "liquidity management," which is essentially defaulting on debts. Following suit, Blackstone and Burning Capital also froze redemptions. These three giants collapsing simultaneously triggered a full-blown default in the $3 trillion private lending market.
Second, oil prices surged 12% in a single day, breaking through $90. With the Strait of Hormuz blocked, inflation immediately rebounded, the Fed's rate cuts became impossible, and the risk of stagflation reached its peak.
Third, non-farm payrolls not only failed to rise but actually fell, with the unemployment rate soaring to 10.4%. Goldman Sachs bluntly stated that the US economy has already fallen into the quagmire of stagflation.
These three seemingly isolated events are actually part of a closed causal loop: geopolitical conflict drives up oil prices → inflation rebounds → employment deteriorates → private lending collapses → systemic risk explodes.
Even more critically, Iran is using drones costing tens of thousands of dollars to consume millions of dollars worth of US interceptor missiles. If Iran produces 100 missiles a month, the US can only produce six or seven interceptors. How can this war be fought?
US military experts lament: Even Iran can't afford this kind of trade-off; how can they compete with industrialized nations in terms of production capacity?
Trump is now caught in a dilemma: withdrawal means geopolitical bankruptcy; fighting means no money, no manpower, and no missiles. Domestic credit is collapsing, inflation is out of control, and employment is shrinking—one wrong step leads to another.
History is never new: the Vietnam War crippled the US economy, and the stagflation curse plagued the country for a decade. Today, the script is being rewritten.
The Federal Reserve has only one option left: quantitative easing to rescue the market. Inflation is always better than stagflation. But the bomb has already exploded; will it become a chain reaction of bombs? Will it surpass the situation in 2008?
