Capital‑market expert Mohamed El‑Erian describes today’s markets as being at a “tipping point”. In the third week of the conflict in Iran, he warned in a Handelsblatt podcast that the war could bring long‑term effects on both global capital markets and the world economy.
El‑Erian also cautions that the Iranian war may still expose hidden problems within the United States, particularly in credit‑fund sectors. Additionally, he discussed the implications of a stagflationary shock-an episode in which inflation rises while economic growth stalls. “In such a scenario, both stocks and bonds are sold off. Portfolio diversification loses its power” he said. “Cash is preferable, but under high inflation the real value of cash holdings inevitably erodes”.
