Are you confused by the word 'stagflation' when scrolling through financial news every day? Today, I will present a picture to all the brothers to clarify this matter. Let me give you the most straightforward definition: stagflation, which is a terminal illness in which the economy suffers from both stagnation of economic growth and inflation. On one hand, the economy is completely flat: consumption and investment have cooled down, factories have closed down, unemployment rates have skyrocketed, and ordinary people have no money in their pockets and dare not spend it; On the other hand, prices are skyrocketing like crazy: the money in hand is becoming less valuable day by day, everything is expensive except for wages not rising. The most frustrating thing is that this disease cannot be treated with the right medicine: When the normal economy cools down, the central bank cuts interest rates and releases water to stimulate people to spend money and invest, and the economy heats up; Normal prices have gone crazy, and the central bank has raised interest rates and collected water. Everyone saves money and doesn't spend it recklessly, and prices have been suppressed. When stagflation comes, both of these operations become a dead end: raising interest rates to suppress inflation, the economy will collapse directly for you to see; Interest rate cuts save the economy, and prices skyrocket directly. The metaphor in the picture is too accurate: it's like a person who has a high fever and feels cold all over, covering themselves with a blanket for fear of burning their brain, and using an ice pack to cool down and make their whole body tremble, pure and pure in a dilemma. This is not the first time it has happened, the most classic being the 1970s American oil crisis. OPEC imposed a direct embargo, causing oil prices to skyrocket and leading to a direct increase in production costs for companies, resulting in price hikes; High oil prices have squeezed out the money in the pockets of ordinary people, causing consumption to shrink directly. Factories have no orders and can only lay off employees. The unemployment rate has skyrocketed, and people have no money to consume. Prices are still rising, directly locking in a vicious cycle. The United States has been tormented by this wave of stagflation for a whole decade. Why is the whole internet now shouting about the risk of stagflation in the United States? You can understand by looking at the recent data: the impact of global energy price increases has come again, the US PPI has risen beyond expectations, and the momentum of rising inflation cannot be suppressed; On the other hand, the economic growth in the United States has already been weak, the labor market has also softened, and the pressure on business operations is increasing. With the rise of oil prices, the purchasing power of ordinary people has been cut, and consumption has become even cooler. Previously, the market was betting on when the Federal Reserve would cut interest rates, but now it has turned its back and started trading on stagflation risks. The expectation of interest rate cuts has been pushed from March to June this year without any certainty, and the style of the capital market has undergone a sharp turn. Finally, a word of truth to all brothers: during the stagflation cycle, the most important thing is to avoid blindly chasing hot topics and speculating. Assets that can withstand the cycle, have stable cash flow, and have real pricing power are the true safe havens.