The stagflation of the 1970s caused significant changes in American financial habits, including the increased use of credit cards and short-term investment accounts.

“one of the things that it does that people don't pay a lot of attention to that I find fascinating is that this is when the idea of credit cards takes off because it is literally cheaper for you to borrow money at the beginning of the month and pay it back at the end of the month”

The global financial system is structurally designed to end in a period of stagflation.

“I think uh stagflation is uh effectively the system is designed to to finish in uh stackflation in my view.”

Tony Zhang believes the market is currently in a stagflationary environment.

“And the reason we're looking at small caps right now is because small caps is going to be a little bit more sensitive to the stagflationary environment that we're going to be in-- or a stagflation environment that we are in right now.”

The combination of rising unemployment and rising inflation presents a significant risk of stagflation that is detrimental to the market.

“And when you have rising unemployment and rising inflation at the same time, which we may have, we're going to get a few more reports, then that's that's, you know, getting perilously close to stagflation. And that is really bad for the market.”

He suggests investors should lower their return expectations for private credit, as it is a less liquid and riskier market than some anticipated.

“I think the whole outcome, the upshot for me would be one of the one hand, curb your enthusiasm about private credit returns, they are not going to be 20%. They may be closer to less than 10%. Also curb your enthusiasm about this market.”