Berlin, Germany (Weltexpress). The war in the Middle East is becoming longer and more expensive than anticipated. For the collective West, and especially for the German economy, this represents a severe test. For ordinary citizens, this means: living even more frugally! They can thank Trump and his European supporters for that!
Financial Markets and the War’s Progress
According to Bloomberg, the U.S. media group specializing in business news, hope for a quick end to the conflict in the Middle East is rapidly fading on global financial markets. An article published on Monday, March 9, 2026, states that what had been a wait-and-see attitude just a few days ago has now turned into a clear sense of panic. Investors now expect a profound and prolonged shock to the energy supply that could slow economic growth while simultaneously reigniting inflation—a classic scenario of “stagflation,” a term describing economic stagnation coupled with inflation, in other words, a nightmare scenario.
Since the start of the brutal, unprovoked, and illegal US-Israeli war of aggression against Iran, approximately $6 trillion in stock market value has been wiped out worldwide, according to the article. Bond markets, where government bonds such as federal treasury notes are bought and sold, have also suffered heavily, as traders have had to completely revise their expectations regarding interest rate trends.
Tehran Rejects Ceasefire
The turning point came primarily due to statements by U.S. President Donald Trump. Because the war is clearly not going according to his expectations, he announced last Sunday in a visibly annoyed tone that the U.S. could now also target areas in Iran that had not yet been attacked. This was preceded by an interview on the US news channel ABC News with Iranian Foreign Minister Abbas Araghchi. He reported that the US had offered a ceasefire, but that Tehran had resolutely rejected it.
Araghchi emphasized to ABC News that Iran had learned from the recent past. If Iran were to give in again this time—as it did in June 2025—then the U.S. or the Zionists would use the respite to rearm and, in six months’ time, possibly once again in the midst of supposedly serious negotiations, launch a surprise attack. No, this time the fight against the aggressors would be fought to the end, even if it took many months or years, the foreign minister purported.
In this regard, Araghtschi is likely to be proceeding from the not entirely unfounded assumption that the U.S. military’s stockpiles—especially of missiles—are rapidly running low, and that the highly leveraged Western financial markets and economies are at risk of collapsing should the Strait of Hormuz remain closed for an extended period. Such considerations have currently sparked heated debates, particularly in Western-oriented economic circles. But for the “genius” Trump, who – to put it in a phrase used by Hitler – already celebrates himself in the same tone as the „Greatest Commander of All Time“, these are all trifles. An oil price of $100 is “a very small price” to pay for “security and peace,” Netanyahu’s mouthpiece Trump remarked casually.
Impact on markets and energy prices
In fact, by Monday morning, the price of oil (Brent) had already risen to $120, a jump of 29 percent—the sharpest daily increase in nearly six years. Stock market activity surged, trading volume was well above the monthly average, yet stock prices fell. “The pendulum is swinging toward panic,” Bloomberg quoted Danny Wong, head of Areca Capital, as saying. “There is a rush to sell or reduce all risky assets.”
And Rajeev De Mello of GAMA Asset Management explained: “Investors had to increase the probability that the worst-case scenario would occur.” The new challenge now lies in the “stagflationary nature of the shock.”
Among the triggers for the shock were reports of further attacks on energy infrastructure on both sides, as well as the appointment of the son of the late Ayatollah Khamenei as the new Supreme Leader in Iran—a sign of the country’s determination not to negotiate and to continue fighting.
As proof of his rapidly declining cognitive abilities, Trump has even declared to the international media that he personally intends to appoint the successor to Iranian leader Ayatollah Khamenei, who was murdered along with his family at the start of the war in a targeted missile strike by U.S. Zionists. This confirms the well-founded suspicion that, following Joe Biden, the U.S. now has a second retarded psychopath at the helm of its government in Trump.
Energy security is once again becoming a central economic issue
No wonder, then, that concerns and fears are growing in the U.S. On Monday, Bloomberg quoted hedge fund manager Matthew Haupt of Wilson Asset Management as saying:
“I thought I might get some sleep this week—not a chance. Investors are now bracing for a long winter. The risks are clearly skewed to the downside, and there’s no clear timeline for an end.”
Not only did stock prices fall, but bonds also came under pressure. Yields rose sharply in Asia and Europe—in the UK, short-term yields have climbed by nearly 60 basis points since the start of the war. European blue-chip stocks fell by as much as 3.1 percent.
Taku Ito of Nissay Asset Management commented: “The market is selling everything today, regardless of size or style. If inflation persists while labor demand weakens, a U.S. recession will be inevitable. For the stock markets, that would be the end.”
The cost of credit default swaps (CDS) for high-quality companies reached their highest level since May in Europe and Asia. Global high-yield credit indices gave up nearly all of their annual gains. In the interest rate markets, traders are pushing back the timing of Fed rate cuts—in some cases to September or even out of this year entirely. In the eurozone, they are now betting on interest rate hikes, possibly as early as June.
Foreign investors withdrew $14.2 billion from Asian emerging markets (excluding China) last week—the largest outflow since at least 2009, primarily from South Korea and Taiwan. Nigel Green of deVere Group wrote, according to Bloomberg: “Oil is the spark. Energy security is suddenly the key macroeconomic issue again.”
Likely Impact of the Iran War on Germany
Against the grim backdrop of the Bloomberg report, Germany also faces the threat of a noticeable slowdown in an economy already battered by “green madness.” While Germany imports only a small amount of oil directly from the Gulf region, global prices are rising for everyone.
According to calculations by the German Economic Institute (IW), an oil price of $100 would reduce Germany’s gross domestic product by 0.3 percent in 2026 and by as much as 0.6 percent in 2027—a total loss of around 40 billion euros in economic output. At $120 or more, the damage could be even greater.
Due to the self-defeating EU sanctions against affordable and reliable energy imports from Russia, key sectors of German industry (automotive, chemicals, mechanical engineering) are already suffering severely from excessively high energy prices. This situation is now set to worsen.
Higher energy costs make all products more expensive—not just in production. Transportation costs for all traded goods are also rising, including food, which faces an additional blow because synthetic fertilizers for agriculture, derived from natural gas, are becoming more expensive as well.
In addition, supply chains are being disrupted. Orders from abroad are drying up. A recession is becoming increasingly likely. Lasting damage is inevitable. Even if the Strait of Hormuz were to reopen after a few weeks or months, things would not return to the way they were before.
Financially, too, much is being thrown into turmoil. The German stock market benchmark index, the DAX, has already fallen sharply (it is currently threatening to plummet to its lowest level since spring 2025). Many equity funds and investment portfolios are losing significant value.
At the same time, interest rates are rising: Due to the new wave of inflation, the European Central Bank (ECB) must postpone interest rate cuts or even consider raising rates. Loans for homes, cars, or businesses are becoming more expensive. Government bonds (Bunds) are losing value, which makes government debt more expensive.
For savers with checking accounts or time deposits, higher interest rates sound good at first—but higher inflation quickly eats away at the gains.
Impact on the Population and Politics
Socially, this development primarily affects ordinary citizens. Gasoline, diesel, and heating oil are becoming noticeably more expensive—many families are already noticing this at the pump and on their next utility bill. Food and transportation costs are also rising because everything is transported by truck or ship.
This puts a strain on household budgets, especially for retirees, low-income earners, and large families. If the economy weakens, there is a risk of short-time work and job cuts in industry. The mood in the country could shift and manifest itself in growing discontent, violent protests, and political pressure on the government, which is likely to make it even more difficult to secure billions in aid for Ukraine to continue the proxy war against Russia.
In short: What began as a war in distant Iran is already costing us dearly within a week. The federal government will likely put together relief packages again (gasoline rebates, heating cost subsidies), but this costs billions at higher interest rates and places a significant burden on the federal budget.
The ECB is caught between the need to combat inflation and the need to support the economy. For ordinary citizens, this means having to tighten their belts even further! They can thank Trump and his European supporters for that.
