The US economy was already showing sign of distress in September 2019 when the Federal Reserve had to conduct repo action by pumping hundreds of billions into the market. The covid-19 pandemic simply amplified the distress. The Fed created so much new money out of thin air to enable the US government to provide stimulus package to the economy in March 2020. The balance sheet had set new record. The G4 (US, EU, UK, Japan) balance sheet will grow from USD 16.5 trillion in 2019 to 29.5 trillion in 2022.
(What is a repo ? When enacting a repo operation, the US central bank buys government securities from banks with predetermined repurchase dates. The offerings create temporary liquidity for the financial system, adding more funds to the plumbing that connects banks, accounts, and transactions.)
Sadly, all these monies went to bankroll the government debt and backstop all the bonds of almost all major corporations including zombie ones. Think of what the zombie CEOs would do with the easy helicopter money. They bought back the shares of the companies and sent the stock market into record frenzy heights creating the biggest disconnect between the stock market and the real economy. No longer is the stock market the barometer of the health of the economy. While the big corporations, including zombie corporations, have easy access to such money, the SMEs will close in record numbers.
Imagine how the rich and the poor Americans will spend their stimulus check of USD 1200. The rich will have no need of this money and put it in stock or Bitcoin and putting this USD 1200 into Bitcoin in March 2020 will yield USD 4000 in Jan 2021, while the poor will have spent it on basic necessities. This has caused the biggest rich and poor divide. The rich gets richer and the poor gets poorer.
The interest rates from central banks are now at record low between near zero to negative even. Imagine now the failing states like Italy, Spain and Portugal continue to get zero or negative interest loans from ECB to bankroll their deficits indefinitely. The central bank of Japan is now the only sole buyer of the government bonds and the government now owns 50% of the stock market. Italy, Spain and Portugal are imitating what Japan is doing.
I can see no solution at all except for the G4 central banks to continue to print money to finance everything without any end in sight.
How will this crazy imbalance end ? I believe the judgment of all wealth by God mentioned in Rev 18 will be the final outcome. The wealth of US and all who grow rich because of her will be destroyed. All the kings of the earth (governments), merchants (global MNCs, SMEs and their supply chain components) and those who make their living by the sea (global ports cum financial centres) will weep when the judgment comes. I believe the prophecy in Scripture – that the fourth empire under the Antichrist will emerge to lead the disillusioned world – will be fulfilled after this destruction of wealth.