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As everybody knows the FED since 08 has been printing so the US government could borrow and spend to keep a moribund economy afloat. This has led the US to the point where it is imperative for the FED to reduce their Balance Sheet and raise interest rates to give incentive to buyers in a world awash in USD's and US debt. In 2013 FED President Bullard on CNBC said that the FED could go to 7T on the balance sheet without a problem. Extrapolate that by 7 or 8 years having a larger economy the FED Red Line increased to the mid 9T to 10T range. Where the FED with the pandemic got to roughly 9.3T on the Balance sheet before they started to reduce the Balance sheet. In 2019 Chairman Powell told the Trump admin that they had to spend big in order to jump start the economy as FED policy had reached the extremis of Monetary Policy. Hence with former FED Chairwoman Yellen at Treasury that is exactly what the US govt has done. With so much debt the FED had to start rising interest rates to make that debt attractive to buyers. Lest it go unsold. This in essence has left the FED in Checkmate.

With so much US debt and USD's on the float the intrinsic value of the USD is greatly diminished where Inflation reared it's head as prices on commodities and goods had to rise to maintain an equilibrium with the USD. The effect of this on the US consumer who has seen his wages remain stagnant since 1975, has no savings and has reached his credit limit is that he can no longer afford to consume. It has come down to a choice of either buying groceries and paying bills or buying a new TV. Eating is necessary and TV's are not. This has been reflected by Walmart having to discount it's general merchandise to clear inventory that is not selling. Thus DEMAND DESTRUCTION is now occurring.

This in effect is a REVERSAL OF THE BENEFITS OF A GLOBAL ECONOMY OF SCALE. The benefits of an economy of scale is, that the more units that are produced the lower the cost per unit. (The manufacturer has fixed costs of infra structure and financing) With a REVERSAL the fewer units being produced to meet actual demand raises the manufacturers unit cost, which cuts his profit margin as he can not raise pricing but has to continue to lower them to entice financially strapped consumers.. This will continue in a vicious downward spiral until the manufacturer has no profit margin left and the economy slowly grinds to a halt. In other words a deeper and deeper ongoing recessionary environment.

There is no realistic nor rational solution that will reverse this trend. Humpty Dumpty was broken in 2008 for anyone who cared to notice, as the circumstance that caused the Great USA Post WW2 Prosperity Boom, that created a broad based American Middle Class with pockets full of money no longer exist with Globalization and the competition therein. Now comes the return to reality and the great economic leveling.