The real disconnect in this entire equation is the fact that policy-makers only bailed out the wealthy lenders and not the struggling middle class who are still expected to make good on all of their massively accumulated debts and ongoing inflated financial obligations. So while policy-makers have fooled themselves into thinking that they can indefinitely sustain inflated asset prices, via liquidity programs, they seem to have forgotten that the solvency (aka. interest and principal repayment) on these $200 trillion of global capital assets depends solely on the health and economic vitality of the middle class, which never got any bailout. Meanwhile, these massive deficts that every developed country has been forced to accumulate over the past four years are all attributable to the 2008 financial collapse. So Central Banks are now assuming that the middle class can sustain its own debts on top of the massive public debts arising from the bailouts and ensuing fiscal deficits, all while facing declining real incomes and diminishing job prospects.
Here's $9 Trillion of Newly Printed Free Money, Go Have Fun...
The other risk amplifying factor that differentiates this period from 2008, is the amount of leverage now available to well-connected speculators. Global Central Banks have added $9 trillion of highly leveraged hot money to world financial markets in the last four years. Unwinding those leveraged carry trades in the teeth of another asset deflation, is going to make 2008 seem like a child's picnic.
The critically flawed assumption of all these greed addled fools is believing that the Middle Class can be milked into oblivion, with no consequence to the wealthy.