Just over a year ago, financial markets were staring into a dark abyss. Entire nations had been locked down, the retail industry was on its knees and an unemployment apocalypse was raging. Fear was king and the world economy seemed destined for another Great Depression. But it turns out that even a global pandemic is no match when governments and central banks join forces to fight a crisis.
The combination of extravagant government spending and ultra-low interest rates was so incredibly powerful that it eclipsed everything else, restoring peace to global markets. Once the vaccines were announced too, investors could finally see the light at the end of this nightmare and a sense of euphoria took over.
Fast forward to today. Most economies are healing their wounds, yet some are recovering faster than others, thanks to a divergence in the amount of fiscal firepower deployed and…