Why Does the World Suddenly Look So Rich?

The Mirage of Global Liquidity and What It Reveals About Our Time

In recent years, a kind of brightness has spread through economies and cities alike. Prices climb across markets, new fortunes appear overnight, and the tone of daily life carries an ease once rare. The movement feels constant, though its foundations remain hard to see.

Observable Wealth

Across global markets, signs of prosperity have become difficult to ignore. Equity indices set new records, property values surge, and capital appears abundant. The extended period of monetary easing since 2020 has pushed global liquidity to unprecedented levels [1]. Persistently low interest rates have encouraged borrowing, driving both consumption and leverage.

Technological optimism has amplified this motion. Investment flows concentrate in artificial intelligence, green energy, and semiconductor industries, each framed as the foundation of the next economic era. Venture capital entering these sectors reached record scale, creating valuation cycles that appear self-sustaining [2].

Households and institutions alike have learned to expect rising asset prices. Real estate in major cities continues to climb, while retail investors now move through markets once reserved for large funds. Access has widened, and with it, the belief that prosperity is general.

What appears as prosperity often starts in less visible places, within the steady movement of credit that shapes how value travels through the system.

Hidden Mechanisms

Behind visible markets lies a system of quiet expansion. Shadow banking and non-bank intermediaries circulate liquidity through complex instruments, rarely captured in public accounts. Persistent data gaps exist in these networks, where leverage and collateral chains extend across borders [3].

Central banks continue to play an unseen role. Since the global financial crisis, balance-sheet operations and quantitative easing programs have injected reserves far beyond traditional money creation. These policy tools reshape financial plumbing itself, altering how liquidity moves even when policy rates remain steady [4].

Government and corporate borrowing sustain this structure. Record debt-to-GDP ratios persist, supported by cheap funding costs [5]. Debt becomes both fuel and foundation, giving the illusion of stability through continuous renewal.

When money once required gold to exist, its limits were visible. Now, value expands through balance sheets and credit chains that few can trace. The mechanism works as long as confidence holds.

Digital Liquidity and Regulation

A newer layer of liquidity operates in digital form. Stablecoins and tokenized cash blur the boundary between regulated money and speculative assets. Tokenized settlements promise faster payments yet introduce structural risks when reserves are opaque or dispersed [6].

Regulation is beginning to catch up. The EU's MiCA framework [7] and the U.S. GENIUS Act [8] both aim to anchor digital tokens to transparent backing, recognizing their growing systemic weight. Each jurisdiction defines stability differently, revealing how money itself has become a matter of interpretation.

Digital liquidity now moves with the speed of code. It carries no physical boundary, only the shifting confidence of those who hold it.

Geopolitics of Liquidity

Flows of capital increasingly follow political lines. Sanctions, trade realignments, and regional conflicts redirect investments as effectively as interest rates. Asset movements now reflect security calculations as much as returns [9].

War, energy transitions, and data-control policies reshape what safety means in finance. Regional fragmentation produces uneven liquidity, clustering capital where alliances promise stability while draining others under tension [10].

Liquidity today is both monetary and geopolitical. It travels through alliances as much as through markets, carrying with it the narratives of trust and fear that sustain value.

Reflection

Each cycle of expansion leaves its outline behind. The mechanisms explain how prosperity expands. What remains uncertain is how long the pattern can sustain itself.

Across decades, every boom carries a language that justifies it. The current one speaks in efficiency, innovation, and access. Yet beneath those words lies the same architecture of belief: that credit can stretch further, that risk can stay contained, that tomorrow will validate today's price.

Distance reveals the structure more clearly. When movement slows, the brightness fades, and the machinery underneath becomes visible again. What the world calls wealth may still exist, only rearranged, waiting for the next story to give it shape.

References

[1] International Monetary Fund. Global Financial Stability Report. April 2023.
https://www.imf.org/en/Publications/GFSR

[2] McKinsey & Company. Digital Economy 2023.
https://www.mckinsey.com

[3] Financial Stability Board. Global Monitoring Report on Non-Bank Financial Intermediation. December 2023.
https://www.fsb.org/publications/

[4] Bank for International Settlements. Unconventional Monetary Policies and Financial Stability. Working Paper No. 570. 2016.
https://www.bis.org/publ/work570.htm

[5] Organisation for Economic Co-operation and Development. Sovereign Borrowing Outlook. 2023.
https://www.oecd.org/finance/

[6] McKinsey & Company. The Stable Door Opens: 2025 Perspective on Stablecoins. July 2025.
https://www.mckinsey.com

[7] European Union. Markets in Crypto-Assets (MiCA) Regulation. 2024.
https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/digital-finance_en

[8] United States Congress. Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. 2025.
https://www.congress.gov/

[9] S&P Global. Top Geopolitical Risks 2025.
https://www.spglobal.com/en/research-insights/

[10] International Monetary Fund. World Economic Outlook: Geoeconomic Fragmentation and Its Consequences. October 2024.
https://www.imf.org/en/Publications/WEO