loss of liquidity is a loss of confidence by those holding the wealth/capital.
I think the FEDs doing these injections will distort the price of money in such a way that risky activities would be seen as less risky, and so spirals into further illiquidity when something bad hits the fan (again), and the FEDs will need to inject again.
The businesses failing needs to happen. The capital losses needs to happen. Like a forest fire - new growth can't come if the old capital doesn't die (i.e., those controlling the old capital is constantly being protected from downsides, which this illiquidity represent).
We are not in a period of moderate correction, trimming non-viable deadweight. We are in a mass economic extinction of healthy and successful businesses.
The Fed can inject liquidity, but it falls to Congress to generate demand when the economy cannot. The Fed's best move would be to commit to backing any level of spending passed by Congress and signed by the President.
