We are in a circular disaster that is rabidly getting smaller until it finally forms a singularity where banks start dropping very fast.

I've been trying to understand what is going on with the banks and I wanted to lay it out here to see if i'm understanding this correctly.

Government prints trillions of dollars over past couple years and drives inflation sky high. To counter this they do QE and raise interest rates. Inflation is so bad that the amount of QE is too hard on banks so they start failing. Government then prints more money to bail them out but that undoes the QE they have done and we are back to where we started. If government starts QE again banks will start to fail again which leads to either collapse or more bail outs which means more inflation.

Janet yellen has basically said smaller banks will not be bailed out and deposits of any size will not be insured by fdic unless they see it as a big enough risk to the economy which is causing runs on banks.

It seems like they are stuck in a circular cycle where the circle is quickly getting small and small until it all comes crashing down. Is it seriously as fucked as i think it is or do they have other options?