Today Fed chairman Ben Bernanke will give his last press conference as Fed chairman. Mainstream media is fawning all over Bernanke and what he has done as Fed chairman. I say, good riddance.
Phil Izzo at WSJ reminds us of how great an increase in the monetary base has occurred under Bernanke:
A good chunk of this money has ended up as excess reserves at the Fed and is not in the system, but it is a massive overhang that threatens to deliver a giagantic wallop of price inflation if it does enter the system.No matter what the Fed decides to do today with its $85 billion of bond purchases a month, the assets on its balance sheet are likely to surpass $4 trillion for the first time this week.
Assets on the Fed’s balance sheet sat at around $3.99 trillion as of Wednesday Dec. 11. The level has climbed by more than $1 trillion over the course of 2013 as the central bank continued its bond-buying program launched in September 2012.
The balance sheet is up from less than $1 trillion prior to the recession.
Meanwhile, the new money that has entered the system has distorted the economic structure of the economy, which has resulted in a booming manipulated stock market that will ultimately result in a crash. Nice job Bernanke. Good riddance.