Ben Bernanke’s Unintended Consequences
The good news?
Ben Bernanke has confounded naysayers, and proven that The Federal Reserve really can resuscitate (levitate?) the stock market — now up 85% from The Crash of ’08 lows.
By printing money — lots and lots of money — and driving interest rates into the toilet (and keeping them there).
The bad news?
There are a lot of side effects.
–A declining U.S. dollar
–Racing commodity prices (filled your gas tank lately?)
–Spiking gold and silver
–Food inflation, especially in poorer, more vulnerable countries
–Trillions in new U.S. debt
–Myriad new bubbles(?) inflated by yield-starved investors fleeing cash
Benefit – Cost Analysis
Which leaves the question, “was the Fed’s ‘monetary activism’ good policy?”
Unfortunately, when you apply a cost-benefit analysis, what seems clear (at least to me) is that the benefits have been bestowed on a small class of individuals (Wall Street, wealthy investors), while the costs have been imposed on a much broader and more vulnerable swath of society (savers, the poor and middle class, retirees).
Two and 1/2 years after The Crash, what (still) seems hardest to swallow is not just the lack of accountability for those most responsible, but the fact that the rescue effort, incredibly, actually served to (further) enrich the same individuals.
That ain’t how the system was supposed to work . . .