The Bernanke Fed has followed Greenspan in its complicity with the congress and the executive spending spree only it has done one better. In addition to aggressively engaging in open market operations with the public, it has also bought treasurys directly from the Treasury, and purchased $2 trillion and counting in asset-backed securities. The question is why? Why is the Fed acting in concert with the president and congress? Isn't it curious that if borrowing and spending got us into this mess, that the Fed would endorse a policy of more borrowing and spending rather than fiscal restraint? The only answer I can come up with is that Bernanke wants to be reappointed to another four year term as chairman. If he exercises his independence, then Obama would likely appoint some else, like Larry Summers, who is one of the chief architects of this financial irresponsibility.
What makes Bernanke's actions so troubling is that the Fed, being independent, is also not accountable. It refuses to reveal who it has loaned to and what amount. Congress can change all this by changing the Federal Reserve Act. Maybe it is time to do just that. In that manner at least the public will be informed as to what its government is doing. Lastly, Bernanke's complicity, the incredible surge in bank reserves, the monetizing of the national debt have led me to conclude that it is time to take money creation out of the hands of the Fed. Do I hear "gold standard"?