What's Really Behind Bernanke's 'Quantitative Easing II'?

It's clear that Fed Chairman Ben Bernanke is out of control. His latest gaffe: blaming China for the failure of QE2 to spur anything but fear.

In speeches before a European Central Bank conference in Frankfurt, Ben Bernanke went on an unprecedented attack, accusing China of throwing a monkey wrench into the global recovery, blaming China for slow global growth and a potential "End to the Tepid U.S. Recovery".

He also said "The current international monetary has a structural flaw" calling on the "global community, over time, to devise an international monetary system that more consistently aligns the interests of individual countries with the interests of the global economy as a whole."

Finally, he put up a misguided defense of Quantitative Easing that is sure to not go over well in the global community.

If Bernanke was trying to spook the markets, provoke China, cause a currency war, and get Congress to launch an extremely foolish set of tariffs, he would have been hard pressed to deliver a more powerful speech.

Blaming China for America's out-of-control spending is a little like pinning Michael Moore's ever-expanding gut on Ronald McDonald.

Bernanke said that China’s decision to undervalue the yuan has essentially thrown a monkey wrench into the global economic recovery... The result could be slow growth ahead “for everyone,” he said.

...“On its current economic trajectory, the United States runs the risk of seeing millions of workers unemployed or underemployed for many years,” Bernanke said.

Monetizing the debt -- which simply means the United States is being forced to conjure money from thin air to fund the operation of the government -- is an ominous sign by itself. Combined with harsh rhetoric against the country's biggest creditor, the Fed's policies are well nigh suicidal.

Andy Kessler, writing in The Wall Street Journal, explains the likely rationale behind Bernanke's erratic behavior.

Federal Reserve Chairman Ben Bernanke's $600 billion quantitative easing program has been roundly criticized in this country and around the world. So why is he doing it? Does he know something the rest of us don't?

...I have [an] explanation for the Fed's latest easing program: Without another $600 billion floating through the economy, Mr. Bernanke must believe that real estate (residential and commercial) would quickly drop, endangering banks...

...Mr. Bernanke is clearly buying time with our dollars. If real estate drops, we're back to September 2008 in a hurry. On Wednesday, the Fed announced that all 19 banks that underwent stress tests in 2009 need to pass another one. This suggests central bankers are nervous about real-estate loans and derivatives on bank balance sheets...

Rather than use his bully pulpit to harangue the President and Congress into sane spending policies, Bernanke instead is attempting a triple-reverse handspring off the high-beam. Odds are it ain't gonna work.

Only when we excise the cancerous lesions -- Fannie Mae, Freddie Mac and the other market-distorting entities -- can we return to a level of predictability and stability. But don't hold your breath. Facts, logic and reason have never been the Democrats' forte.