Liz Peek in Fiscal Times

If you’re wondering why the rich are getting richer, ask Mr. Bernanke.

President Obama has accused Mitt Romney of being a “reverse Robin Hood” – taking from the poor and giving to the rich. Ironically, that’s exactly what Fed Chair Ben Bernanke is doing, with the blessing of the Obama White House. Mr. Bernanke has again opened the central bank spigots, promising another round of quantitative easing, or bond and asset purchases, aimed at keeping interest rates low for the foreseeable future.

The upshot? Rising gasoline prices which will hurt low-income Americans, reduced income for retirees, and soaring stock prices. While seniors worried how they could cope with diminished incomes, the 40 wealthiest people in the world saw their net worth jump by $29 billion this past week.

This is not a fantasy. In his press conference following the policy announcement, Mr. Bernanke agreed that his plan would “affect stock prices.” He was right. Since the first quantitative easing was initiated in 2008, stock prices have soared over 60 percent. More recently, on the day the Fed announced its new, open-ended purchase program, the Dow Jones gained 1.5 percent; more important, both the Dow and the Standard & Poor’s index hit their highest levels since the end of 2007.

Why this exuberance? Because traders understand that flooding our monetary system with hundreds of billions of new dollars will crush yields, leading return-hungry investors into higher-risk investments like stocks. The joy was not limited to our shores; stocks in Asia and Europe celebrated as well.