What's more, Bernanke's boast that he has held inflation down remains true, at least through fourth-quarter revised GDP. Both the GDP deflator and the chain price index have increased only 1.8 percent, and show no signs of acceleration.
And the gold price is hovering around $1,600. It really hasn't moved over the past year. Nor has it budged since the Fed instituted its latest quantitative-easing, bond-buying policy last September. Even more interesting, King Dollar continues to strengthen. In fact, the greenback has gained ground since the Fed's September quantitative easing announcement.
As I've said before, the gigantic increase in the Fed's balance sheet, which will run close to $4 trillion later this year, makes me very uneasy. And if the velocity turnover of money does pick up in the future, there will be an inflation problem that will be very difficult for the Fed to unwind. Can it sell its massive bond portfolio in a timely fashion? No one can say.
But at the moment, looking at the numbers, I'm going to give this round to Bernanke and his market-monetarist supporters. There is no massive printing-press money, no huge inflation jump, and certainly no overheated economy. With the U.S. economy rising at perhaps 2 to 3 percent in the first quarter, which is much better than the economies of Europe and Japan, and with the U.S. stock market hovering near record highs, I would have to characterize my stance as relatively optimistic, but certainly not irrationally exuberant.
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However, I continue to disagree with the Fed chair on fiscal policy. We need more government spending cuts coupled with serious tax reduction for large and small companies in order to boost this economy without injecting more and more money. This supply-side policy would deliver a much more predictable and reliable path to prosperity.
But on monetary matters, it may just be that the Bernanke Fed is right where it should be.
—By CNBC's Larry Kudlow; Follow him on Twitter @larry_kudlow