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Hey, don't blame us for your problems. That's the message Federal Reserve Chairman Ben Bernanke delivered -- in appropriately polite and academic tones, of course -- to the central bankers, finance ministers and others assembled last weekend in Tokyo for meeting of the International Monetary Fund and the World Bank. If anything, you ought to be thanking us for all we've done to flood the global financial system with liquidity, which has helped, not hindered the world's economy.

As if to underscore the point, New York Federal Reserve Bank President William Dudley -- one of Bernanke's chief lieutenants in his status of vice chairman of the policy-setting Federal Open Market Committee -- asserted in a speech Monday that, if the U.S. central bank erred in its policy, it was in not being aggressive enough in its extraordinary actions to balloon its balance sheet.

Critics -- who range from the finance minister of Brazil to the governor of Texas -- assert the opposite: That the Fed not only has failed to spur real growth but mainly has pumped up prices. That's been a boon for wealthy investors who have benefitted from lift in asset prices, but a bane for middle- and lower-income consumers who have to pay more for food and fuel.

Other critics have raised equally pertinent points. At some point, the Fed will have to reverse course and start selling some of the trillions in Treasury and mortgage-backed securities it has accumulated, which could crash the bond market. And if the U.S. central bank and its counterparts abroad fail to do so to curb inflation, history offers dire examples of the effects of hyperinflation -- not just on financial markets, but on society as a whole.

In what seems to be his most forceful rebuttal of his international critics, Bernanke takes to task those especially in the emerging-market economies who accuse the U.S. of starting a "currency war" by driving down the dollar through the Fed's quantitative easing. The excess liquidity created by the Fed rushes into emerging markets as investors seek higher returns, destabilizing those markets and economies, the critics contend.

Bernanke says the Fed's policies haven't been the main spur to capital flows into emerging markets. Anyway, those governments could offset the effects by letting their currencies appreciate and the markets adjust, he asserts.

In the real world, however, other nations have to cope with the twin problems of a stronger currency hurting export competitiveness, and thus employment. At the same time, higher commodity prices hits their population especially hard since the cost of necessities such as food and fuel comprise a much larger share of their spending than Americans'.

But even for U.S. consumers, who enjoy relatively cheap food and energy costs compared to the rest of the world, the Fed's successive rounds of QE have produced diminishing returns in stock prices but painful increases in the prices of these necessities, according to Lacy Hunt, chief economist of Hoisington Investment Management. That actually has retarded economic growth, he concludes.

During QE1 and QE2, wholesale gasoline prices jumped 30% and 37%, respectively, while the food component of the Goldman Sachs Commodity Index rose 7% and 22%, respectively. Meanwhile, the Standard & Poor's 500 gained 36% and 24% during those respective spans. From the time media reports indicated QE3 was likely, gasoline and the GSCI food component jumped 19% each, while the S&P 500 added just 7%, according to Hunt.

The unintended consequence of higher prices, and reduced workers' real incomes as a result, actually has been to slow economic activity, he argues. The wealth effect, meanwhile, has been confined to upper-income households, whose spending is hardly affected by asset prices. According to one estimate Hunt cites, a $1 increase in wealth generates less than 0.5 cents in incremental spending.

The Fed's policies also haven't been effective in fighting what Richard Koo, Nomura Research Institute's chief economist, contends is a "balance-sheet recession" in which consumers and businesses are unwilling to borrow even at zero interest rates. But once credit demand revives, the Fed will be forced to withdraw the liquidity in provided, which would result in sharply higher long-term interest rates when the central bank begins to sell some of the bonds it has bought during QE.

And, Koo continues, if the Fed hesitates to exit from QE, the bond market would send yields sharply higher out of fear of inflation. "Either way a major ordeal awaits both the central bank and the bond market," he writes. Over the whole sweep of QE, from expansion to withdrawal, Koo says the ultimate costs exceed whatever initial benefits that may be realized.

And in its most extreme form, Societe Generale strategist Dylan Grice writes that when central banks debase their currencies, they risk debasing society itself. Money provides the trust that allows two strangers to make transactions with each other. When trust in that medium of exchange breaks down, so does society, he asserts.

He cites examples of history, from the coin-clipping of ancient Rome; a surge of inflation in medieval England; the French Revolution, and the Weimar inflation of Germany in the 1920s. In each case, Grice says "society turned on itself" -- with the persecution of Christians by the Romans, burning of witches in the Middle Ages, the reign of terror under Robespierre, and the rise of the Nazis and the genocide of the Jews.

Indeed, far-right parties have moved from the fringes to positions of power in Europe as the result of economic crisis there, notably in Greece, as the Wall Street Journal reports Tuesday.

Even less severe inflations, such as that of the 1970s, sap confidence as a few profit while the many suffer. "Money implies a trust in the future," he writes, which was rejected then in the nihilism of punk rockers such as the Sex Pistols.

Bringing this up to today, he observes the credit inflation that came from central banks provided cheap money to the banks, which artificially inflated asset prices and enriched anybody connected with those assets.

"And now the social debasement is clear for all to see," Grice writes. "The 99% blame the 1%, the 1% blame the 47%, the private sector blames the public sector, the public sector returns the sentiment…the young blame the old, everyone blames the rich…yet few question the ideas behind government or central banks."

"I'd feel a whole lot better if central banks stopped playing games with money. But I can't see that happening any time soon," he concludes. That's because central bankers don't see the corrosive consequences of their policies that don't feed into conventional statistics.

Comments? E-mail: randall.forsyth@barrons.com