Clif Droke | Oct 29, 2013 01:16AM ET
Statistics can sometimes, as we all know, be very misleading. Take the unemployment report for example. If you examine the numbers out of context, you’d be forced to conclude that workforce participation has steadily increased over the last four years. A behind-the-scenes look at those numbers, however, reveals a startling discovery: most of those gains have occurred because job seekers have simply given up looking for a job.
Federal Reserve Chairman Bernanke is acutely aware of this, which is why he is intent on continuing to provide monetary stimulus through the central bank’s quantitative easing (QE) policy. A growing body of evidence suggests that while QE has been extremely beneficial for the stock market, it has been decidedly less helpful in stimulating the U.S. economy.
With the Fed providing a virtually limitless expansion of the monetary base since 2008, one must ask why this hasn’t had more of an impact on increasing wage growth or reducing unemployment? Before we can answer this question we must first have a look at just how strong has been the Fed’s commitment to fighting the anti-growth forces that were ignited during the credit crisis. The logarithmic rise in the U.S. monetary base can be seen in the following graph.
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