So much for the Fed's two mythical mandates of promoting "maximum employment" and maintaining "price stability." First, we had Bernanke's predecessor Greenspan confirming in late July on Meet the Press what everyone knows: namely that the primary goal of the Fed is merely to encourage higher stock prices: "if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here." And now, courtesy of an Op-Ed by the current chairman, we get confirmation, again, just three months later, from the current chairman, that the Fed cares mostly about stimulating high stock prices, solely to create the completely artificial illusion of "wealth" for the few, the proud, the shareholders, and the banking oligarchy.
It's more fundamental than that. After decades of "plunge protection" the Federal Reserve holds large blocks of stock on their balance sheet. If the stock market is allowed to drop, the Fed would immediately be insolvent past the point that any printing press could ever overcome. So Bernanke has to keep the stock market puffed up to keep the balance sheets looking like they are in the black.