This past week's data point of significance for investors has to be the revised, final, fourth quarter U.S. GDP report, which indicated the world's largest economy grew 3.1% in the quarter, as well as 2.9% for 2010.

In 2009, the U.S. economy contracted 2.6% during the Great Recession -- the worst downturn since the Great Depression -- and even though the final 3.1% fourth quarter stat was better than the 2.8% previously estimated fourth quarter growth rate, the growth pace still is not strong enough.

Is Federal Reserve Chairman Ben Bernanke stoking inflation? Of course he is. Anyone with common sense knows that if you give $600 billion cash to the banks with no qualifications -- as he did with the second round of quantitative easing -- they will use it to speculate in the markets. JPMorgan Chase (JPM) just bought $1 billion of copper.

Bernanke's fatal mistake was that he placed no restrictions on what the banks would do with his $600 billion. If you opened the banks' books, you can bet that they've invested in commodities, currencies and foreign equities and bonds.

Bond money managers are usually glum. Then again, they need to be cautious since they are locking up money at fixed rate of returns. In a volatile world, this can certainly be a risky proposition.

So it should be no surprise that the biggest bond money manager, Bill Gross, is not enthusiastic about 2011. He leads the Pacific Investment Management Co., which has $1.2 trillion under management.

In projecting U.S. GDP growth at about a 2% rate for the remainder of this year and in 2011, I have noted that the two propellants of growth so far in this economic recovery -- the inventory revival and fiscal stimuli -- are largely exhausted.

But are there other sectors of the economy that might serve as the backbone of any meaningful economic recovery? I don't see any, especially with U.S. consumers continuing their saving spree, repaying debts and remaining hesitant to spend like they did during the boom times of earlier years.

Federal Reserve Chairman Ben Bernanke will appear on 60 Minutes this Sunday to defend his controversial stimulus package, dubbed QE2, of buying $600 billion of Treasury securities.

In the CBS interview, Bernanke explains his intentions with QE2 and defends the notion that this stimulus will not lead to inflation. He also told CBS that he is not ruling out the purchase of more securities.

Reuters quoted Federal Reserve Chairman Ben Bernanke as saying: "We're not in the business of trying to create inflation. Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation, which I think we'll all agree could also be worrisome."

Bernanke claims that inflation is below the Fed's 2% target. That's hogwash! Sure if you use the "core" CPI, which leaves out food and energy, that may be the case. Not to worry.

Almost everybody believes the Federal Reserve is about to implement another round of stimulus. And the reasons cited in favor of such a move are many. One argument put forth is a fear of deflation, as reported in the article by CNNMoney/Fortune. Well, with GDP at 2% for the last quarter, the economy is slow, but it is not sinking into deflation.

Then what is the Fed up to? Why do another round of stimulus? Let's try this argument. The plans are to print perhaps another trillion dollars by buying Treasuries. When the Fed buys Treasuries, the money goes directly to the bankers. The $64,000 question is why give all this money to the bankers?

Here's a shocker!. Chicago Fed President Charles Evans claims that the U.S. is an a bona fide liquidity trap! His remarks were given in a speech to the Boston Fed and reported in the Wall Street Journal. In attendance were Fed employees, academics and Wall Streeters.

Evans is proposing a radical departure from established Fed policy, which is to maintain price stability and maximum sustainable employment. Here it is! He wants to foster above-target inflation for a time!

The U.S. Federal Reserve is in a quandary about how to explain its anticipated quantitative easing stimulus, dubbed QE2. Officials worry that an added stimulus will create unwanted inflation.

Fed officials Charles Evans and William Dudley have spoken in favor of the new stimulus. Dudley told the Financial Times that asset purchases and communication are "two potentially complimentary avenues."

For the 2010 fiscal year ending September 30, the Congressional Budget Office reported that the deficit is just below $1.3 trillion, The Wall Street Journal reported. In 2009, the deficit was $1.4 trillion. The deficit in fiscal 2010 is 8.9% of GDP, well above the normal number of 3%.

With staggering deficits in 2009 and 2010, lawmakers will face a difficult task: how to rein in spending without derailing our fragile economy. Both parties must work together to find ways to keep spending in check.

There is growing debate over whether another round of quantitative easing (QE2) will ease unemployment.

In an interview with the Financial Times, Philadelphia Fed President Charles Plosser set out guidelines for more stimulus. He said: "I think that before we engage in further quantitative easing, we need to be very clear about what it is we are trying to do, how we're going to go about doing it, how we're going to measure whether we're effective at it or not, and how we're going to communicate that."

The world of international finance is a complex web. The U.S. is still the powerhouse when it comes to gross domestic product. Yet, while perched on top of the heap, the U.S. faces major problems with high-level debt and unemployment.

The U.S. Federal Reserve is faced with having to issue massive amounts of debt just to keep pace with the growing deficits. Now the Fed is planning another round of stimulus by buying more treasuries, dubbed QE2.

Developed countries are scrambling to put in place more rounds of stimulus to prop up their faltering economies.

The U.S. Federal Reserve has already pledged or spent an unbelievable $12.2 trillion to bail out a handful of bankers. The Fed slashed interest rates to zero and it is now purchasing more treasuries with proceeds from existing purchases. Finally, at its recent meeting the Fed stated that it stands ready to inject more stimulus in the economy.

Gold prices jumped to a new record high as spot gold in London was fixed at $1,291.05. Traders interpreted the Federal Reserve's statement that it were ready to provide more stimulus as bullish for commodities, Reuters reported.

More stimulus means printing more money. The U.S. dollar did not respond well at all. The December futures contract fell 0.65 to 80.20 (8:00 am EDT), which in turn had investors running for safe-haven assets such as gold and other commodities.

The Federal Reserve has posted some data that shows the extent of economic decline in the second quarter. Here are some key numbers, as reported by Reuters.

• Household wealth fell by $1.5 trillion in the second quarter to $53.5 trillion. This sharply lower than the $64.2 trillion at the end of 2007.
• Stock losses amounted to $14.9 trillion, a drop of $1.95 trillion.