Last week Chairman of the Federal Reserve, Jerome Powell held his periodic News Conference following the latest meeting of the Federal Reserve's Open Market Committee.

The FOMC is the working body of the Fed that set's short-term interest rates and establishes the overall monetary position of the Fed.

And once again, Chairman Powell made abundantly clear that the Fed would leave the monetary spigots wide open. That this Fed would support the continued expansion of liquidity in the financial system. And that they'd do it through continued direct purchase of financial assets, Quantitative Easing, and through continued historic low-interest rates.

This, of course, came as no surprise to Wall Street, which expected nothing less. After all, this has been the position of the Fed since the outbreak of the Covid Pandemic a year ago.

So in other words, the Fed will continue to support the leveraging of the most highly leveraged economy in our history. Borrowings, by any measure, are the highest they've ever been. The Fed's own balance sheet, as announced last Monday, has ballooned out to a staggering 7 ½ trillion dollars. Government Debt, as last reported 26.9 trillion, corporate debt 7 ¼ trillion, household debt 4 trillion. Add all those together and it’s in excess of 45 Trillion.

All that not counting our financial debt.

These are numbers that would stagger a former Chairman of the Fed: William McChesney Martin. Martin was a sober, up-right chairman who was also a man of his era. Like all of his generation he had lived through the 1929 Stock Market Crash, and the Depression which followed. He was 23 years old when the Crash occurred. A prime time to feel the full impact of such an event.

And like his generation, he hated leverage. He considered it one of the primary causes of the Crash. The other was wild speculation that over-borrowing encouraged.

Although he was the Fed's longest service Chair. Having held that position for nearly 20 years. Today he is primarily remembered as the Fed Chair who famously expressed the concept that the role of the Fed is to “Take away the Punchbowl when the party really gets going.”

His actual quote is a little more cumbersome: The Federal Reserve…is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.”

You get the point.

The fed's job is to discourage leverage and speculation. NOT encourage it.

Just the opposite of today's Fed position as expressed by current Chairman Powell.

Interestingly McChesney Martin presided over perhaps the most sustained bull market in our history. Begun in 1946-48, the Bull marched throughout the 1950s and '60s, and really didn't fully break until the 1970s.

Granted there were a couple of hiccups along the way. The Eisenhower heart attack, the Go-Go Funds break. But essentially it was a generational bull market for America.

The current Bull Run, although spectacular in its amplitude, still has a long way to go to match the more conservative approach of the McChesney Martin's generation.

Perhaps it's time for Chairman Powell to think about making that punch at least a little less intoxicating.