All the hard money alarmists who have spent five years predicting that quantitative easing would trigger runaway inflation -- or any inflation -- have been proved to be dead wrong and deluded victims of "bad economics," former Federal Reserve chairman Ben Bernanke told attendees at the annual Schwab Impact conference in Denver yesterday.

There was "no risk of inflation," it was "never a risk, and it is "not a risk now," Bernanke said. Given the depth of the financial crisis, criticism was understandable. There was "a lot of anger, and people were upset about the economy with good reason," he said.

In a very calm, quiet, mild-mannered tone, the former Fed chairman noted that had the U.S. listened to the numerous critics of QE, it might find itself facing the same problems, like deflation and zero growth, that the Eurozone is confronted with today. Bernanke contrasted the relatively strong performance of the U.S. and the U.K., both of which embraced QE, with that of Europe, which is politically and economically constrained from implementing this kind of policy since there are no Eurobonds.

Inflation in the U.S. is moving toward the Fed's long-term goal of 2 percent, while the economy is adding more than 200,000 jobs a month, Bernanke said. "The Fed can deal with inflation if it happens," he added.

In theory, deflation could happen in the U.S., and while it could be as dangerous as it has proved to be in Japan, it doesn't have to be. If it were caused by "a big increase in productivity, it could be healthy," he said.

Bernanke did not really drill down into the cause-and-effect issues surrounding the different stages of QE. For instance, since QE 3 was initiated in mid-2012, unemployment has fallen from 8.1 percent to 5.9 percent, but many have questioned whether monetary policy was a key force behind the recovery or whether it would have happened anyway. Moreover, while QE has not resulted in runaway inflation, it hasn't produced a strong rebound either, and many critics have argued that its primary effect has been surging equity prices that have only widened the wealth gap.

One overlooked aspect of the financial crisis is that it prompted the Fed to return to its original mission -- stabilizing the financial system. Congress created the Fed in 1913 after it was embarrassed that J.P. Morgan and other bankers had to bail out the financial system after the Panic of 1907, Bernanke said.

During the Great Depression, the Fed failed to stabilize the banking system as one-third of all American banks collapsed. A leading student of that period, Bernanke said that Fed impotence exacerbated the Depression of the 1930s.

In recent decades, the Fed has started to view its mission as management of the economy and maintaining desirable levels of inflation and economic growth, while maintaining stability of the banking system has taken a back seat. Bernanke indicated he believes that one positive thing that came out of the crisis is that it reminded the Fed of the importance of its original mission.