U.S. banks earned $40.3 billion in the first quarter of 2013. That is more than at any other time in history.

For greedy banksters that’s a problem. What to do with all the money? According to JPMorgan Chase CEO Jamie Dimon, there aren’t many good options to put the money to work.

Dimon threatens that banks may just sit on their cash and do nothing.

We know what banks aren’t doing. They aren’t putting any money away for a rainy day. Based on FDIC data, ‘rainy day reserves’ are at a 6-year low.

BlackRock’s CEO – Larry Fink – isn’t worried about future risks either. Fink said on CNBC that the bull market may well continue another five to six years and drive the Dow as high as 28,000.

If there’s anyone you can trust, it’s Fink. With some $4 trillion under management, his firm is the largest asset manager in the world and he surely has no incentive to talk stocks up, right?

Of course banks' ‘big problems’ are caused by their biggest ally and protector – the Federal Reserve. Without QE banks wouldn’t be flush with cash, they’d probably still try to recover from their crash.

Paul Volcker, Federal Reserve Chairman from 1979 – 1987, offered at few disguised words of wisdom for Bernanke at the Economic Club of New York.

• The Federal Reserves basic responsibility is for a “stable currency.” Asked about the dual mandate, Volcker said: “I find that mandate both operationally confusing and ultimately illusory.”
   
• Is the Federal Reserve squandering its credibility: According to Volcker, “Credibility is an enormous asset. Once earned, it must not be frittered away by yielding to the notion that a little inflation right now is a good a thing, a good thing to release animal spirits and to pep up investment.”
   
• What about inflation and the Federal Reserve’s ability to control inflation: “The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.”
   
• Will there be a tipping point for Fed policy to stop working: “The Federal Reserve, any central bank, should not be asked to do too much to undertake responsibilities that it cannot responsibly meet with its appropriately limited powers.”
   
• More Wisdom about the Fed’s limits: "Asked to do too much, for instance to accommodate misguided fiscal policies, to deal with structural imbalances, to square continuously the hypothetical circles of stability, growth and full employment, then it will inevitably fall short,” Volcker said. Those efforts cause it to lose “sight of its basic responsibility for price stability, a matter that is within the range of its influence.”

To sum up: Bank executives fear of risk is drowned by too much cash and greed. They will find ways to make more money, riskier ways, which will cause more pain and less gain in the end. According to ex Fed Chairman Volcker, the Fed may soon be unable to enable.