Gerald

What do Schwab and Bernanke Have in Common?

One aspect rarely spoken about Mr. Bernanke is that he has a long career ahead of him as our FED Chairman. It would pay him great dividends to think long term since he will have his job for many many years. A quick fix that leads to longer term pain is not to his advantage. Looking back to the Volcker era, trying to remove the inflation beast once it is entrenched in the US economy is a very punishing long term mission. Lowering interest rates will likely lead to a weaker dollar and thus lead to the possibility of hefty inflation. Not lowering interest rates may lead to a type of meltdown in certain sectors of the finance industry but this is by no means the apocalypse of the US economy. There will be short sharp pain that may last at most for two or three years. Short pain for long term gain is the better choice.