Ben Bernanke and the FED

Today the FED has the responsibility to decide if interest rates should be lowered or not. The good news is that whether they drop interest rates or not, we live in an incredible country; a country where the people work hard, play hard and are quite resilient.

In my mind, the FED should have dropped interest rates last fall, anticipating that the economy was slowing because of an inverse interest rate curve. The mortgage problems resulted from that reality.

The FED has an extremely difficult job. Their responsibility includes trying to out-guess our fears, hopes and dreams, as we struggle with our own capabilities and challenges.

Well, I'm an optimist. I believe that the FED should cut interest rates 50 basis points today to ensure an economic recovery. That should allow people to better manage their mortgages and stabilize the crisis at hand. My hope then would be that economic growth would move back up to a 3% real GDP rate. The challenge then will be to stabilize energy costs at lower levels. If the US dollar will stabilize and maybe improve some, with longer term interest rates moving up from better economic growth, which should help stabilize energy pricing, then maybe world economic prosperity can continue to improve.

This scenario looks like a good recipe for wealth generation to me. The challenge later on will be to see if the people of the world can sustain peace and prosperity in the face of the pride and prejudice that results from wealth generation.