300. Will Bernanke's Twist Help the Economy?

Some of my previous blogs explained my position -- NO. Today I read this article summarizing statements by the President of the Dallas Federal Reserve Bank, Richard Fisher. He strengthens my position by stating: "And lower rates could force pension funds to set aside extra money to meet their future obligations to retirees -- diverting money that might otherwise have gone into investments that could generate jobs...Investing more heavily in longer-term Treasurys also poses risks for the Fed. When the economy strengthens, longer-term interest rates will rise, reducing the value of the bonds in the central bank's portfolio. As a result, the Fed might be tempted to keep rates low just when it should be raising them to control inflation."

The purpose of a stimulus is to provide enough confidence of the future in that the consumer, businesses, and large investment funds SPEND money to boost the economy and then lower unemployment. The risk is inflation and the control of it requires increasing interest rates to combat it -- this usually entails restricting the money supply.

I do believe Richard Fisher is contending for Bernanke's job in 2012. Both Perry and Romney already said Bernanke will be kicking a can down a different road if either is elected as president.