Toshio Masuda, Writer, Commentator, and International Economist
Official Website : http://www.chokugen.com/
E-mail : info@sunraworld.com
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Forget about being afraid that the Federal Open Market Committee (FMOC) will raise interest rates at the end of June. If Fed Chairman Ben C. Bernanke raises the Federal Reserve Board’s (FRB) bench mark short-term interest rate another 0.25%, he should be kicked out of FRB. One has to realize what is the first priority of financial policy in the context of what is the purpose of that policy and the means to implement that policy. Financial policy is the means for economic growth. As a human being grows to live, the economy grows to sustain.
So, both the priority and the purpose of financial policy is to continue the growth of the economy. Thus, the policy debate that narrowly contrasts inflation vs. a slowing economy as the basis for whether FOMC raises short-term interest rates again is nonsense.
The right decision of FOMC is very clear: it should not raise interest rates. Whether the FOMC will do the right thing remains a question, however.
The FMOC should not raise interest rates any further if current indications of the slower economy remain at the end of this month.
The key factor is the economy itself and not the consumer price index which is the result of the economy - - not the cause of the economy.
Good luck, my investor friends!
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