That sound you hear is the hum and clatter of printing presses fully engaged, running at top speed and spitting out fresh new greenbacks:
The Federal Reserve, in a dramatic effort to rev up a “disappointingly slow” economic recovery, said it will buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth.
Many outside the Fed, and some inside, see the move as a ‘Hail Mary’ pass by Fed Chairman Ben Bernanke. He embraced highly unconventional policies during the financial crisis to ward off a financial-system collapse. But a year and a half later, he confronts an economy hobbled by high unemployment, a gridlocked political system and the threat of a Japan-like period of deflation, or a debilitating fall in consumer prices.
The mysterious economic manouevre (or as I prefer to call it, “financial arabesque”) known as “Quantitative Easing” is explained in further depth here, and more amusingly by Matt Taibbi, below:
The Adventure of the $18 Loaf of Bread, coming soon to a grocery store near you.