The Fed's Newest Laxative

Well, isn't that what "quantitative easing" sounds like to you?  After all, anybody who lived through the 1970s knows it's a bunch of crap:

The plan to pump $600 billion into the financial system is designed to stimulate the economy in large part by lowering mortgage and other interest rates.

....with mortgage and other interest rates already at historic lows.  Kinda suggests that this isn't the correct remedy for what ails the economy, doesn't it?

Although the approach carries significant risks for both the economy and the central bank’s credibility, the steps announced by Fed policymakers could represent the nation’s best hope for breaking free of sluggish growth, especially with bold initiatives unlikely from a newly divided Congress.

IOW, now that we've taken the House away from them, it's up to Helicopter Ben to finish the "transformational" nightmare that the Obama/Pelosi/Reid Axis started.

Fed officials concluded that growth is too slow to bring down the 9.6% unemployment rate and is at risk of staying that way for some time absent new action. They were also concerned that inflation has been running too low and were looking for a way to encourage modest price increases, which would give consumers and businesses more reason to spend money before its value declined and help energize the economy. …

IOW, the "Fire Sale" strategy.  "Spend it before it's reduced to ashes."  Spend in a panic, instead of rationally, constructively, and at PRIVATE initiative.  The term "Weimar" comes to mind.

The Fed usually manages the economy by adjusting short-term interest rates. With those rates already near zero, Fed officials had to dust off a strategy for boosting the economy that debuted during the darkest days of the financial crisis. The Fed plans to create money, essentially out of thin air, and then pump it into the economy by buying Treasury bonds on the open market. These purchases are to be finished by the end of June, the Fed said.

Using this technique, called “quantitative easing,” the Fed bought more than $1.7 trillion in securities during the financial crisis and in its immediate aftermath. The central bank’s holdings jumped to their current level of $2.3 trillion, and the figure will approach $3 trillion when the new purchases are complete. This new wave of bond buying is a dramatic turnabout for an institution that just six months ago, amid a false spring in the economy, was weighing how it would begin unloading all the securities it had purchased.

A turnabout from the policy direction that would encourage the growth their lunatic gimmickery is discouraging.  It's almost as if they've decided to punish us for our disobedience and rebellion for refusing to follow Red Barry's command to grow the economy and let him rape and pillage it all by napalming the value of our money.

Ensign Ed suggests the next "unexpected" consequence of "quantitative Ex-Lax":

[L]et’s say that it does encourage companies and venture capitalists to unlock the vault, so to speak.  Until we start fixing the structural problems in the domestic market by finalizing tax rates and dealing with the sweeping amount of uncertainty imposed by ObamaCare and the EPA’s self-assigned CO2 mission, will those investors be more likely to spend that money here — or abroad, in more predictable and hospitable environments?  Pushing investors to make decisions now on ventures may well backfire and send a great deal of that money elsewhere, leaving relatively little for American growth once Congress rolls back its previous interventions.

You could almost call it the Democrats' "Tea Party Insurance".