The Fed goes a-shopping with its Monopoly Money

The Federal Reserve announced that it would buy $1 Trillion in Treasury bonds and mortgage securities.

Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed's measures in the last year.

Left unsaid: how much of that trillion would be spent on T-bonds and not mortgage securities, or whether or not any portion of those about-to-be-bought mortgage securities are "toxic."

And there's another thing: where's this money coming from? Did the Fed get a job and not tell anyone? Is it turning tricks on Wall Street? Nope. It's all Monopoly Magic. The Central Bank is just gonna create some new dollars.

...[T]here were also clear indications that the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation. Gold prices rose $26.60 an ounce, hitting $942, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again on Wednesday.

And in case you had lost count, as of yesterday the US government had already made commitments of about $9.9 trillion and spent $2.2 trillion in an effort to "save" the economy.