"The Fed took another unconventional step to boost the economy, saying it would increase its share of longer-term Treasurys by $400 billion and reinvest in mortgage-related debt."- WSJ
Here is Peter Schiff's take on the Fed Chairman's move.
Peter Schiff : The FED does not care on how much damage it does on the long run. The FED is acting very politically and it is trying whatever it can to try to boost the economy ahead of the 2012 elections, so its latest brain storm is that it concluded that the problem with the US economy is that interest rates. Long term interest rates are just not low enough despite the fact that they have never been this low in our life time. The yield on the ten year is 1.875% - that's it. The 30 year is down to 3.039%. We never had interest rates so low. The economy is a mess. Interest rates are as low as they have ever been and the FED's conclusion is "If we could just get them a little lower that's going to do the trick and the economy is going to turn around".
"By "stimulus," we mean doing more harm to savers. The supposed purpose is to lower mortgage rates and help the housing market. But this is counter-productive. All the government's intervention in the housing market just delays the declines (and bank failures) necessary for economic recovery." - David E. Shellenberger
Meanwhile, banks like Bank of America are insolvent.
This will not end well.
(I can see Weimar Germany from my house.)
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered." - Thomas Jefferson
Related: Zerohedge - Operation Twist is here.