Quantitative easing

The fed's discount rate has lost part of its significance in light of the rising number of programs targeted at reestablishing lending. As the first oversight committee comments show reestablishing lending unfortunately does not work.

Bailout Monitor Sees Lack of a Coherent Plan

http://www.nytimes.com/2008/12/02/business/02tarp.html?_r=3&ref=business

I guess using the same strategy that created the mess in the first place (expansion of credit) is not a good remedy.


Nevermind, we increase our efforts through quantitative easing, simply meaning printing more money.
Bernanke Says Fed May Buy Treasuries to Aid Economy
http://www.bloomberg.com/apps/news?pid=20601068&sid=ajcLVDMwN5To&refer=economy
The way it works the Treasury issues Treasuries, the Fed prints money and buys the treasuries. The Fed created the bubbles which are now deflating and causing trouble so Ben says let's inflate them again. Inflating the money supply by trillions of USD will inevitably create inflation.

Of course the fed charges interest for their printed money. This money is paid to the shareholders of the fed. It is important to note that the fed is privately held by the very individuals who benefit most from the bank bailouts as can be seen at the links below.

Ownership of the Federal Reserve
http://land.netonecom.net/tlp/ref/federal_reserve.shtml
http://www.fdrs.org/federal_reserve.html