We Can't Stimulate Our Way Out Of This, But They'll Continue To Try

The New York Times: Fed Pledges to Maintain Stimulus

The Federal Reserve said Wednesday that it would continue its economic stimulus campaign, aimed at reducing unemployment, amid fresh evidence of a housing recovery that could help to bolster those efforts.

Because the answer to when something isn't working is always to do more of it, and harder.

The Fed announced after its last meeting, in September, that it would buy $40 billion in mortgage securities each month until the jobs outlook improved, a significant expansion of its stimulus campaign. It also said it intended to keep short-term interest rates near zero at least until mid-2015. ...........

Under a separate program begun last year, the Fed also is buying about $45 billion in long-term Treasury securities each month. Those purchases are scheduled to end in December. Officials have said they will consider extending the program depending on the condition of the economy.

So, the Fed is admittedly buying, at the very least, $85 Billion in securities each and every month. Anyone want to know hoe long that can last, and what if anything they're buying it with?

But fear not, it is still full speed ahead:

The central bank appears determined to press its campaign until it is certain of the results, so long as inflation remains under control. It has been chastened by a series of misjudgments, after declaring several times in recent years that the recovery was gaining strength only to conclude that more stimulus was needed.

Now, what could possibly go wrong with a continually expanding money supply?