Quantitative Physics

That musical whirring sound you hear this morning is Helicopter Ben's Magical Printing Press going through its pre-flight warm up checks.

Federal Reserve Chairman Ben Bernanke gave the clearest signal yet that the Fed is about to act to further spur the sluggish U.S. economy, stating that "there would appear...to be a case for further action."

The Fed chairman, in a speech in Boston Friday morning, said persistently high unemployment poses too great a threat to the economy, and that the central bank needs to weigh the risk of weak prices, rather than focus on its traditional concerns about inflation. He suggested the battle against inflation has largely been won by the Fed.

"For the first time in many decades, [the Fed] had to take seriously the possibility that inflation can be too low as well as too high," he said.

Benny here is about to go quantitative on somebody's ass.  At this point it's just a question of how large the money nuke is going to be.  I'm glad that bernanke has finally noticed that unemployment just might be a problem, but I'm wondering what buying up a trillion and change in treasuries is going to do when American companies continue to sit on the small inland sea of cash created by the last batch of QE cooking and not spend it on expansion.

There's little to no point if businesses aren't going to hire workers because the workers have no money to buy stuff because they have no job.  This would involve crazy things like "government make work programs as the employer of last resort" and other things that would cause Tea Party embolisms in the streets.

We'll see what happens.  If it's anything like the last time, all it will do is just stall the inevitable until we fix the root cause of the problem:  the financial system.