Few expected an open-ended Fed pledge to buy $40 billion worth of mortgage bonds monthly and continue Operation Twist. Officially it's called the Maturity Extension Program.
It exchanges short-term debt for longer maturities. In theory, it's to lower interest rates on 10-year Treasuries. It also represents QE without printing more money and thereby dampens inflationary pressures.
For how long in an environment of money madness. Official numbers mask its high level. Based on 1980s model, Shadowstats estimates around 9%.
Everyone who eats, drives a car, heats and/or air conditions a home, has health insurance and other medical expenses, and/or pays tuition bills knows inflation is high and rising. Household budgets are sorely stressed.
Lloyds TSB Bank analyst said Bernanke was true to his "Helicopter Ben" reputation. Pimco's Mohamed headlined his Financial Times op-ed "QE 3 is a sign of the Fed's policy purgatory," saying:
"(T)he Federal Reserve confirmed on Thursday that it is operating in policy purgatory: incapable of delivering the good economic outcomes it desires, yet unable to exit from an experimental policy stance that risks a widening array of collateral damage and unintended consequences."
Previous actions failed. Economic conditions may be worse than most think. On August 31, Bernanke cited "daunting economic challenges."
He expressed "grave concern" about high unemployment. He knows headline U 3 deception masks its severity. Youth unemployment is dangerously high. Workers leaving the labor force in huge numbers shows how bad things are.
Monetary policy is the only game in town. Political Washington force feeds austerity with much more coming. Conditions aren't uncertain. They're awful and heading south.