"They announced this with a seemingly innocuous statement: that they'd keep their current level of debt at about $2 trillion. In Fed-speak this means they're clearly worried about the sinking economy, and that they'll print as much fiat money as they think is necessary to increase the money supply to induce inflation.
"In economic terms, buying Treasury debt is called "monetizing" debt. In plain English it means that the government prints money to pay for its debts. This policy has been the downfall of many governments who destroy their currency through hyperinflation.
"As soon as unemployment starts to go up again, and I believe it will, the politicians will be all over the Fed to "do something." That "something" will be massive QE. I'm quite sure that the Fed hasn't figured out how much QE they'll need, and that they're unsure of its impact on the economy.
"I have a pretty good idea of where it will all end up. Since they're not dealing with the underlying problems, this papering over of the problems will lead to inflation and economic stagnation, a phenomenon we saw in the 1970s called "stagflation.""
http://www.minyanville.com/businessmarkets/articles/stagflation-inflation-deflation-hyperinflation-money-printing/8/23/2010/id/29730?page=full
A little dated but interesting.
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