The US Fed Announcement March 18, 2009

On March 18, 2009, the US Fed announces its further program of devaluation of the US dollar. It plans to "purchase" a Trillion dollars of debt ($1,000,000,000,000).

Since last Fall, the Fed's lending programs have roughly doubled the size of its balance sheet, to about $1.8 trillion. The actions announced on Wednesday are likely to expand that to well over $3 trillion over the next year.

This announcement by the Fed is pretty scary. In it self, it does not look very good (link to the announcement). However, what are they seeing that makes them take this very unusal heavy action? And that is the scary part.

In reaction, the markets jumped up but then fell back, realizing that something is not right. Gold, naturally moved up on this announcement.