Quantitative Easing

That's the technical term for the Fed's new plan to print money and throw it into the Treasury market.  Frankly, I don't think too much of it.  As Richard Koo point out, Japan did this for years, and it had exactly and precisely zero effect on the economy.  Why doesn't printing money work, you might ask?  It seems foolproof.  Unless of course nobody wants your stinkin money:

"Even if the Fed could make interest rates negative, that wouldn't necessarily help," Mr. Hatzius said. "We're in a deep recession mainly because the private sector, for a variety of reasons, has decided to save a lot more. You can have a zero interest rate, but if you just offer more money on top of the money that is already available, it doesn't do that much."

After reading Koo's book, I am basically on board with this last train of thought.  He called the Japanese experiment with quantitative easing the great non-event of the century, and he had some pretty convincing graphs to back that statement up.  Intuitively though, you can see how it is unlikely to work -- short term rates have gone from 5% to 0% without stimulating anything, so what makes you think pushing the 10 year and mortagage rates down another 50 basis points is going to shock, awe, or even mildly entertain?