Just last week we saw short term treasury bonds - loans to the US Government - with zero or slightly negative return. That means that investors are paying the government to borrow their money.

Now the Federal Reserve has announced that its new target rate for interbank lending is effectively 0%.

All of this has yet to have an impact on the real economy and we are told to expect further quantitative easing of the money supply.

Meaning that the Federal Reserve is about to deliver large quantities of free money to the economy. Remember the story from your macroeconomics principles class where the helicopters flew over town and tossed out bank notes? That is a form of quantitative easing.

Don't get too excited though. The money will be delivered by armored car and electronic transfer to those who know what to do with it - that would be bankers. They will lend it to the improvident and unwashed masses - that would be us - at appropriate interest rates and for appropriate service fees. The Fed will then take the loans off of the bankers hands at face value so that they can lend us some more.

That is, if any of us are foolish enough to borrow in these times.

By the way, if you guys want to try the helicopters, the west end of the island of Alameda would be a fine place to start. Wonks Anonymous thinks that 7:00 AM on a Saturday is a great time.