FED direct assets purchase

The sooner journalist and commentators stop talking of fiscal stimulus in the US, the better.
As long as the words conserves their meaning the word fiscal has always meant financed through taxes. At ZIRP fiscal and monetary policy blurs.
And yet, from Bloomberg:

"The new strategy is likely to involve unusually close cooperation with the Treasury of President-elect Barack Obama, which is still formulating its economic-rescue plans. The aim is to kick-start borrowing and spending to propel the economy toward a recovery by the middle of next year.
“It’s going to take a combination of fiscal and monetary stimulus to get the job done,” said former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co. in Washington. The central bank has signaled it will “make sure that the fiscal stimulus package, which is going to be a big one, is fully supported” and “in effect financed by the Fed.”

Back IbnBattuta.
Will them succeed? Hard to say. The only thing that even the economic layman can foresee is inflation, an hidden and regressive tax that hit harder on wage earners and small savers, and it's the equivalent of a light default for bond holders.

Because either the currency of bondholders country float free(they avoid inflation) and they take the hit with the decrease in the face value of their bonds or they keep the currency pegged and instead import inflation from the the US, without the chance to finance their deficit through the emission of treasuries with a US$ interest rate negative in real terms(as in the post-Volker super cycle).

Many are starting to worry, here nakedcapitalism:

"Consider further: the Fed assumes it has no constraints, because it can bloat its balance sheet to any size. But it has limits of staff, focus, expertise that restrict what it can do. For it to succeed in its aims, it is going to have to intervene on behalf of every type of troubled credit and make allocation decisions among them. Going on auto pilot (that is, dealing with the "presenting problems", the ones that surfaced first, means that they get priority when that might not be the best use of collective resources (it is not desirable from a competitive standpoint to bloat our housing sector back to status quo ante)".

Hard to feel relieved