Here’s the best explanation I’ve seen on Quantitative Easing from Steven Landsburg. I recommend reading the whole post, but if you are curious about what exactly QE is, here it is in a nutshell:
They’re creating 600 billion new dollars and using those dollars to pay down the government’s debt.
The rest of Landsburg’s post does a great job of explaining potential results of this action.
If I understand it correctly, the net effect will likely be the transfer of wealth from those who are holding to dollars to the folks who sold their bonds back to the government.
Thanks to Steven Landsburg for taking the time to explain this.