The Federal Reserve’s decision last week to initiate another round of quantitative easing has had its defenders and its critics. The Economist says that the Fed’s purchase of $600 billion worth of Treasury bonds is working to loosen up investment markets, while a Wall Street Journal editorial called the plan “more monetary cowbell,” intending simply to “flood the economy with more money.”

What exactly is happening with Ben Bernanke’s second round of quantitative easing, known colloquially as QE2? The Fed is essentially printing more money to buy up long-term bonds, the intended result of which is for yields on these long-term bonds to decrease and, as the aforementioned Economist piece points out, that this policy “chases investors into riskier, alternative investments.” The piece continues outlining what the policy has wrought: