By Rudi Filapek-Vandyck

The Dow Jones industrial average jumped 207 points, or 1.6%, to 13,539.86, while the Nasdaq rose 1.3% and the S&P 500 gained 1.6% after the US Federal Reserve wrote yet another chapter of its unprecedented monetary experiment, commonly referred to as Quantitative Easing, or simply QE3.

At its core, Bernanke and Co maintain their strong conviction that monetary policy can change the dynamics of an otherwise sluggish economic recovery and they are targeting the US housing market specifically to create new jobs and drive down the unemployment rate. Will it work? The jury remains out, but financial markets love these kinds of experimental policies, as it ads to global liquidity. One only needs to look at what happened pre and post the QE1 and QE2 announcements. US equities are back within reach of their all-time highs. Commodities are anticipated to receive a boost. The underperformers in equities, miners and energy companies, are expected to catch up with the defensive outperformers. UBS strategists said so this morning (not that anyone doubted their wisdom in the first place).

The key sentence in today's FOMC statement is the following:

"If the outlook for the labor market does not improve substantially, the FOMC will continue its purchases of agency MBS, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability."

Now, this reminds me of a joke I stumbled upon recently and it goes as follows: If we all stopped looking for work, the unemployment rate would drop to zero. Helicopter Ben gets it, but he doesn't think this is funny. As a scholar of the 1930s Depression Era he once upon a time drew the conclusion that excessive monetary liquidity measures would have been the panacea for all ailments and troubles during that era and he certainly wasn't going to waste this unique real time opportunity to put his theoretical conclusions into real action. Apart from the explicit reference to an unquantified unemployment target, the second key factor in today's policy announcement comes with the term "open-ended".

It means the world's mightiest central banker is prepared to go as far as it takes to force Americans on food stamps (record high numbers) into a job (historically low numbers). This, we all have to realise, could potentially make QE3 the largest program of the three announced thus far. The gold bugs were right all along. Free, unbacked money is coming our way in spades, soon.

To recap, this is what today's announcement revealed in terms of monetary stimulus:

- Ultra-low interest rates (0-0.25%) will be kept ultra-low until at least mid-2015 (from late-2014 prior)
- Operation Twist whereby the Fed buys longer dated US Treasuries and sells the shorter end of the market will continue until (at least) the end of this year
- The Fed will (starting tomorrow) purchase US$40bn in mortgage-backed securities each month - note the label "open-ended" that was attached to this part of the announcement

At first glance, the numbers mentioned all seem a bit less than market speculation beforehand, but what pushed the balance into positive was the mention of two words: "open-ended". Layman's translation: whatever it takes, for how long it takes.

Let's take a step back and take one more look at what