The Federal Reserve announced an unconventional plan on Wednesday to reduce borrowing costs for businesses and consumers, trying once more to spur economic growth despite urgings from Republicans that it refrain from any expansion of its stimulus program.

The Fed said that it would invest $400 billion in long-term Treasury securities over the next nine months, using money raised by selling its holdings of short-term federal debt, in an attempt to drive down interest rates on mortgage loans, corporate bonds and other forms of credit.

Well, it's hardly an "unconventional plan"...as this is exactly what Jim Rickards said they were going to do...and he's been saying it for more than a month.

This Roy Stephens offering was posted yesterday afternoon over at The New York Times...and the link is here.

With today’s Fed announcement leaving interest rates unchanged and kicking into gear “Operation Twist,” Michael Pento of Pento Portfolio Strategies writes for the King World News blog, “The Fed has it all wrong by launching 'operation twist' and extending the duration of their balance sheet. And the Dow Jones Industrial Average, which fell over 280 points today, seems to agree. The 10-year note is trading at an all time low nominal yield and its real rate of interest is already extremely negative.”

Eric sent me this KWN blog shortly after Bernanke did his thing...and the link is here.

Bank of England officials said they may need to buy more bonds to bolster a faltering recovery after holding off adding stimulus this month in a decision that was “finely balanced.”

Most policy makers said it was “increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point,” the minutes of the Monetary Policy Committee’s Sept. 8 decision said. “For some members, a continuation of the conditions seen over the past month would probably be sufficient to justify an expansion of the asset purchase program at a subsequent meeting.”

This Bloomberg story is courtesy of reader Scott Pluschau...and the link is here.

Attempts by central banks on both sides of the Atlantic to reignite faltering economic recoveries left stock markets underwhelmed on Wednesday.

The US Federal Reserve announced "Operation Twist", which will see the central bank buy $400bn of government bonds with longer maturities and sell the same amount of shorter maturities. Hours earlier, the Bank of England delivered its clearest signal yet that it is poised to restart quantitative easing.

But with both the Fed and the Bank of England having already deployed much of their ammunition since the crisis started, investors focused on the deteriorating outlook that’s forcing the fresh stimulus.

This story was posted in The Telegraph very late last night...and is courtesy of Roy Stephens. The link is here.

Moody's Corp cut the debt ratings of Bank of America Corp, Wells Fargo & Co and Citigroup Inc on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders.

The government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled," the ratings agency said.

Moody's decision hit Bank of America hardest as it cut both the long-term and short-term debt of the holding company and long-term deposits at its lead bank. The ratings agency cut only the short-term debt of Citigroup and limited the Wells' cut to its senior debt and to deposits at its lead bank.

I note that the Fed's bank, JPMorgan Chase, did not receive the same downgrade. What a surprise. This Reuters story is courtesy of West Virginia reader Elliot Simon...and the link is here.

Lloyd's of London, concerned European governments may be unable to support lenders in a worsening debt crisis, has pulled deposits in some peripheral economies as the European Central Bank provided dollars to one euro-area institution.

“There are a lot of banks who, because of the uncertainty around Europe, the market has stopped using to place deposits with,” Luke Savage, finance director of the world’s oldest insurance market, said today in a phone interview. “If you’re worried the government itself might be at risk, then you’re certainly worried the banks could be taken down with them.”

With actions like this one, it could become a self-fulfilling prophecy. I thank Washington state reader S.A. for sending me this Bloomberg story. It's a longish article, but worth your time if you have it...and the link is here.

The European debt crisis has generated as much as €300 billion euros [$410 billion] in credit risk for European banks, the IMF said, calling for capital injections to reassure investors and support lending.

Political squabbling in Europe over ways to fight contagion and delays in implementing agreed measures are raising concern about the risk of government defaults, the IMF said. Banks, in turn face “funding challenges” because investors are concerned financial institutions will potentially show losses on government bonds holdings, and reliance by some on the European Central Bank for liquidity, it said.

This is Washington state reader S.A.'s second contribution to today's column...and the link to the Bloomberg story is here.

A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.

The European banks include French lenders Société Générale, Credit Agricole and BNP Paribas .

"Apart from spot trading, all swaps and forwards trading [with the European banks] have been stopped," one source who is familiar with the matter told Reuters.

I borrowed this Reuters piece from yesterday's King Report...and the link is here.

Here's a surprise! Yesterday I posted a story about this 9/11 lawsuit against Saudi Arabia...and here's a story today stating that it was "dropped without explanation". Maybe they discovered they were suing the wrong country...or more likely, they got a phone call or a visit. I suspect the latter.

I thank reader Jim Akers for sending along this story that was posted over at businessinsurance.com website yesterday...and the link is here.

Doug is back with his latest 'Conversations with Casey' interview with Louis James...the editor of the International Speculator. Here's a snippet from his first answer, just to give you a hint where this interview is headed...

"Let me be completely clear. The West in general, but the US in particular, has been living way above its means for a long time. The proof for that statement is all the debt we’re awash in – federal, state, municipal, and individual. Debt is worse than living out of capital. It amounts to living out of anticipated future revenues – which may not even be there. It amounts to eating the seed corn."

This interview is a must read of course...and the link is here.

Here's Mark Hulbert being as bullish on gold as I've ever seen him.

It seems that way to many, given its stunning rise in recent months. Their speculation has been fueled by no shortage of posts in the blogosphere that declare gold to be in a blow-off similar to the final stage of the Nasdaq Composite’s rise before the Internet bubble burst in March 2000.

But I’m not so sure.

Compare gold’s rise over the last decade to that of the Nasdaq Composite over the 10 years through March 10, 2000 — the day of its all-time closing high at 5,048.60. At least in comparison to that bubble, gold still has a long way to go.

This must read marketwatch.com story from yesterday is reader Scott Pluschau's second contribution to today's column...and the link is here.

Mining firms are hiring, but the city government, and even mine employees, are wary. Only a decade ago, tanking gold prices saddled the region with abandoned homes and tarnished dreams.

This far-flung capital of Nevada's Gold Belt is booming — very, very reluctantly.

With the price of gold in the stratosphere, the mine-chiseled corner of northeastern Nevada is scrambling to fill thousands of jobs, while newcomers to the barren region beg for somewhere to sleep. The motels: sold out. The apartments: good luck. The RV parks: get in line.

This very interesting story from yesterday's edition of the Los Angeles Times was one I 'borrowed' from a GATA release yesterday...and the link is here.

Gold will soon be accepted in payments against the delivery of securities on the Swiss stock exchange, in what will be a world first.

SIX Securities Services announced the plans after the successful settlement of transactions involving gold with a pilot set of customers.

“Gold is the new currency,” said the company.

This very short absolute must read story was posted over at the swissinfo.ch website on Monday...and is Washington state reader S.A.'s third and final offering of the day. The link is here.

With gold a stone’s throw away from $2,000 and already up 27% on the year, the objective investor might begin wondering how much higher both it and silver can climb. After all, gold is nearing its inflation-adjusted 1980 high – and that peak was a spike that lasted only one day.

So, how much return can we realistically expect in each metal at this point? And is one a better buy than the other? There are dozens of ways to calculate price projections, but I’m going to use data based strictly on past price behavior from the 1970s bull market.

It's somewhat embarrassing when a reader has to point out a gold story that I hadn't seen before that's posted on the website of the company that I work for...and that's what happened in this particular case.

I thank reader Rob Bentley for sending me this. As the headline states, it's written by BIG GOLD editor Jeff Clark here at Casey Research. I've read it...and it's definitely one that falls into the must read category as well. The link is here.

Eric King sent me this James Turk blog very late last night. It's definitely worth the read, as it's the headline story for today's column...and the link is here.