OK, the Federal Reserve is Freaking Out

And no, I'm not talking about the non-existent inflation threat, I mean that they are great depression type deflationary spiral:

Federal Reserve officials, increasingly concerned over signs the economic recovery is faltering, are considering new steps to bolster growth.

With Congress tied in political knots over whether to take further action to boost the economy, Fed leaders are weighing modest steps that could offer more support for economic activity at a time when their target for short-term interest rates is already near zero. They are still resistant to calls to pull out their big guns -- massive infusions of cash, such as those undertaken during the depths of the financial crisis -- but would reconsider if conditions worsen.

Top Fed officials still say that the economic recovery is likely to continue into next year and that the policy moves being discussed are not imminent. But weak economic reports, the debt crisis in Europe and faltering financial markets have led them to conclude that the risks of the recovery losing steam have increased. After months of focusing on how to exit from extreme efforts to support the economy, they are looking at tools that might strengthen growth.

Let's be clear about this: The Federal Reserve fetishizes two things, inflation fighting, and opacity.

The fact that they are leaking to the press about possibly engaging in additional quantitative easing (printing money) because the 'Phants are playing "Dr. No," is an indication that:

• They really don't want to do quantitative easing.
• They are trying to kick Congress in the pants so that they engage in fiscal stimulus.
• That they feel that more needs to be done.

They are seeing things, and I don't mean the "audit the Fed" bill, that are scaring the hell out of them.