Top of the News: Before he was named chairman of the Federal Reserve Board, Ben Bernanke was one of the foremost scholars of the central bank's response to the Great Depression. It tells us much about his state of high anxiety that the Fed is injecting another $1 trillion into the economy by buying Treasuries and other government securities. Bernanke clearly believes this is not just another recession. And he's mindful that the Fed's biggest mistake in the Depression was to tighten credit, which worsened deflation of the 1930s.

But it's a gamble. The Fed's purchasing power is not made in a tree by elves. It comes from, essentially, printing more money. If the world's biggest danger is deflation, as Bernanke and a number of economists believe, then this action is wise. The trick to price stability is "reflation" not tight-fisted central banks. If conditions are different, however, it bakes serious inflation in the cake. Thus today's market gyrations, which at the moment have the dollar down, gold and oil up and stocks falling. This is less a fear of raging inflation, than a fear of uncertainty itself, to paraphrase FDR.

But the Fed is out of the conventional tools it has used in post-World War II recessions. Interest rates are virtually zero. So now it's a step into a risky undiscovered country. Among the risks is how our overseas creditors react if they believe this will dilute the value of their dollar-based assets, including Treasuries. Then there's the danger that Bernanke is creating yet another Fed-made bubble, with an even worse crash to follow. If it works, however, it may finally get credit moving. Stay tuned.