Fed Funds Rate near 0: Path of No Return??

An interesting development last week where Federal Reserve has decreased Federal Funds Rate to a range of 0 to 0.25%. Even though the move is hardly surprising at all given all the facilities that the Fed has implemented, however, Bernanke has asserted that the Fed will use all tools necessary to maintain growth and price stability. No doubt, the market zoomed after the announcement.

However, to me, they have embarked on a path of no return because they had exhausted their powerful weapon, and now left with one less tool to fight the recession. It smacks of desperation, and on this massive scale, it might backfire on the economy if it fails. No one will know the consequences because "quantitative easing" has only been tried, in Japan, and we knew they went through an "L" shaped recovery.

Another worry is the impending inflation and dollar collapse that might happen down the road with the Treasury bubble that is going on. Also, since US consumers are already saddled with too much debt, they might not be able to re-finance even with mortgate and credit card rates at historic lows. These are the consequences of the classic definition of "liquidity trap", which could feed upon the economy and causes a self-fulfilling negative feedback loop.

An article that I found from RGEmonitor that elaborated on this topic for interested readers:
http://www.rgemonitor.com/us-monitor/254798/trepidation_about_quantitative_easing_version_20