Economist and fund manager John Hussman says another round of quantative easing would be far too costly.

"At this point, if the Fed buys Treasury bonds, it will predictably lose money — after interest — unless interest rates rise less than 20 basis points a year during the period that the Fed holds those bonds," Hussman writes in a note to investors.

"Whether or not a speculator is willing to take a bet on lower yields, it's highly unlikely that the Fed could buy Treasury bonds here at a yield of 1.5 percent and ever expect to unload its portfolio later at even lower yields, because yields would shoot higher merely on the anticipation of Fed liquidation."

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

As a result, Treasury debt purchased by the Fed here would almost certainly result in capital losses, at taxpayer expense, and those capital losses would be an implicit subsidy to speculators who sold those bonds to the Fed at elevated prices, says Hussman.

"Of course, 'sterilized QE' — where the Fed would buy bonds, and then pay banks 0.25 percent interest to keep the balances on reserve — would involve an even larger subsidy, and would then require only a 15 basis point move to put the Fed into loss mode," he observes.

That doesn't mean the Fed will refrain from more of its recklessness (which will be nearly impossible to reverse when it becomes necessary to do so), but does anyone actually believe by now that QE would improve the economy, durably elevate risky assets beyond a few months, or materially relieve global debt strains? Hussman asks.

"'QE3 — subsidizing banks and bond speculators at taxpayer expense" — there's a pithy slogan," he says.

Forex TV reports that U.S 10-year Treasury yields dropped to an all time low of 1.437 percent and the safety of German debt saw milestone lows with two-year yields dropping below zero as investors appeared willing to forgo return on capital investment in exchange for a safe place to park funds.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans