It actually is a relatively complex process, and I would imagine that the report will be difficult for most people to understand without a fairly good grasp of central banking. I will try to give a reasonably good summary:
The Federal Reserve has effectively been monetizing far more US government debt than has openly been revealed, by cleverly enabling foreign central banks to swap their agency debt for Treasury debt. This is not a sign of strength and reveals a pattern of trading temporary relief for future difficulties.
This is very nearly the same path that Zimbabwe took, resulting in the complete abandonment of the Zimbabwe dollar as a unit of currency. The difference is in the complexity of the game being played, not the substance of the actions themselves.
- The Treasury of the US government raises money to finance its deficits by selling debt certificates at auctions
- Because the Treasury is running such high deficits in a period of recession, there is concern that there will not be enough buyers at these auctions, which will cause interest rates to rise, the costs of deficit spending to increase, and could spark a panic on the dollar
- The FED, therefore, would like to buy the Treasuries with money created out of thin air, e.g. "monetize the debt," in order to artificially increase demand for these certificates and ensure that these auctions go smoothly
- For a number of reasons, the FED cannot directly buy Treasury debt at auction
- Instead, the FED prints money to buy other forms of debt called "Agency Debt," which includes mortgage backed securities and foreign central bank debt, under an agreement that the sellers of these securities will use the money to buy Treasury debt on behalf of the FED