We've got problems. A number of structural issues -- from Europe's woes to the federal debt problem to stagnant job growth and still-falling home prices -- will likely push the American economy dangerously close to a new recession in 2012.

Much of Europe and Asia are already there. Indeed, a coalition of Europe's major economic institutions said Wednesday that the eurozone is already in a recession.

It's probably not surprising, then, given the activist nature of our central bank, that the Federal Reserve -- which is already in the midst of Operation Twist to pull down long-term interest rates and has committed to holding short-term rates near zero through 2013 -- is starting to fidget. A chorus of officials have hit the speaking circuit over the past week, talking up the potential for more policy easing.

In simple terms: The Fed is laying the groundwork for another round of unmitigated money printing, also known as quantitative easing -- or QE3, as it would be the third iteration of the strategy. If carried out, it would not only be a political blunder in an election year but it would do further damage to the economy.

Backing up a minute, there is evidence that, all else equal, quantitative easing is effective in bringing down interest rates and stimulating growth when the economy is on the ropes and inflation is fully at bay. This has a lot to do with the surprise factor or novelty effect.

Thus the success of the original QE1, which started back in late 2008 with the Fed's announcement that it would buy $600 billion worth of mortgage securities and mortgage debt. This was expanded in March 2009 to include U.S. government debt. 

The second iteration, teased in late 2010 and launched that November, was decidedly less successful despite Wall Street's excitement over Fed chief Ben Bernanke's overt goal of pushing up the stock market as a way to boost economic growth despite the risks of higher inflation and dollar devaluation.

It didn't work.

 You can see this in the chart above. GDP growth peaked just before the Fed teased QE2 and plunged afterward as inflation spiked. The Fed's preferred core measure of inflation, which filters out fuel and food prices, jumped from nearly 0.5% to more than 2% in a smooth, steady upward trajectory.

Headline inflation, which includes food and fuel, increased from 1% to nearly 4% a few months ago before pulling back slightly.

If this isn't an example of the "significant increases in inflation" Bernanke derided his critics for warning of in his November 2010 opinion piece in the Washington Post, I don't know what is.

What's more, inflation pressure looks to be bubbling again as crude oil pushes over $100 a barrel on Iranian saber rattling and Wall Street shenanigans.

These pressures are translating into gas price increases at the pump. And they are sure to show up in fourth-quarter inflation reports due next week. With inflation so high, it'll be hard for the Fed to justify another round of QE. It'll also give the Fed's political opponents in the Republican Party added fodder to attack Bernanke and his pals as assisting President Barack Obama's re-election chances.

That's not stopping them from trying anyway over the past week:

• Chicago Fed president Charles Evans said Wednesday that more needs to be done to support housing, that the banks need to make more loans, and that, if needed, the Fed could provide another $600 billion worth of quantitative easing.
• Atlanta Fed president Dennis Lockhart, while somewhat skeptical of its effectiveness, would not rule out QE3.
• San Francisco Fed president John Williams said there is a case to be made for using QE3 to purchase additional mortgage securities.
• Fed governor Sarah Raskin said the Fed's use of unconventional policy tools, including QE1 and QE2, has been appropriate.
• Fed governor Elizabeth Duke said there is too much slack in the economy to create inflation.
• Boston Fed president Eric Rosengren said that the Fed still needs to support the recovery and that the purchase of mortgage securities could do the trick, since inflation is likely to remain below 2% for several years.
• New York Fed president William Dudley said it would be appropriate to consider additional easing measures to assist the housing market.

I think you get the idea.

It's very possible that the Fed will decide to launch QE3 as the temporary tailwinds boosting the U.S. economy -- consumer savings draw-downs and the now-disappearing drop in gas prices -- end just as the eurozone crisis kicks up a few notches.

The script after that would look something like this: Stocks rally on Fed largess and another flood of cheap cash, speculators dump said cash into commodity speculation, prices for energy, precious metals and foodstuffs swell, inflation measures increase, consumer spending and consumer confidence drop, the economy weakens further, and stocks drop.

I don't know about you, but all of this just feels like a bad dream. For the brave, silver looks to be the best way to bet on QE3, with the iShares Silver (SLV) breaking up and out of a long downturn.

I found SLV with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)

Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up.

The author can be contacted at anthony@edgeletter.c​​om and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.