It's all just a shell game

So tell me how this works. The Federal Reserve loans money to banks at near 0%, and then instead of lending it out the banks are buying US Treasury Notes? So how is this NOT monetizing the national debt? The Treasury gets it's money from the banks who got it for free from the Federal Reserve. Doesn't sound too much different than the Fed purchasing $300 billion of Treasury Debt.

But oh well; all's well that ends well. :) We're experiencing Deflation anyways, right?