Discussions

My most eastern wall and two/three inches of the floor is sooooo cold. I know that I must fix it properly but I'm wondering if I could hang a blanket on the wall and floor to help keep it out for right now? Would it damage (frost build up/water damage) or would it be effective at all? (short term until I can fix the actual problem)

With it just hanging/sitting there, it likely won't do much. If it's drafty at all, you might see some improvement because the drafts are redirected, but I wouldn't expect much more than that.  
 
I wouldn't expect it to cause any problems either though.  
 
If a quick fix is what you're after, a sheet of styrofoam insulation on the inside of the wall would likely do a much better job.

You could trap moisture against the wall and end up doing damage. Blanket may freeze to the wall.

A better option for you, depending on how high the house sits out of the ground would be to shovel (or better to blow) snow up against the outside of the house. Pile it high enough to cover where the wood frame meets the foundation. This will eliminate the drafts and also act as insulation.

We have had a lot of snow so far this winter, it is good insulation. Can you bank the outside wall with snow ? If you can you will immediately notice the dif.  
If you have a couple of sheets of styro put that against the wall before the snow.  
As was mentioned above, hanging a blanket or putting styro against the inside will cause moisture to form and you will get mildew or even rot.

I have already piled snow i was hoping that would do the trick.  
 
I may just have to bite the bullet and see what it's going to take to properly fix.... thank you all for your input.  
 
(Side note: there is no draft, just cold to the touch)

I lived in The Northwest Territories for a few years and this was done in some of the older houses, but not hung on the wall. Hung off of curtain rods a few inches from the wall so that the blankets won't freeze to the wall. I thought they were cracked the first time I saw it (just like some of the commenters will when they read this), but it worked, it was more commonly used over drafts doors or older windows but did see it on walls. More commonly comforters or heavy curtains were used. Just be sure to leave a few inches between the blanket and the wall for air movement. I am guessing you have an older house and the insulation has sagged or never really existed.