Their not saying it but deflation is their true worry, remember that their are 2 ways that money can enter the economy 1. Via the method you point out the quantitative easing where the fed prints money and buys government bonds and 2. via the fed discount window.

Now the second method is the issue causing all the problems right now, back in 1999 the supply side economic theorists got to try their idea’s out, they removed the deposit/leverage requirements on banks before 1999 they had to have 1 dollar on hand for every 10 dollars they borrowed from the fed and lent out. While also allowing consumer and investment banking to merge this allowed your savings deposits to be used in all forms of investment and not just consumer loans/credit cards/mortgages as had been the case before.

Now we are all familiar with the result of that, a bank with maybe $4 billion in cash and $300~ billion in “assets”(term used loosely) could leverage themselves 30-40-50-stupid to 1 on “assets” as opposed to real cash. So in the case of say Lehman Brothers they turned $300 billion in “assets” and $4 billion in cash into about $14.1 Trillion dollars of mostly derivative investments. *all in all about $220 trillion “credit” dollars where issued via the discount window from 1999-2007*

Anyway on to the current situation, all the banks failed, some got bailed out some didn’t(forgot their campaign contributions maybe?), but importantly the banks had to pay back all of these loans from the Fed discount window, this has the effect of slowing down lending as the banks pay down the loans, this also has the effect of removing a lot of money from the economy as they pay down their 30-40-50-stupid to 1 leverage ratio’s.

Removing money from the economy via the fed discount window also has a deflationary effect which is why they are running the quantitative easing programs.

Not to discount what is being seen in the CPI, but this is partly caused by the reduction in lending, when business credit is short businesses are forced to self finance their supply chains which causes them additional costs and lost opportunity which drives prices up, this should be temporary however as sooner or later the credit options will return. *Save for Oil that is different issue all together*

The pungent smell coming from Washington is much worse then anyone thinks!

No one is forced to except Federal Reserve Notes (U.S. Dollars) as payment for new transactions. “This note is legal tender for all debts public and private.” only pertains to debt. When you take your purchase to the counter it is still the property of the seller. This is why businesses can refuse to accept pennies as payment. If you wish to trade your goods or services it is up to you what you get in return. Also the government does mint gold, platinum and silver coins (American Eagle, and American Buffalo).

April 16, 2007: A gunman kills more than 30 people in a dorm and a classroom at Virginia Tech in Blacksburg, Va.

Sept. 2, 2006: Douglas W. Pennington, 49, kills himself and his two sons, Logan P. Pennington, 26, and Benjamin M. Pennington, 24, during a visit to the campus of Shepherd University in Shepherdstown, W.Va.

Oct. 28, 2002: Failing University of Arizona Nursing College student and Gulf War veteran Robert Flores, 40, walks into an instructor’s office and fatally shoots her. A few minutes later, armed with five guns, he enters one of his nursing classrooms and kills two more of his instructors before fatally shooting himself.

Jan. 16, 2002: Graduate student Peter Odighizuwa, 42, recently dismissed from Virginia’s Appalachian School of Law, returns to campus and kills the dean, a professor and a student before being tackled by students. The attack also wounds three female students.

Aug. 28, 2000: James Easton Kelly, 36, a University of Arkansas graduate student recently dropped from a doctoral program after a decade of study, and John Locke, 67, the English professor overseeing his coursework, are shot to death in an apparent murder-suicide.

Aug. 15, 1996: Frederick Martin Davidson, 36, a graduate engineering student at San Diego State, is defending his thesis before a faculty committee when he pulls out a handgun and kills three professors.

Nov. 1, 1991: Gang Lu, 28, a graduate student in physics from China, reportedly upset because he was passed over for an academic honor, opens fire in two buildings on the University of Iowa campus. Five University of Iowa employees are killed, including four members of the Physics Department; two other people are wounded. The student fatally shoots himself.

Aug. 1, 1966: Charles Whitman points a rifle from the observation deck of the University of Texas at Austin’s Tower and begins shooting in a homicidal rampage that goes on for 96 minutes. Sixteen people are killed, including his wife and mother, who were shot the night before; 31 others are wounded.