QE2 is a portfolio allocation strategy- it forces people who would have otherwise bought bonds to buy risky assets instead - in the short term.. the effect in the financial Markets is "inflation". But in the longer term.. QE is actually deflationary, as the interest that the public would have gained on $500 billion in bonds gets sucked out of the system. Also being at the end of a credit bubble negates the benefit of steering the yield curve, you end up pushing on a string... Warren Mosler's many articles, and specifically Mark Lapolla's recent Welling@Weedenco April 29th article gives in-depth opinion on this specific issue. http://welling.weedenco.com/html/1307_LI_Lapolla.pdf
There will be no QE3, i.e no more bond purchases past June 30th. The fear of a run on the dollar is actually a bigger concern now.
with current short term interest rates barely above zero it might be many years before debt monetization will be needed And definitely that's not a short term problem
try to explain QEI, II and possibly III to non finance or econ majors is like trying to talk to a brick wall. They'll understand fully when they realize that a drape has been drawn over the depression to make it appear like a recession/recovery. Once the Fed pulls the crack and the patient will go through severe withdrawals.
Repayments on existing debts maybe. However the need to get capital to pay for government and growing welfare is rising and the only way to pay for that will be through printing money.