Helicopter Ben Pulls Out Bazooka

The above chart shows why Bernanke has pulled out his bazooka. There is no more room to cut on the short end, except symbolically. He admitted as such in his speech today. Furthermore there is no recovery in sight which he also admitted. So... He is doing what he said he would do, attempting to force down yields on the long end.

Good piece for the "continuing Treasury bull/deflationista" case. But what it doesn't discuss or contemplate is dollar/Treasury dumping en masse. Since the US dollar recycling machine is a perpetual motion machine, at some point its mechanics must reverse. Yes, Ben is now "printing money" to monetize long bonds, but he can't keep doing this forever, as it will cause market selling of those bonds to at some point exceed the rate he can buy them. And if not, the Fed will end up owning every US bond anyone else wants to sell, at which point they will be looking to spend their dollars on things.