Fed is looking for new tools.

There is an interesting report in the Financial Times on the FED's efforts to boost the economy:

http://www.ft.com/intl/cms/s/0/7015fcfc-d419-11e1-942c-00144feabdc0.html?ftcamp=published_links%2Frss%2Fworld_us%2Ffeed%2F%2Fproduct#axzz21PTO8FeF

Reducing rates has now become ineffective. Why? Because the rate is now 0.25% so it can not be lowered much more. Buying up assets has also been tried. The only thing that has not been tried is stopping paying the banks for their excess reserve and allowing them to really pump up the money supply. Theoretically, the banks can leverage their $1.5T into $15T! That would start inflation rolling.

Some experts conclude that Europe and us have only two ways to deal with the huge debt: 1. explicit default or 2. default via inflation. These experts believe that the US is two years behind Europe. However, we are now at 100% National Debt expressed as GDP. Together with unpaid obligations incurring, the deficit is nearly $5T annually.