It also reminds me of a past discussion we had about the impact of open market operations on the balance sheet of the fed. And it would have to dump 700B$ in treasuries to make room for the crap on the asset side of the sheet, thus resulting in a steepening of the yield curve... (and higher anticipated inflation it they keep both on the balance sheet and inflate away). Not good for new fixed-rate mortgages, but good for bank's net-interest-margins (aka bail-out), however it will push the next administration to steep budget cuts as borrowing becomes prohibitive.

Pierre