Economic Collapse points out that Bernanke once swore before Congress that the Fed would not monetize the debt -- yet with QE2, this is exactly what he's doing.
Also in the blog, EC includes a quote from Peter Schiff that leads me to believe that I was overanalyzing matters in my last piece in stating that QE policy is "inherently self-contradictory." The fact is, Bernanke is buying Treasuries because the Fed can't find any other buyers. Writes Schiff,
At the end of the day, all this deflation talk is a red herring. The true purpose of QE 2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.