Easily the best summary post of the effects of QE2 that I have yet read
Very long post by Cullen Roche, so I won't try to repost it here. But this is an absolute must read.
QUANTITATIVE EASING 3 – ANOTHER MONETARY NON-EVENT? - http://pragcap.com/quantitative-easing-3-another-monetary-non-event
Read it, and if it didn't all make sense, read it again. There is a huge difference between the markets and the economy. And there is a huge difference between vertical money creation (via Government Spending) and horizontal money creation (loans/margin taken out to make speculative bets or to hedge against inflation concerns).
Posts like this one are key to understanding how in a weak demand environment (balance sheet recession), and an environment where everybody seems to mislabel QE as 'money printing' or 'debt monetization' based on basic misunderstandings, how one form of 'inflation' manifests (and to understand the distinctions between forms and the environments where they manifest, read http://caps.fool.com/Blogs/why-deficit-spending-and/621467).