A quick ditty on why there is little inflation

Not too long ago, I read something to the effect that banks are not putting their money at work.  They don't lend all that funny money the Fed is putting out there.  So, where's the money going?  Into the bond markets, that's where.  This keeps yields down all across the yield curve.  So, while the Fed keeps the Fed funds rate down to zero, QE keeps the rest of the yield curve flat.

There's no inflation because the money isn't really going into the economy.  Instead, it just finances the deficit.

Deficit spending doesn't cause inflation.  That's what I observed during the Reagan years.  I expected inflation back then, but it didn't materialize.  I expected it again during this Federal Reserve QE, but it isn't happening again.  So, I suspect what's happening is the same thing that happened in the eighties.  QE just finances the deficit, which doesn't cause inflation.

If it went into the private economy, it would cause inflation because of the multiplier effect.  At least, that's my theory now.