During the question period following Ben Bernanke's Economic outlook and financial markets speech before the Committee on the Budget, U.S. House of Representatives today, Congressman Paul Ryan asked Bernanke about the effect further bailout and stimulus packages might have on inflation.

Bernanke's reply? "The inflationary effects of the capital injections will be sterilized."

Sterilized? How's that? Does he mean the process whereby the increase in monetary supply was sterilized by the sale of assets it controlled? What assets does the U.S. have left that it can sell? Is that why its forcing the sale of WaMu to JP Morgan Chase for $1.9 Billion when its deposits are worth $129 Billion? Maybe the backroom deal is that JP Morgan (NYSE:JPM) will have to contribute some of that confiscated wealth to the US Dollar support program that will be the inevitable outcome of this unprecedented monetary inflation.

The incomprehensible thing was that Paul Ryan nodded his head in apparent comprehension of how the injection of what is more like $812 billion in direct capital creation, and untold trillions in provisional capital in upping the ceiling on insurable deposits by $150,000 per account.

Meanwhile, Bernanke also pointedly indicated that Congress felt compelled to structure additional "stimulus packages" to try and motivate the economy into a positive direction, and took the opportunity to make suggestions to those designing this next package.

"Should the Congress choose to undertake fiscal action, certain design principles may be helpful. To best achieve its goals, any fiscal package should be structured so that its peak effects on aggregate spending and economic activity are felt when they are most needed, namely, during the period in which economic activity would otherwise be expected to be weak. Any fiscal package should be well-targeted, in the sense of attempting to maximise the beneficial effects on spending and activity per dollar of increased federal expenditure or lost revenue; at the same time, it should go without saying that the Congress must be vigilant in ensuring that any allocated funds are used effectively and responsibly. Any program should be designed, to the extent possible, to limit longer-term effects on the federal government's structural budget deficit."

Nancy Pelosi said that congress may convene to consider a further $150 Billion stimulus package.

The latest data from the Treasury showed the US budget deficit tripled in the 2007-2008 fiscal year ended September 30 to 455 billion dollars, or 3.2 percent of gross domestic product.