One thing is certain, markets in the coming financial year will not be underwritten by the US Federal Reserve's easy money activities (AKA QE2), they will have to look to more mundane factors for their stimulus.

The Fed ended its $US600 billion bond-buying program, known as QE2, overnight Thursday and won't replace it, having done the job and heading off the threat of deflation that was so apparent a year ago.

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The Fed won't shrink its balance sheet, it will maintain the current expansive monetary policy by reinvesting the proceeds of maturing securities and interest payments in new securities.

But there won't be any more large scale purchases, as there was from October to yesterday.

But that hasn't stropped many American investors keeping hope alive that the Fed will do something if the US economy continues to struggle like it currently is (See separate story).

The answer is that it will do nothing because its capacity has run out of steam, both in a monetary sense and in an intellectual sense.

The Fed has exhausted a lot of goodwill in the QE 2 campaign has yet to offer any hints of more monetary easing to come.

So what did the Fed's second bout of easing, which started last October, but was signalled last August, end up achieving?

Well the US dollar index shed around 10% in value.

But gold futures rose 22% and the Thomson Reuters/Jefferies CRB index of global commodities gained around 28% (but was up by far more in April, before the sell down started in early May).

The Standard & Poor’s 500 Index jumped 26%.

The S&P 500’s market capitalisation rose 31% or $US3 trillion from August 26, the day before Mr Bernanke’s Jackson Hole speech in August and through this year’s peak on April 29.

US 10 year bond yields have jumped around all over the place.

They rose to 3.75% in February of this year, after falling to 2.50% in August, just after the easing started.

That rise wasn't supposed to happen, but inflation fears took hold in the US as oil and food prices jumped, crunching the economy.

This year they have fallen to a low of around 2.84%, and are back at 3.16% overnight Thursday with the Greek default story easing.

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Headline US inflation jumped from less than 1% in the middle of last year, to around 2.4% earlier this year.

Core inflation has jumped to around 1.4%, from virtually nothing, pushing the deflation threat away.

Inflation should start easing from now on, as the Fed has predicted.

A 25% or so plunge in grain futures prices in the past three weeks will help.

May’s unemployment rate was 9.1%, not much better than 9.7% during October 2010, the month before QE2 started. The rate had fallen to 8.8% in April.

From August 26 through April 29, the price of a barrel of West Texas Intermediate crude oil rose 55.3 % to $US113.93 a barrel.

It traded just above $US95 last night after the May sell down and then the intervention by a group of countries last week.

Oil shed 11% in the three months to June 30 after jumping 17% in the first quarter and causing that big boost to inflation and worrying governments and consumers around the world.

The unrest in the Middle East and North Africa had as much, if not more to do with that than the cheap money from the Fed.

From now on though, we can expect more restrained price movements in coming months, but watch the growth reports from the US and China.

But the debt ceiling argument is the most pressing problem.

Failure to do anything in the US this month will cripple the economy, confidence and markets there and worldwide.

An increase, spending cuts (but not happening) and pushing a final decision off until after the 2012 elections in the US will trigger a substantial rebound on many markets.

If we get growth emerging in the US and China, a deal on the debt ceiling and spending, and Greece back in the box, we could see a major recovery in the second half of the year, and on into 2012.

Oil and other commodity prices will lift (Watch copper, in particular).

But that's a big 'if' at the moment.

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