Ok, help me out here because I'm a bit confused.
Lets consider it money supply, I use printed generically, its not in circulation per se unless it is lent. So isn't that money sitting there in reserve? You call it swapping, but in reality isn't the Fed buying bank assets and its own bonds? This money exists on balance sheets. You can't just snap a finger and it disappear. I think what you are saying is that unless that money is released into the money supply it won't trigger inflation.
Essentially, we disagree over is the fundamental nature of banking; the exogenous vs endogenous theory of money. I subscribe to the endogenous theory, so I'll do my best to explain it.
Private sector banks create all the money in our modern monetary system. They create money by making loans. Banks first extend credit, simultaneously creating a deposit, and then collects deposits and reserves after the fact. The amount of money they create depends on their risk appetite. When risk appetite is high, liquidity appears to be abundant and vice versa.
In the aggregate, banks don't lend reserves (the money multiplier is a myth that exists only in our textbooks.) They can shuffle them amongst each other but ultimately they stay in the banking system. Its a closed loop.
When the Fed's desk engages in QE two things can happen: 1) the bank gets the reserves and the Fed gets the bond, assuming the bank is the seller or 2) if QE is done via a non-bank (i.e. asset manager) the individual receives a deposit, sells the bond to a bank, and the bank on-sells a bond to the Fed. The important thing to take away is that the net worth of the private sector doesn't change, only the composition of its capital structure.
Of course Bernanke wants inflation, he is a student of the great depression. He recognizes that in an economy with a large private sector debt, there is a relationship where a fall in asset prices causes a shortage of dollars, thus producing deflationary pressures that can spiral out of control, a la the great depression, if the central bank does not intervene.
The Fed has nothing to do with the deficit, that is fiscal policy, the Fed focuses on monetary policy. Don't conflate the two so liberally.
The Ten Year has increased 1% from the lows of May. That is it. The One Year has actually decreased. If the Fed wanted to bring the long end down, they would simply announce that they were targeting a specific yield on the 10, 20, and 30 year bond, crush a few foolish bond traders, and let the market do the rest.
That is exactly the point. What makes you so sure you will be able to put on that position in time? You and everyone else is looking for that trade. Can you identify a major market break before everyone else? What happens if you get your timing wrong? What if there is lots of volatility? It seems like an exorbitant amount of risk relative to the reward.
You say stick with gold, but why? What happened to gold in '08? It lost value when investors needed it most. Do you think this time is different? Precious metals are small and relatively illiquid markets relative to the kinds of positions the biggest 5 minute macro tourists have. And when they decide to leave the door is going to look surpisingly small. Does that not concern you?