Oh okay. In this scenario the US Gov would simply declare the currency unit to be a fraction of its original value then?
It seems something like that would be very unpopular politically. Creditors and savers would be pissed off...pretty much everyone. If the Fed however continues with bond buying, this is a less blatant means of accomplishing the same thing, right? The US gov will have an easier time paying off its debts in either case.
I know China and Russia have started using their own currencies for bilateral trade as opposed to the USD, so there is less foreign demand in that case.