2 questions

[Beavis]

Some things I've been wondering with regards to the current financial crises.  I'm not an economist, just and interested bystander, so apologies if my questions are stupid.  Any economists out there like to comment?

1. Regarding the lack of trusts between banks, and the unwillingness to lend to each other, a big issue was said to be the CDS contracts, where nobody knew who was liable for what.  My question is: why can't the government (SEC, Fed, whoever) simply mandate that all CDS contracts must be declared to the authorities (or even publicly stated) by a certain date?  They could even rush a law through congress stating that any contract that isn't declared by X date will be null and void.  What am I missing?  I just don't get this lack of transparency problem -- it seems more a lack of resolve than a real issue.

2. As for the problem of deflation / inflation:  The fear seems to be that in a couple of years, the current measures being taken will lead to massive inflation and US government indebtedness.  But couldn't the government just print money at will now, recapitalize the banks with it (who will then distribute it in terms of x times the loan amount) and later raise banks' capital adequacy as necessary once the specter of deflation has been defeated?  Say there's rampant inflation.  No problem, increase the capital adequacy ratio to a draconian level if you must. The banks might not be very happy with this, but four-letter-word them!  They're the ones that got us into this.  So whatever excess of money that would be in the economy in a couple of years need not cause inflation, nor needs to be paid off by the government.  As GDP grows again in the future, the banks' capital adequacy ratio can gradually be decreased again to ensure the right level of money supply.  Again, am I missing something?  It seems a fairly straightforward way to first fight deflation and later inflation, without adding to the debt burden of the US (I'm focusing on that country for now, since they're at the core of this).

[several reasons]

Qu 1

Why would anyone underwater simply not declare it, since zero sum game all contracts will not be declared by one side.  What does that mean for your scheme, are they valid or not? If not no new trades, if they are what is the point.

What about trades between different regulated bodies?

Its illegal.

Qu 2

Printing vast amounts of money should cause currency depreciation. Its interesting in US it isn't much now but that (may) be as if that happened everyone is scr*wed.  Couldn't do it indefinitely though, nor could others manage it, see UK which is a bigger derivatives centre than NY.