Dim expectations for the QE2

Paul Krugman has been looking at Japan and its lost decade for guide as to what the next round of Fed Quantitative Easing might look like. In a recent blog post he looked at how much effect the Central Bank of Japan's policy of quantitative had on the Japanese money supply. The evidence says it has almost no effect. Here is the graph to support this:

Krugman's explanation for this was that when an economy is up against the zero bound, monetary policy ceases to have any effect. Sounds familiar?