An article by Stephanie Flanders commented (here) on the technical limits of QE for the United Kingdom. For smaller economies with lesser amount of government debt outstanding, QE is limited by the amount of debts that is available to be purchased. Bank of England (BoE) and the Monetary Policy Committee, because of various restrictions they have placed on themselves for what they will purchase, commented that “the current rate of purchases - at around £20bn a month - is close to the limit of what is possible, without seriously distorting the market.”
To get around the technical limit, the BoE can of course expand the type of securities they purchase, and the government can also issue more debt. For better or for worse, the Federal Reserve is in no danger of running out of securities to purchase.
As of December 31, 2011, the total amount of outstanding debt in marketable treasury securities is $9.917 trillion. (Source: Monthly statement of the public debt of the United States) As of December 28, 2011, the Federal Reserve is *only* currently holding about $1.671 trillion of Treasury securities outright. (Source: H.4.1 Factors Affecting Reserve Balance)
Reference: A flat economy (cont’d) [BBC News].