“So which of the above 3 is least likely to hurt current homeowners?”

Depends on which homeowners you are talking about. Is it the homeowners who have owned for 10 plus years and have not heloced their home to death? Or, is those who have and more recent bubble run up buyers (2003 to 2006)? If it’s the latter, then so what? The reality is that they are not a majority. However, prices are set at the margins. I guess what I’m saying is that you are missing another choice. Choice D. Bernanke lets the bubble assets deflate on their own. No inflation to deal with, no interest rate hikes to deal with and no wage inflation issues. In my opinion, that is the easiest thing for them to do while still protecting the dollar.