The money torrent

The torrent of cash over the next eight months will likely be followed by another torrent of cash after that. And then another. And another, until as Dave Rovelli at Canaccord Adams told CNBC:

"Eventually we're going to be printing so much money the dollar is going to really go down and everybody's going to try to deflate their currency against us. I just don't know how this could end well."

And that's the position I'm in right now. I'll be honest, trying to figure out every consequence of what's happening right now is making my brain ache. But we'll guess that even the chumps who are creating this mess don't entirely know what the consequences are either - but they're doing it all the same.

What I do know is this one simple fact, if just printing new money was the solution, then why wouldn't you do it all the time? In fact, why would you bother having a productive economy when you could just print free money and give the stuff away?

Of course, based on what the Fed has done with QE2 and the prospects for a QE3 and QE4, it seems as though they are moving closer to that idea.

Forget the economic theory, simple common sense tells you that it's not a sustainable course of action.

Even if you argue that just a little bit of money printing is OK as it helps kick-start the economy ignores the fact that nothing comes for free. Printing money does indeed help some, but it's at the cost of others.

That's how inflation works. It benefits those who get their hands on the money first - the government, banks and Wall Street - and penalises those that get it last or not at all - the average consumer.

And remember, we're not talking about a little bit of money printing here. We're talking about a lot of money printing.

To put it in context, take this quote from the Wall Street Journal:

"In essence, the Fed now will print money to buy as much as $900 billion in U.S. government bonds through June - an amount roughly equal to the government's total projected borrowing needs over that period."

Got that? The Fed will in effect fund the debt requirement of the US government almost single-handedly from now until next June. And what with? With money it has created from thin air.