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Unless our political leaders wake up and change course, we are headed for hyperinflation. We're not there yet, but I believe we are on the cusp, and when it happens, we will no longer recognize America as we know it.

The cause of this calamity was launched many years ago and has been continued by successive administrations, adopting policies of deficit spending.

Wikipedia defines hyperinflation as "...inflation that is 'out of control', a condition in which prices increase rapidly as a currency loses its value...A vicious cycle is created in which more and more inflation is created with each iteration of the cycle...(I)t becomes visible when there is an unchecked increase in the money supply (or drastic debasement of coinage) usually accompanied by a widespread unwillingness to hold the money for more than the time needed to trade it for something tangible to avoid further loss. (Emphasis added).

Hyperinflation dates back to the Roman Empire - and is graphically illustrated by the situation in Argentina from 1969 to 1992, when their currency reached the point where one pre-1969 peso equaled ten trillion (twelve zeros) new pesos. Savings and investments that were not inflation adjusted and continued to pay a fixed return, such as bonds, quickly became worthless.

When Argentineans received their pay checks, they immediately tried to convert their pesos to commodities or other assets that would hold their value as the rate of inflation continued to escalate. Wealthy citizens tried to deposit money in American banks or they bought stock in American companies. The less wealthy attempted to hold U.S. $100 bills or bought houses or gold or commodities, such as rice -- anything to get rid of their own currency. They also tried to offset the consequences of unbridled inflation by indexing contracts, which adjusted payments to compensate for the rise in prices over time.

An extreme example of the effects of hyperinflation is seen in Zimbabwe, where in a December 19, 2008, the Christian Science Monitor noted: "Under the ruthless rule of its despotic strongman, Robert Mugabe, its economy is near collapse and its people live in fear, as the regime cracks down on political opponents. Thousands have died of malnutrition and starvation... Mismanagement of the economy has produced inflation of an incredible 231 million percent, a figure undoubtedly outdated even as this column is written. The ordinary staples of existence are beyond reach of most citizens." (Emphasis added)

The bottom line is that a nation's currency becomes worthless during runaway inflation. Productivity decreases and capital takes flight, along with other dire consequences, such as the government refusing to redeem its outstanding bonds.

After the First World War, hyperinflation crippled the German economy and visited terrible personal hardships on the nation's citizens. James Turk has observed: "The newly formed German government...kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated...All the wealth saved in Reichsmarks was eventually wiped out."

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