Hyperinflation is basically a very high level of inflation that eventually spirals out of control until the value of the currency becomes practically worthless.
Hyperinflation is caused by a massive and rapid increase in money supply without being supported by growth in the output of goods and services. The result is too much of a currency chasing too few products which leads to prices of consumer goods skyrocketing to astronomical levels. The imbalance between the supply and demand for the currency leads to a run on the currency with everybody rushing to purchase real things for their money.
The most notable example of hyperinflation was in Germany during 1922 and 1923 when the average price level increased by a factor of 20 billion.
Here is a picture taken in Germany during 1923 of a woman feeding her stove with currency notes, which burned longer than the amount of firewood they could afford to buy with the money.
The most recent example of hyperinflation is in Zimbabwe, where they recently printed a $100 billion banknote which was only enough to purchase 3 eggs at the time it was printed.
We believe the United States has taken on many of the same monetary policies as Zimbabwe and we are now on an unavoidable path towards hyperinflation.
President Obama and Federal Reserve Chairman Ben Bernanke appear to be committed to printing an infinite amount of U.S. Dollars out of thin air to get our economy out of recession, and all they are doing is creating the upcoming hyperflationary crisis, which will be a much bigger problem than the present financial crisis we have today.
Our country could’ve survived a steep recession, which is necessary and healthy to clean out the excesses of the past decade. We eventually would’ve recovered from a steep recession, but it will be impossible for the U.S. to recover from a complete and total collapse in the value of the U.S. Dollar.
All of the wealth and savings in the United States could soon be wiped out completely. We are fast approaching a run on the Dollar and rush into Gold and Silver. Unfortunately, by the time the average American figures out the truth we will likely see Gold over $5,000 per oz and Silver over $300 per oz and it will be too late for them to preserve their purchasing power.