Real estate, other currencies for example. Foreign equities and debt to a small degree because US financial assets hammering will spill everywhere.

With all that to deal with, consider another dilemma - the likelihood of painful political change, civil unrest, disruptive violence, and utter chaos. If Williams is right and hyperinflation arrives, Katie bar the door on what may follow. Revolutions are possible with three notable last century ones to consider - in Russia, Weimer Germany and Nationalist China. In each case, the old order ended, everything changed, but not for the good. How does Williams advise? Evaluate one’s own circumstances, use common sense, and forewarned is forearmed. That will help, but hard times hurt everyone.

Hopefully they won’t arrive, at least not full-blown as Williams predicts. But make no mistake. Excess has a price. The more of it the greater. America has an ocean of it. Sooner or later comes payback. “Things that can’t go on forever won’t.”

My reaction: Like Walter "John" Williams, I believe hyperinflation is imminent for the US. The current deflationary phase is ending. Our enormous trade deficits and reckless money creation guarantee that the next phase will be hyperinflation, and the trigger will be rising gold prices.

US Trade And Current Account Deficits

To put the US's international deficits into context, Here is an extract from Alan Tonelson where he writes that the U.S. Trade Deficit Endangers the American Economy.

Measuring the deficit as a share of the whole economy is critical because it indicates how sustainable America's foreign debts are. Last fall, the Federal Reserve published a study showing that most countries run into major financial trouble when their overall international deficits hit four percent of gross domestic product. In other words, these countries' foreign creditors begin fearing that their debts have become so high that full repayment is no longer possible. And the creditors become much less willing to continue lending. Sometimes they cut off the credit supply altogether, and even start selling the assets they hold in the debtor country, including their stockpiles of its currency. And other creditors tend to follow suit. If you're curious about how this rush for the doors can end, take a look at the economic devastation in Argentina.

After hitting a record 6.6 percent of GDP, U.S. trade and current account deficits now stands around 5 percent of GDP, but it is about to turn significantly higher. US GDP is enormously dependent on consumer spending which is disappear due to collapsing consumer credit. Meanwhile, the US imports aren't likely to drop much as they are goods Americans can least afford to give up: cheap non-durable goods, oil, etc. Finally, exports are likely to fall rapidly because what little manufacturing the US has left is concentrated in durable goods, the sector most sensitive to economic slowdowns (also sector hit hardest during the great depression). So while the US's GDP and exports are going to shrink enormously, our reliance on imports won't shrink much at all. In fact, when the dollar's collapse pushes oil back over a $100 a barrel, the US trade and current account deficits will easily surpass 10%.

The terminal decline in US trade relations is visually depicted in the chart below from nowandfutures.com.



 Reckless Money Creation

If there are any doubts about the US's intentions, the charts below from nowandfutures.com should make clear that the US is determined to prevent deflation by monetizing bad debt:



Same data, short term, different format
 

Gold set to Skyrocket

A break out in gold prices over $1000 will be the opening act of the depression's hyperinflationary phase. Already, precious metals are experiencing widespread physical shortages, and last week gold went into backwardation for three days. However, it is developments on the COMEX which will act as a catalyst to sent gold higher. Rising counterparty fears have caused open interest in gold futures to plummet from an all-time high of 593,000 in January to an astounding 276000 as of Friday. Investors want physical gold and aren't willing to settle for paper promises, which is why 8600 December contracts issued notices for delivery yesterday. If there are no default (big if), these deliveries will wipe out 31% of the COMEX's registered gold, sending prices soaring.

Conclusion

The end result should not be confusing to anyone. In simplified terms, the US is a country heavily dependent on foreign imports, yet produces little the world really needs and owes an unpayably large amount of debt. A hyperinflationary depression is the only possible outcome.