[Hoot Gibson]

What often happens when a country continues to borrow money at an ever increasing rate is that the point comes where a decision is made to intentionally inflate the nation's currency to repay debt with "cheap" money. However, this also allows private individuals with savings to repay debts with money that is worth far less than it was when debts were incurred.

For a time, short while, inflation is great for people paying off homes and cars but not so great for people who loaned the money with the expectation that they would be repaid with interest. Businesses begin to fail and people lose confidence in the currency and prices start skyrocketing. Everybody becomes fearful of extending credit to anybody else, not because the borrower is not trustworthy but because they no longer trust their own government and currency.

Once hyperinflation kicks in, black markets emerge and barter begins replacing currency for major purchases. Sellers also begin demanding payment in gold, silver, etc. or in a more stable currency. Ironically, for several decades, the currency of choice for international trading and black markets has been the US dollar. When that stops being the case, life as we know it will change drastically for the worse. There are early signs that this move away from the dollar has already begun.