$5 trillion a year

That's just the current rate the Treasury is issuing debt:

Update--Teetering on the edge of economic collapse

The government is trying to keep the struggling economy propped up with massive borrowing, which is clearly not sustainable.

If the medium/long duration scenario still holds, we are about to enter the Ramp-Up phase:

MEDIUM/LONG-DURATION SCENARIO:
Slow climb:    (already happening)
Ramp up:       Sep 2009
Crazy:         Jun 2010
Dollar Nuked:  Sep 2010
Recovery:      Sep 2010 - Mar 2012

Update to Hyperinflation Scenarios

This scenario seems likely, for the time being:

MEDIUM/LONG-DURATION SCENARIO:
Slow climb:    (already happening)
Ramp up:       Sep 2009
Crazy:         Jun 2010
Dollar Nuked:  Sep 2010
Recovery:      Sep 2010 - Mar 2012

For background:
Hyperinflation Scenarios
Discerning The Pattern

H/T to MSimon for stirring me up...

A Really Clear Explanation

Glenn Beck on Fox News gives a great, concise explanation of where we are at right now.

Even Glenn Beck Is Starting To Get It

H/T to MSimon at Power and Control.

---------------
O/T:Why hasn't Polywell Fusion been funded by the Obama administration?
IEC Fusion Technology (Polywell Fusion) Explained

The New American Currency

The dollar may already have been nuked, the new dollar is the "Amero"

Hal Turner muestra el Amero

I'm not sure how factual this is, but it certanly fits the pattern of a planned hyperinflation followed by a new currency. Hal Turner portrays this as a "New World Order" conspiracy to create the North American Union. I'm skeptical, but hey, whatever works, you know? Also, notice that this video was posted prior to the bailout mania.

My question: If this is true, how long with the "Amero" last before it's worthless? What will back the Amero, or will it just be another debt-backed security like the dollar? The hyperinflation cycle is often repeated two or three times before settling down.

UPDATE:
Hooookay, never mind. Hal Turner has gone a bit around the bend.

Hal Turner Show

Right or wrong, advocating violent revenge in a public forum is just dumb.

Revolution may be justified, but I don’t think we’re there yet. And any revolt must be based on supporting and defending the Constitution, not on vengeance. I hope most people remember that: Stand by the Constitution!

And the Amero is probably not quite real:

Amero Coin Con

Hyperinflation Scenarios

I'm projecting three possible scenarios for hyperinflation, based on reading the different historical accounts.

1. Short Duration: This is the soonest that hyperinflation could realistically hit.

2. Middle Duration: The "average" time scale scenario

3. Long Duration: Hyperinflation that is years away, but still based on current conditions.

This is not any kind of statistical analysis, just a range of values for planning purposes:

                 DURATION ESTIMATE
PHASE           SHORT     MID     LONG
Slow climb:     6mo       1y       2y
Ramp-up:        2mo       6mo      1y
Crazy:          1mo       2mo      5mo
Dollar Nuked:   1 day     1 day    1 day
Recovery        6mo       1y       2y

I wrote this in March, so taking these numbers and laying them out on the calendar, here's my predictions with March 2008 as a starting point:

SHORT-DURATION SCENARIO:
Slow climb:     (already happening)
Ramp up:        Sep 2008
Crazy:          Nov 2008
Dollar Nuked:   Dec 2008
Recovery:       Dec 2009 - May 2010

MEDIUM-DURATION SCENARIO:
Slow climb:     (already happening)
Ramp up:        Mar 2009
Crazy:          Sep 2009
Dollar Nuked:   Nov 2009
Recovery:       Nov 2009-Nov 2010

LONG-DURATION SCENARIO:
Slow climb:    (already happening)
Ramp up:       Mar 2010
Crazy:         Mar 2011
Dollar Nuked:  Aug 2011
Recovery:      Aug 2011 - Aug 2013

See previous post for more explanation. Mileage may vary. Feedback is welcome.

Sources:
http://en.wikipedia.org/wiki/Hyperinflation
http://www.sjsu.edu/faculty/watkins/hyper.htm

Discerning the Pattern

Hyperinflation has happened before, quite a few times. For that matter it's happening in Zimbabwe right now. Given that this is not a unique phenomenon, we should be able to learn from past data.

Looking at the historical record, there does seem to be a pattern to hyperinflation:

1. Slow Climb: 6 months to 2 years
2. Ramp-Up: 2 months to 1 year
3. Crazy: 1 month to a year
4. Currency Nuked: 1 day
5. Recovery: 6 months to years

In more detail:

1. Slow Climb: This is arguably "normal" inflation, but with a noticable upturn. By itself it doesn't guarantee hyperinflation, as inflation typically fluctuates anyway, but I have not found a case of hyperinflation that started with deflation. So an uptick in "normal" inflation may be a red flag that something bigger is on the way. Approximate time scale is 6 months to 2 years.

2. Ramp-up: This is the transition from "normal" inflation to something unusual. In this phase, the majority of people start changing their spending patterns due to inflation. It starts significantly affecting economic behavior. Approximate time scale is 2 months to 1 year.

3. Crazy: Full-fledged hyperinflation is truly crazy. This is the Weimar Republic, wheelbarrow full of money to buy a loaf of bread phase. There is no mistaking this one. The primary economic effort will be getting rid of your cash as fast as possible. Got money in your bank account? Wrong! Get rid of it now! Buy stuff as soon as you get paid, otherwise your paycheck is worthless by next week. Better hope your employer starts making COLA increases for each paycheck. This could last perhaps 1 month to a year.

4. Currency Nuked: Inevitably, hyperinflation is halted by revaluing the currency. There is no time scale to this, you just wake up one morning and bam! The Central Bank (The Fed in our case) puts the hammer down and says "The value of the currency is now [whatever]." It's that [whatever] that is critical. Often they will simply issue new currency at, say, 1000 times the value of the previous currency, and call it "New!". The "New Peso", the "Rentenmark", the "New Dollar", whatever. This is not a revaluation, it's just shifting the decimal point and it doesn't solve the underlying problem. Argentina tried this several times. The key to nuking the currency is to tie it down to something of real value. In the Weimar Germany, with typical German efficiency, the currency was revalued only once by tying it to a mortgage on all the land in Germany.

5. Recovery: Nuking the currency doesn't necessarily solve everything. There will be instabilities and hyperinflation could even start over again. Or you can get a recession. In the end, the solution is always for the government to maintain a sound, stable, and sustainable monetary policy while the economy sorts itself out. Recovery can happen fairly quickly (6 months), or could go on for years.

At this point, I'm not sure if we're in phase 1 or 2. Feedback is welcome.


Sources:

http://en.wikipedia.org/wiki/Hyperinflation
http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999-2002)
http://www.sjsu.edu/faculty/watkins/hyper.htm