Those who refuse to learn from history are doomed to repeat it, said George Santayana, the philosopher. But this familiar maxim is being ignored this week by President Barack Obama and his fellow Democrats on Capitol Hill this week as they complete action on the chief executive’s proposed 2010 federal budget. With its unprecedented deficit approaching $2 trillion, this budget proposal is a certain prescription for hyper-inflation. So every senator and representative who votes for this monster $3.6 trillion budget will be endorsing actions that will turn America into the next Weimar Republic. For those too young to remember, that was the period in Germany in the years between the two world wars when people needed wheelbarrows full of money to buy a loaf of bread.
Note this this trend started under the Bush administration, but has greatly accelerated under Obama, Pelosi, and Reid.
I recommend taking some time to read through FerFAL's Surviving in Argentina blog, to see what it's like when a modern, developed country experiences an economic collapse, including hyperinflation.
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I suspect hyperinflation in modern times in the US may not have the physical-visceral feel of the Weimer Republic. We may see bread and vegetables are two, three or four orders of magnitude more expensive, but our debit and credit cards fit in out wallet all the same. No need for the wheelbarrow.
Additionally, the application of technology like real-time computing and the internet will put an interesting twist on the affects of inflationary change. Online bartering via sites like www.craigslist.org or purchasing through Amazon.com (which employs near-real-time price recalculation) adds new factors to the equation. These technologies might accelerate the rate of inflation or side-step it.
History provides, at best, a foggy lens on divining the future. All this is really a long-winded way of saying plan for the worse and hope for the best.
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