Below are live graphics displaying the current and historical data on the US dollar, in this period of the first quarter of 2011, when the United States are walking towards a stampede of hyperinflation.

Money printing is out of control in the US, and in the long term it gets translated as heavy depreciation of the US dollar (as in ‘walking towards toilet paper value’), civil unrest, political unrest, severe poverty, plus all the hidden and visible war torn-like effects a surplus of hyperinflation can bring to a nation; and all the hidden and visible war torn-like effects a severely devalued world currency can bring upon everyone else.

In the foreign exchange market and international finance, a world currency, supranational currency, or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world’s primary reserve currency.

In March 2009, as a result of the global economic crisis, China and Russia have pressed for urgent consideration of a global currency.

A UN panel of expert economists has proposed replacing the current US dollar-based system by greatly expanding the IMF’s SDRs or Special Drawing Rights.

Which, in all fairness, it is hardly going to happen anytime soon, having in mind the uselessness of the United Nations - the United Nations themselves need urgent replacement.

In economics, hyperinflation is inflation that is very high or “out of control”. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases rapidly as the functional or internal currency, as opposed to a foreign currency, loses its real value very quickly, normally at an accelerating rate.

Hyperinflation becomes visible when there is an unchecked increase in the money supply usually accompanied by a widespread unwillingness on the part of the local population to hold the hyperinflationary money for more than the time needed to trade it for something non-monetary to avoid further loss of real value. Hyperinflation is often associated with wars (or their aftermath), currency meltdowns, political or social upheavals, or aggressive bidding on currency exchanges.

A vicious circle is created in which more and more inflation is created with each iteration of the ever increasing money printing cycle.

A dramatic increase in the velocity of money as the cause of hyperinflation is central to the “crisis of confidence” model of hyperinflation, where the risk premium that sellers demand for the paper currency over the nominal value grows rapidly.

During a period of hyperinflation, bank runs, loans for 24 hour periods, switching to alternate currencies, the return to use of gold or silver or even barter become common.

Many of the people who hoard gold today expect hyperinflation, and are hedging against it by holding specie.

30-Day Gold Value

30-Day Silver Value

In the confidence model, some event, or series of events, such as defeats in battle, or a run on stocks of the specie which back a currency, removes the belief that the authority issuing the money will remain solvent — whether a bank or a government.

Because people do not want to hold notes which may become valueless, they want to spend them.

Sellers, realizing that there is a higher risk for the currency, demand a greater and greater premium over the original value.

Norwegian Kroners to 1 USD

Russian Rubles to 1 USD

Chinese Yuans to 1 USD

Brazilian Reals to 1 USD

Canadian Dollars to 1 USD

Euros to 1 USD

Swiss Francs to 1 USD

British Pounds to 1 USD

It is sharply more expensive to buy any foreign currency, and it is also sharply more expensive to buy silver and gold, both hitting record highs as people get rid of their US dollars as quick as they can in favour of alternate currencies.

In all means, the supranational currency is breaking down, hyperinflation is kicking in, the Euro is by no means far behind, and you need not be an economics expert to realize what is going to happen next.

In countries experiencing hyperinflation, the central bank often prints money in larger and larger denominations as the smaller denomination notes become worthless. This can result in the production of some interesting banknotes, including those denominated in amounts of 1,000,000,000 or more.

One way to avoid the use of large numbers is by declaring a new unit of currency (an example being, instead of 10,000,000,000 Dollars, a bank might set 1 new dollar = 1,000,000,000 old dollars, so the new note would read “10 new dollars.”).

Metallic coins were rapid casualties of hyperinflation, as the scrap value of metal enormously exceeded the face value. Massive amounts of coinage were melted down, usually illicitly, and exported for hard currency.

It is assumed (based upon IT practices for transnational processing that have evolved since the 1970s) that most money held by banks is not represented by 64 bit floating numbers. Under hyperinflation conditions most bank processing systems could fail due to overflow conditions.

Interest rates, wages and prices are linked to a price index and the cumulative inflation rate over three years approaches, or exceeds, 100%.

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

• Outright lying in official statistics such as money supply, inflation or reserves.
• Suppression of publication of money supply statistics, or inflation indices.
• Price and wage controls.
• Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.
• Adjusting the components of the consumer price index to remove those items with prices rising the fastest.

None of these actions addresses the root causes of inflation and they, if discovered, tend to further undermine trust in the currency, causing further increases in inflation. Price controls will generally result in hoarding and extremely high demand for the controlled goods, resulting in shortages and disruptions of the supply chain.

As of the date of issue of this article, 1st of March 2011, the graphics above show that the US dollar is being spilled by people’s every single orifice, and as mentioned by Max Keiser, soon enough that $100 pension will not buy you an apple – meaning, people in low incomes are set to practically, if not, starve.

Products available to consumers may diminish or disappear as businesses no longer find it sufficiently profitable (or may be operating at a loss) to continue producing and/or distributing such goods, further exacerbating the problem.

A growing gap in class differentiation – the extreme rich sitting in gold, and the extreme poor trying to eat – leads to a sharp increase in civil unrest, intense internal conflicts of all kinds, and war torn-like violence.

Hyperinflation often ends when a civil conflict ends with one side winning.

No episode of hyperinflation has been ended by the use of price controls alone. However, wage and price controls have sometimes been part of the mix of policies used to halt hyperinflation.