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Robert B. Tobiasz, author of the "RBT Commentary," recently discussed the expected impact of hyperinflation in his July, 2009 commentary entitled "Hyperinflation Is On the Horizon!" (http://www.ehsportal.com/commentaries-us-economy/hyperinflation.php):

1. Extremely high prices and/or shortages for the basic necessities of life such as food, medicines, medical care, gasoline, oil, natural gas, propane, etc.;

2. a dramatic collapse in the value of U.S. Dollar denominated paper assets such as savings accounts, U.S. Treasury debt (bonds, notes, bills), U.S. Agency debt (Fannie Mae, Freddie Mac, etc.), corporate bonds, state and local bonds, etc.;

3. much higher prices for "hard assets" such as commodities, precious metals, etc;

4. continued deterioration in the prices of residential real estate and a STUNNING COLLAPSE in the prices of commercial real estate. Expect the latter event prior to year end 2009;

5. uncertainty with respect to the pricing of common stocks. In a normal hyperinflation, common stocks should skyrocket in price. In this case, any escalation in common stock prices might only accrue to companies involved with precious metals and, possibly, other commodities and energy;

6. much higher interest rates, possibly reaching the teens or higher;

7. additional bankruptcies of both large and small companies;

8. unemployment rates that exceed the 25% - 30% seen in the 1930’s Great Depression;

9. outright collapse or substantial impairment of public and private pension plans such that individuals will not be able to count on the pension payments that they had expected in their "golden years;"

10. significant alterations to all entitlement programs funded by the U.S. Federal Government, especially Social Security, Medicare and Medicaid. The bottom line will be a substantial reduction in benefits for almost everyone;

11. a disproportionate negative impact on the "middle class," which is the backbone of an economically sound country;

12. secession movements by states which will be somewhat similar to the breakup of the Soviet Union in 1989;

13. increased protests, crime and violence, possibly resulting in the institution of martial law, as U.S. citizens become more desperate due to loss of jobs, homes, investments, pensions, etc;

14. increased reliance on various barter systems whereby like-minded individuals trade needed goods and services with each other;

15. a possible war (there are numerous flashpoints throughout the world) or swine flu outbreak which would serve to distract Americans from their dire economic circumstances; and

16. a possible "bank holiday" in which all banks are closed for an undetermined time so that new bank rules can be imposed, weak banks can be closed, etc.

Not a pretty picture.

- Ed Smith