If the US government’s debt was a reality TV show contestant, it would be on the Biggest Eater. This is an imaginary show whose lineup would most likely consist of sumo wrestler types. Their job is to eat everything in site until they get bigger and bigger and then succumb to gout and heart disease. It sounds like an awful show. Let’s hope it gets canceled because I certainly don’t want to know what those guys will be eating during sweeps to rein in viewers.

In an ideal world, this show wouldn’t even make it past the pilot stage, and all the contestants instead would be sent over to the Biggest Loser where they learned strategies to take control of their lives and come out slimmer and healthier. Instead our government is just eating uncontrollably and our debt continues to skyrocket. But, like any addict, they have given the people who care about them the most a method of enabling their bad habits – anyone in the world can help the US make payments on its debts! It’s true! See below, directly from the US Treasury’s website:

“How do you make a contribution to reduce the debt?

Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188”

So if you were planning to make a payment on your underwater mortgage or pay off some credit card debt or buy gold to prepare for the coming inflation, you can pay off the government’s debts, instead! Heck, why not just sign over your unemployment check.

And I thought my mortgage was bad!

Newsweek has put together this graphic to explain the magnitude of our ballooning national debt. Considering that our recent third quarter growth was bankrolled by more government debt, its pretty interesting. While we have 18.8 million homes sitting vacant right this second across America, 23 percent of the “growth” experienced in our GDP was from an increase in residential construction. That’s right, while the housing market is jammed up with inventory worse than the sea of cars that is rush hour on the 405 freeway, we had the largest quarterly increase since 1986 in residential construction. Peter Schiff was interviewed this week on CNBC and he stated that the government has basically two options. The first is to continue the cheapening of the dollar (which, in that case, we would recommend that you buy gold as the metal has historically moved higher as the dollar has retreated). The other option the government has is to raise interest rates which would “bring on a much more severe recession than anything we’ve experienced so far.”

Is the US Government intentionally creating inflation? One French official thinks so. He also happens to be a top financial adviser to French President Nicolas Sarkozy. Henri Guaino essentially told reporters this week that the US is trying to get out of their debts by “flooding the world with liquidity.”

If the government is planning to devalue the dollar (which, their actions suggest they are already doing), it is not something they will tell us in advance on the evening news.

Yet daily we are seeing more and more signs that the US is heading into a currency crisis. First the talks of China, Russia and oil countries plan to move away from the dollar to a basket of currencies, and now it looks like some Latin American countries are actually doing just that. Nine left-leaning nations – Dominica, Venezuela, Ecuador, Nicaragua, Honduras, Saint Vincent, Antigua, Bolivia and Barbuda – are officially switching their trading currency to the Sucre, which will be rolled out in 2010. This action echoes the European Union’s move to the Euro, and merely solidifies the worries most other nations have about the dollar’s strength. What could happen to the US in a currency crisis?

A Case Study in Hyperinflation: the Weimar Republic, Germany in the 1920s

After World War I, Germany was saddled with massive debts as the cease fire treaty signed held Germany responsible for the entire war. Kind of like when someone loses on Judge Judy and they have to pay the other person’s court fees. Then England issued the “London Ultimatum,” which totaled Germany’s debts at 269 billion gold marks (about $393.6 Billion 2005 US Dollars). It was estimated that it would take all the way until 1984 for Germany to pay off all that debt. And no foreign investors had any interest in buying German’s government bonds as the nation was a bit of pariah after the war. The only way they could pay the debt off was to print more money! In the first half of 1921, 60 German marks were worth 1 US Dollar. By November of that same year, 330 German marks were worth 1 US Dollar. Eventually, the inflationary index went from one to 726 billion. Need to buy a loaf of bread? Too bad, your entire life savings wouldn’t be able to cover it. Trying to leave the country and exchange your money for something else? Tough luck, it’s practically worthless. But you wouldn’t have had a problem trading gold for other currencies.

What is the US national debt right now? Check out the US National Debt Clock which gives the outstanding debt by the minute. As of this moment, the current debt is $11,900,391,120,818.06. The site points out that “the estimated population of the US is 307,154,816. So each citizen’s share of this debt is $38,743.95.”

Scary hyperinflation scenarios have happened to many nations. It’s even happened in the US a couple of times. Those who have been able to prepare have been able to ride out the storm. Gold can protect American from hyperinflation just as it protected citizens of Weirmar Germany in the 1920s, Mexicans in the 1990s, the Vietnamese in the 1970s, and millions of others who have been at the mercy of irresponsible government policies. As, Charles DeGaulle, another famous French leader once stated:

“Indeed, there can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence.”

A worried Alan Greenspan

Today, Alan Greenspan, former Federal Reserve Chairman, warns about the “progressively explosive” US Budget Deficit of $1.4 trillion. National debt keeps rising, as if policy makers feel they can avert a financial crisis by following it with a debt crisis. The US was once the world’s greatest creditor nation and now it is the world’s biggest debtor nation. An economy running on its own debt is not sustainable, and years ago Greenspan warned Congress, “These trends cannot extend to infinity.” Should a currency crisis occur, one way the average American can prepare is to invest in gold bullion. Gold’s power to store wealth has been tested throughout history’s minor and major currency crises.