Runaway inflation; Marc Faber; porkulus

Click on this CNBC item to see how the porkulus bill could trigger rampant inflation:

The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box."

The risk of inflation is caused by Federal spending and the resulting squeeze on credit markets:

Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned.
"Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.

The predictions I have repeated on this site have an unhappy habit of coming true, so it might be a good idea to do a little preparation.

See previous - April 2007 - the bubble is about to burst.
March 2007 - real estate bubble - equity.
May 2007 - Boomsday