Can this happen to the U.S. dollar?
The good news is that the U.S. dollar has a large circulation base. The U.S. dollar M2 money supply is roughly $10 trillion.
That sounds really large until you consider the U.S. national debt is, all by itself, $16 trillion. In just four more years, by 2016, that debt will almost certainly reach $22 trillion.
On top of all this, if the Fed is printing $85 billion a month, it adds another trillion dollars to the monetary base each year. Effectively, this means the Fed will be expanding the money supply by 10% annually, from day one. Except it doesn't end there, of course. In just a few months, the $85 billion a month will need to be increased to $200 billion a month. Then $500 billion a month. And before you know it, the Fed is creating one trillion dollars a month in a grand, final blowout of the U.S. dollar.
QE3 becomes the "infinite bailout" strategy of the Fed. But there's a problem in all this: Infinite money creation means infinite devaluation. As the money supply expands, the value of the dollars currently in circulation (physically or electronically) approaches ZERO. Such is the curse of mathematics and the laws of economics.
A global debt dump is inevitable
The final phase of all this will be radically accelerated, of course, by the dumping of U.S. government debt by other central banks in China, Japan and elsewhere. When they see the writing on the wall, they'll stage a selloff. The selloff will send shockwaves throughout the financial sector, causing investors to flee the dollar and ultimately resulting in the Fed creating even more fiat currency to buy back U.S. debt in a last-ditch effort to prevent a national bankruptcy.
This is the point where you get into Zimbabwe territory ... where the government is forced to issue "new dollars" with a trade-in value of 1,000,000 to 1, and where the Fed becomes the last buyer of U.S. debt because nobody else will touch it. This is a lot like getting a cash advance on your credit card in order to make your minimum monthly payment. The debt accumulates as crushing compound interest, and there is no escape from the inevitable default.
This day is coming for America and the U.S. dollar.
Timing? Still unknown
The timing on all this is, of course, an unknown. Some of the more outspoken critics of Fed financial policy believe we're going to see a financial meltdown before the end of April 2013. Others think it may take several years longer. A few observers say we'll be lucky to make it to Christmas.
Personally, I'm always amazed at how long corrupt institutions can prop up their monetary scams, so I tend to think a full-blown meltdown might require years to take place. But the banking debt crisis is likely to happen much sooner, potentially even this year (after the election). That's not an official prediction, however; it's just a cautious warning to be safe rather than sorry. Historically, my own predictions tend to be 1-3 years too early. I began warning about the dot-com bubble in 1998, for example, and it didn't burst until 2001. I began warning about the housing bubble a year or two before it collapsed.
Because remember, the value of the currency you hold can be stolen from you even if the physical paper money is not. This swindle has been repeated countless times throughout human history, always by corrupt central bankers and government conspirators. Time after time, the People get scammed, and time after time, most of them can't even figure out who stole the money. That's the evil genius of the entire plan: Currency creation is invisible theft. With every new dollar they create, they effectively steal one dollar's worth of purchasing power from those who hold the currency.
In essence, then, the Federal Reserve has announced its plan to steal $85 billion a month from those who hold U.S. dollars... with no limit to the number of months this theft will continue.