Is the US headed toward an economic crisis that could dwarf the Great Depression?

Well, the signs are hard to ignore, and there are many striking similarities between events today and the events that led up to the harshest years during the Great Depression, from banking failures in the thousands and rising unemployment, to the passing of laws and creation of administrative boards later declared unconstitutional.

As reported by the Wall Street Journal, food prices have risen sharply in the past few months, and the food manufacturing and restaurant industries warn that further increases may be unavoidable, despite the risks involved:

"For food executives, how quickly to pass along higher costs presents difficult choices.

Missteps could be costly when the economy remains weak. Many Americans, nervous about high unemployment, have pledged allegiance to their pennies and are willing to trade down on brands, switch supermarkets, opt for Burger King over Applebee's, or stop dining out altogether to save money."

MyBudget360.com also reports on this issue, stating:

"Creative packaging that includes smaller quantities but offers the same price helps delude many Americans into thinking their dollar still has the purchasing power of better days.  This all occurs in a relatively subtle and typically hidden process.

Cotton for example is now up 90 percent for the year.  Corn is up over 40 percent.  It would be one thing if this was all based purely on demand but more of this increase in price is coming from the Federal Reserve pursuing actions that are punishing the U.S. Dollar.

... We also need to remember that the working and middle class feel much poorer because even if wages remain stagnant, the cost of daily goods and items has steadily increased.  Part of this doesn't show up in the consumer price index (CPI) because of the large dominance of "owner's equivalent of rent" which has held the index lower for a good time now."

Below is a graph showing the consumer price index (CPI) for various sectors. As you can see, silver and gold have risen by nearly 66 percent and 29 percent respectively -- a clear indication that the dollar is losing value:

The real danger here, from a public health perspective, is that people may opt to maintain, or revert back to, health-harming diets in an effort to pinch pennies -- not realizing the ultimate cost of this strategy.

Research has already shown that a single meal can start causing damage to your health, and as the documentary Super Size Me so clearly illustrates, a fast food diet is a prescription for staggeringly rapid health deterioration.

Food prices are now rising faster than overall inflation. According to the Wall Street Journal:

"The consumer price index for all items minus food and energy rose 0.8% over the year to September, the lowest 12-month increase since March 1961, the Bureau of Labor Statistics said.

The food index rose 1.4%, however. The U.S. Agricultural Department is predicting overall food inflation of about 2% to 3% next year."

This could have dire health consequences for many, unless you quickly learn how to shop for healthful food on a budget.

What's Driving Food Price Hikes?

Prices for food, gas and heating oil have risen by double digits since last year, and as you probably know, oil prices and food prices are intricately linked.

The primary reason for this is pure and simple and by design. This is precisely what the US Federal Reserve wanted.  Their desire was to create inflation, so they proceeded to print not billions, but trillions, of dollars out of thin air..  

So it's no major surprise that this would lead to a devaluation of the dollar and increase prices for most  commodities, including food.

The Wall Street Journal, states another variable for the price hike is the growing demand for meat in China, India and other emerging markets. Other factors cited include drought in Russia and crop failures around the world.

One issue not mentioned, however, is how the use of genetically modified (GM) crops may also be playing a significant role in this situation.

It's been repeatedly shown that GM crops are failing across the world, and are raising overall costs. Genetically modified (GM) seeds are far more expensive for the farmer, and also need far greater amounts of petroleum-based pesticides. They also require ever higher amounts of herbicides to address the increasing prevalence of resistant "super-weeds".

So sure, increased commercial meat production requires more grains for feed, and as GM crops (which are the primary types of grains used for cattle feed) fail, grain prices go up.

Part of the answer is, quite simply, to return to organic farming practices, which have been shown to be superior to non-organic farming both in terms of yields and environmental sustainability.

On an individual level, the primary way to help accomplish this shift is by supporting your local farmers and growers.

Is U.S. Headed toward Hyperinflation?

Many are still under the impression that the United States is an economic superpower, but according to the Legatum Institute's 2010 Prosperity Index, the U.S. economy ranks only 14th worldwide. And in terms of overall prosperity, wealth and well-being of the people, the US ranks number 10 on the list, behind several Scandinavian countries, Canada, New Zealand, the Netherlands and others.

It's time to quit fooling yourself. Holding on to an outdated vision of where this country really stands in terms of being "super" anything is counterproductive and will only delay the reorganizing and rebuilding that needs to take place. It is important to avoid being in denial about this fact so you can make the best proactive choices for you and your family.

The US fiscal debt is well over 100 percent of gross domestic product (GDP); the fiscal deficit is close to 10 percent of the GDP annually; and our health care, before the new health care plan, is already the most expensive in the world, yet produces abysmal health results.

Clearly, we're in an unsustainable situation in more ways than one.

But is hyperinflation inevitable?

As its name suggests, hyperinflation is inflation that spirals out of control, generally at a rate greater than 50 percent a month. What this means, according to the Library of Economics and Liberty, is that a cup of coffee or newspaper or any item that cost you $1 on January 1 would cost you $130 one year later.

This happens when monetary and fiscal authorities start printing more money to pay for government expenditures, and this, as you well know, has become the norm rather than the exception these days.

As I discussed in my recent article on hyperinflation, the US is clearly headed for some serious problems as a result of the Federal Reserve printing trillions of dollars out of thin air.

The US Federal Reserve board recently created yet another $900 billion out of nothing to purchase stocks and bonds in Quantitative Easing 2 (QE2).  This boosted the stock market to a two year high and US newspapers trumpeted this fake market boost as being "great," and implied that the US was recovering from the depression -- despite the fact that the US dollar is crashing!

This is the kind of Pollyanna reporting that threatens the very foundation of the US at this point. Unless we begin to address these schemes for what they are, our chances of financial recovery are slim indeed.

Business Insider recently wrote:

"Bill Gross, the manager of the largest mutual fund in the entire world, said...  he believes that more quantitative easing could result in a decline of the U.S. dollar of up to 20 percent.

... Tens of millions of Americans have worked incredibly hard to save up a little bit of money...  Well, inflation is like a hidden tax on all of those savings.  In fact, inflation is a hidden tax on every single dollar that all of us own." 

Blogger Gonzalo Lira paints a compelling picture of what the Federal Reserve's QE2 will do for the bottom 80 percent of the American people, and it's not pretty.

"Any household spending more than two-thirds of their after-tax income on food, housing, clothing and transportation will suffer an immediate, negative impact from the Fed's efforts at induced inflation," Lira writes.

"So 60% of the U.S. population will suffer an immediate effect of rising prices—the stated policy goal of Ben Bernanke's QE2... If unemployment continues to rise, then that bottom 60% would begin to grow into the bottom 70% or 80%—maybe even hit the top quintile as well."

Worse yet, a number of signs indicate that the financial collapse that set off this downward spiral was far from accidental.

In a recent review of a new documentary called "Inside Job," written and directed by Charles Ferguson, Alternet.org writes:

"… "After watching Charles Ferguson's powerhouse documentary about the global economic crisis, you will more than understand what went down -- you will be thunderstruck and boiling with rage."

Ferguson makes the case that the meltdown wasn't just an unfortunate accident -- it was totally avoidable.

Through interviews with financial experts such as International Monetary Fund chief Dominique Strauss-Kahn, French Minister of Finance Christine Lagarde, and former New York governor Eliot Spitzer, and detailed explanations of credit default swaps and derivatives, Ferguson paints a picture of an unethical industry driven by greed, rampant deregulation and an indifferent government."

Another documentary well worth watching is "Meltup," created by the National Inflation Association, which explains why the U.S. economy is now teetering on the edge of a currency crisis that will lead to hyperinflation.

What to Do if Hyperinflation Does Become a Reality

With inflation and the devaluation of the dollar comes higher prices, and Americans will no longer be able to depend on cheap imports and food products from China.

As I mentioned earlier, one major solution to the impending currency crisis, hyperinflation, food shortages and all of the potential related financial hardships is to return back to our roots as a country.

This means supporting the small "mom and pop" shops that get their goods from local suppliers, buying your food from a small local farm, and valuing quality USA-made goods and foods over imports.

Time and again, my readers have informed me that one of the leading obstacles to achieving health is having too limited a budget to maintain a healthy lifestyle...

If events play out as some experts predict, the US economy will face even more challenges and if you are unprepared, your ability to purchase quality food to stay healthy may become even more limited.

That alone is a compelling reason for considering taking some proactive safety measures. Many experts believe a reasonable approach would be to have three months of your income in gold and silver coins in your physical possession. Merely holding gold or silver stocks would be ill advised should the worst case scenario become a reality.

You do have to act quickly though as prices for food and precious metals alike are rapidly climbing.

Many experts are predicting $30 silver and $1600 gold in the not too distant future, and, as reported by the Wall Street Journal, producer costs for essential commodities such as grain, dairy and sugar are rising. Sooner or later those increased costs will be transferred to you, the consumer.

All you need to do is watch the price of gold. When gold rises you can be assured that the US dollar is decreasing and will purchase less food in the future. It is just a matter of time before those prices are reflected in increases at your grocery store.

Avoid Personal Financial Ruin by Staying Healthy!

Most families in the U.S. are already only one bad diagnosis away from a financial catastrophe, and with the looming collapse of the US economy, many more people are at risk of abject ruin should their health fail.

To me this is yet another compelling argument to stay as healthy as you can, by following the recommendations on this site.

It is my strong belief that your body is designed to stay healthy. All you need to do is give it the raw materials like healthy unprocessed food, sleep, exercise, appropriate amounts of sunshine to optimize your vitamin D levels, love, emotional balancing and stay away from toxins and poisons and you won't need to set foot in a doctor's office or hospital, barring an accident.

Even in a healthy economy, it is wise to follow ideal health guidelines, as all the money in the world will not protect you from disease if you fail to follow these guidelines.  However, in this troubled economy, poor health has the potential to ruin you financially -- which will only make everything worse.

In addition to optimizing your health, there are many other reasons for buying local (and preferably organic) foods, including supporting the local economy, building a stronger community, and ensuring future access to healthful food.