1. When the Fed expands the money supply by buying up commercial paper, the increased supply of money is offset by obligations to pay the Fed back. (The federal government also has such an obligation on paper, but since the federal government owns the Fed, it matters not.)

2. The dollar is still backed up by trillions in mortgage obligations. Some of those obligations become more potent if we get some inflation as the borrowers become less likely to default.

Mortgage and other debt obligations back up a currency just as taxing authority and gold reserves do. Now, if a government inflates the currency aggressively enough to make all those fixed rate mortgages worthless to the lenders, then expect a bifurcation and possible hyperinflation.

Ditto for Detroit.

And a host of others.

As for oil, no worries: The Barnett Shale here in North Texas has an estimated 25 to 50 TCF (trillion cubic feet) of natural gas. Then there are the other massive shale gas plays like the Haynesville and Marcellus shales. You will not have to worry about freezing in the winter, though you will pay much more for gas since the price is set on the world market.

Also, the United States is known as the “Saudi Arabia of coal.” It has an estimated 400+ years of coal at current rates of consumption. And as Ilana can tell you, oil can be derived from coal.

The real thing to worry about is a massive outbreak of violent crime and ethnic strife on a scale that would make Yugoslavia look tame.

There is no place to run to in a Balkanized US.

Now do you know why gun control is uppermost in the minds of the current elites?

Seriously, our whole economy, including agriculture, runs on petroleum. We import about two thirds of the petroleum we use, and pay for it with a fiat currency that owes it value solely to the Tinkerbell Effect. If the Obammunists were to inflate the money supply to such an extent that our foreign suppliers lost their faith in Tinkerbell, then America would develop a striking resemblance to Zimbabwe.

What do you think politicians would do with the information if they happen to stumble across Murray Rothbard’s America’s Great Depression or the essay Austrian Theory of the Trade Cycle?

You’d think he knew exactly what he was doing.