The theory here is, because the United States currency is heavily based on debt, once the the psychology of the US Dollar being a standard currency is broken, there will be heavy selling of the US Dollar as its true value equalises with the other currencies, and hyperinflation will result, interest rates will rise, the US government if it can sell more treasuries and bonds will have to pay much higher interest rates, further pushing the US into debt, a vicious cycle of doom. The worst case scenario is collapse of the economy, as Bhairitu mentioned, with a 'Road Warrior' scenario, paramilitary groups and warlords roaming the devastated country.
Since no country seems to be on a gold standard any more, how serious this can be depends on how the other currencies stabilise against the US Dollar. As one economic advisor puts it: 'Economic reality versus illusion: There will be no recovery, just plunge, stagnation and renewed plunge, re-intensifying the downturn already underway. The confluence of negative surprises, including new business and systemic woes, should hit US Dollar and spike inflation with hyperinflation to intensify the unfolding of a depression.' http://goldsilverworlds.com/wp-content/uploads/2012/07/US_dollar_purchasing_power_vs_gold_1774-2012.gif http://goldsilverworlds.com/wp-content/uploads/2012/07/US_dollar_purchasing_power_vs_gold_1774-2012.gif If you follow the news, and the news reports heavy selling of the US Dollar by other countries and investors in general, this is probably how the scenario will begin to play out.
