What will hyperinflation mean for us when it arrives in the United States? We look to Chile under the Allende government for answers.

The piper must be paid. Unchecked printing of money and record-setting deficit spending can't continue. In fact, they represent a bubble of sorts, not unlike the housing bubble or the tech boom.

The Democrat-led government's rapacious cycle of tax, borrow and spend will end, come hell or high water, in the not-too-distant future. And how will this inevitable crash begin? What will happen when the value of the dollar plummets to zero, as it must as surely as gravity pulls a thrown baseball back to Earth?

Gonzalo Lira's family lived through a similar economic meltdown in the early 1970's, precipitated by the election of Salvador Allende in Chile. His election was a fluke, as two opposing parties split the centrist and right-wing blocs, leaving Allende with slightly more than a third of the electorate.

He became the first "democratically elected Marxist to become president of a country in the Americas" and he aggressively moved to implement "reforms", which were intended to "put Chile on the road to Socialism".

Companies were nationalized, land was confiscated, and mines were taken over by the government, all in the name of wealth redistribution. Ostensibly these industries and properties were now owned by "the workers". In reality, of course, Allende's friends and supporters were placed in powerful oversight roles within the government and in the companies themselves.

Allende saw himself as a 'Supreme Leader' -- a South American Lenin, if you will -- and he acted with dictatorial control over every aspect of the economy. Possibly his most important directives were those that implemented wage and price controls. These populist efforts were designed to curry favor with the workers in two ways:

• The price of basic goods and services were frozen

• Workers' wages were increased by decree

For a brief period of time the population enjoyed the bonanza. Citizens had more money and prices were held artificially low. Of course, like all central planning exercises, the effort ended in disaster.

Soon retailers and warehouses had been emptied of goods as the consumer base used its new-found wealth to go on a massive shopping spree. Once stores had been emptied, Allende immediately blamed right-wing, anti-Marxist "hoarders" for the failures of his policies.

The economic meltdown was also hastened by the demise of most private sector companies. After all, Allende had forced them to raise wages while constricting their ability to properly price their wares. As companies declared bankruptcy, Allende's government quickly nationalized them "in the name of the people."

If the companies continued to operate at a loss, which most did, the government supported them by printing money to make up the shortfall.

And this is how Chile's hyperinflation began. There was no shortage of cash, but it quickly became worthless, because goods and services had disappeared.

Allende was soon forced to implement rationing. As expected, his party loyalists controlled how ration cards were issued, and these cards determined who could buy consumer goods and food stables. Those deemed unfriendly to Allende did not find ration cards forthcoming, especially if they were vocal in opposing the Marxist government.

As it always does, a free market -- in the form of a black market -- quickly constructed itself to address the inequities. But the shadow markets were more finicky about the currency they accepted: Sólo dólares ("Dollars only").

It was at this point that hyperinflation truly began.

It manifested itself in the form of a "collapse in asset prices"; in other words, deflation hit assets while hyperinflation took place for the absolutely necessary items in life.

The reason was simple: basic necessities like food were increasingly unaffordable. Stock prices, cars, second homes, and other "nice to have" items were immediately sacrificed in order to address the most critical needs.

And so it was in 1972 through 1973 that the Chilean stock market collapsed, the housing market tanked and the price of used automobiles plummeted. Citizens had to cash out of their assets to survive and some simply bought their way out of the country altogether.

A military coup soon toppled Allende and his Marxist government. With it, free market reforms and a new currency regime were implemented. After years of excruciating Marxist failures, Chile slowly began to heal itself.

But the lessons remain for us, here in America, as we watch our own Cloward-Piven government tiptoe to the edge of the Allende experiment.