I don't think this is likely to happen (I think it much more likely that we enter a 30 year period of malaise, Japan-style), but it is possible, and a prudent person would want to hedge risks against it.
Events:
1. December 2012. Congress freaks out about the "fiscal cliff", and repeals anything that would contribute to it. Taxes are not increased and spending is not cut, indeed it is increased because of continuing high unemployment, increasing the annual deficits to $1.5 trillion/year. The debt ceiling is increased by $2.6 trillion to just under $19 trillion.
2. April 2013. After continually warning Greece that "this time we really mean it", Europe finally refuses to give any more bailouts to Greece and Greece runs out of money. They don't formally exit the Eurozone, but they do start using their own shadow currency informally known as the "Gyro", which are basically counterfeit Euros, backed only by the National Bank of Greece, but the Greeks assert that these are valid and implicitly backed by the other countries. This starts a bank run all over Europe, which is backstopped by the ECB, requiring 600 billion euros in the form of interest-free loans, to stop the flow. Greece is shunned as a pariah country.
3. August 2013. Europeans continue to buy Swiss francs as a safe haven, and the SNB continues to increase its balance sheet at the rate of 50 billion euros/month. The SNB now has over 1 trillion francs on its balance sheet, mostly in the form of euros.
4. October 2013. Spain has a fiscal crisis, and the ECB, not wanting a repeat of the Greek debacle, pumps $1.5 trillion euros into Spanish banks, which in turn, bailout the Spanish government.
5. Summer 2014. A butterfly in the middle of the Amazon in Brazil, flaps its wings, setting off a chain reaction.
6. Despite all the money pumped into Spain, it runs out and it pulls a Greece and also starts printing counterfeit euros, known as "Spyros". There are rumors that all the PIIGS will follow. All the stable European countries exit the Eurozone, starting with Finland. The euro collapses.
7. The SNB, now holding over 1.5 trillion euros, abandons the euro peg. The Swiss franc quickly increases in value compared to the euro, but it is still down over 30% in dollar terms.
8. Investors realize that the franc is no longer a safe haven, and they abandon it, pouring money into the pound, yen and dollar. The Japanese fight the increase in value by pulling a "Swissie", by issuing new yen and selling them for dollars. The Brits follow suit, as do the Chinese, and all the other semi-stable countries in the world.
9. September 2014. All eyes focus on the US, the only safe haven left in the world. Prudent investors should be buying gold, but shun it because it has been decreasing in value against the dollar. A recession starts in the US, caused in part by the strong dollar, and global trade collapses. Unemployment exceeds 10%. The Treasury reaches its debt ceiling yet again. Paul Krugman urges Congress to pass a huge stimulus package, which they do. They authorize a $10 trillion "global stimulus package" authorizing the Treasury to purchase any kind of assets world-wide. The Fed follows up with a companion $10 trillion quantitative easing package to soak up the new bonds the Treasury issues. The financiers congratulate themselves that they have saved the planet yet again. The national debt exceeds 200% of GDP.
10. A flood of new dollars rushes around the globe looking for hot investments. The stock market soars and the bond markets collapse and yields soar. Unemployment however remains stubbornly high.
11. October 28, 2015. The Japanese stock market crashes, follows by the UK and the NYSE. Investors panic, and lose faith in the dollar. Gold soars as do interest rates and inflation.
12. December 31, 2015. Central banks worldwide lose any pretense to fiscal sanity and print electronic money like crazy to cover their bills. Hyperinflation has arrived.
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Update: This is based on 3 psychological stereotypes.
First, the "problem child" (juvenile delinquent or drug addict). [Greece and Spain]. How do you deal with someone (or a country) like this? Do you enable them or do you confront them? If you enable them, you hope that the situation gets better on its own, but what if it doesn't? If you show "tough love", what if they flip out?
I don't have the answer, but consider walking away, slowly. Greece should be kicked out of the Eurozone, but with assistance. The same with Spain.
Second, the passive-aggressive "elder brother". [Switzerland, Japan]. This is someone who pretends to help, but ultimately has his own agenda and will turn on you and who contributes to the problem. Think of a check cashing place that will give you some quick cash, but then charge 200% interest. To this person you should just say, no thanks. They are not the source of the problem, but they do not help solve it either.
I don't know how you can turn a helping hand away, but be aware that it will ultimately disappear just when you need it most, so don't depend on it. Europe needs to have a conversation with Switzerland about what their ultimate intention is. They either need to join the Eurozone, or stop the currency manipulation.
Third, the "failed savior". So you have the addicts and those who pretend to help but don't, and this condition spreads until there is only one person left. (Obi Wan Kenobi, you're my only hope). This person will always let you down, unless it is Jesus. If the world ever gets in the situation where it is solely dependent on the US of A, we are doomed.
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