I am neither and an economist nor a financier, but I intuitively know one can not spend more than one takes in forever. This principle applies to households, corporations or governments. Yet governments have been spending more than their revenues for years.

We are seeing the results of this reckless spending in Greece, Spain, Italy, and elsewhere. Much of Europe is on the verge of financial collapse. The chickens of over spending and over-promising in the future are coming home to roost.

The U.S. is borrowing 40c of each dollar it spends. The national debt is approaching 16 trillion dollars, and there is no end in sight for the insane spending and growth of government. When there is no one to buy the bonds issued to cover the new debt, the Federal Reserve steps in to buy it and prints the dollars from thin air to do so.

Whenever a member of the government proposes even a small cut in the rate of growth of spending he is demagogued off the floor of congress. Taxes are already so high that politicians are afraid to raise them any more. Some call for taxing millionaires and billionaires, but these taxes would amount to .01% of the annual budget.

Clearly a disaster is in the making. The only way the national debt can be “paid” is by inflating it away.

The Consumer Price Index (CPI) is a measure of inflation used by the U.S. government. Over the last few years it has been showing 2-3% annual price increase. But anyone who has bought groceries, gasoline, clothing or most anything else can see prices are up far in excess of 2-3%.

The reason the CPI is so low is it counts the cost of housing at 41% of the basket of products used to measure inflation. Housing prices have been falling for the past several years, thus keeping the CPI low. Once housing prices hit their bottom and stop falling, inflation will quickly rise to 10-15%, if not more.

Many investors see the coming melt-down in the dollar. Inflation hedges such as gold, oil, copper, and silver have doubled or tripled over the last few years.

In other countries there is evidence that people see the inevitable decline in their currencies. In Brixton, England, they have issued the “Brixton Pound.” Its value is the same as the British pound and is said to be issued as a trade stimulator. But why is it necessary? Why not use officially issued pounds?

In Bavaria the “Chiemgauer” is in use instead of, or along side of, the Euro. There are similar schemes popping up all over the world including the U.S. and Canada.

In other places something called “time banks” are springing up where labor hours are traded. This is similar to outright barter, but is constructed in such a way as to avoid taxes, as are all of the pseudo-currencies mentioned above.

What can the average person do to protect himself from the inevitable decline or collapse of his currency? I am not an investment advisor, and the list of bad investments I’ve made over my lifetime far exceeds the number of good. But I lived through the inflationary period of the 1970s, and can remember what worked then.

In the 1970s housing was the great protection against inflation. Today things are different as housing prices are in decline. Still, there are savvy real estate investors who are starting to buy houses in areas where the prices have started to stabilize if they can pick them up at greatly distressed prices.

Commodities, such as gold, oil, and the others mentioned above have always been good inflation hedges. You can buy oil or mining stocks if you don’ want to build a storage tank in your back yard.

Rare coins, art, and antiques behave well during inflationary times, but there is a big caveat here. You must know what you’re buying. If you know less about the item you want to purchase that the dealer you are buying it from, you will surely overpay.

There are other things you can do to protect yourself from inflation. But this is not a financial advice column. Study hard, and make sound decisions. You will be rewarded and you will make money while protecting yourself from an increasingly worthless currency.

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