I also disagree w/your can’t kill water comment. We’re all on a course of drinking treated “waste” water…it’s just a matter of time. I’m sure the folks in the Western US will be the first to feel the pain. I watched a great show last week, but couldn’t find a link or remember the channel (God knows I tried!!)…so here are some other bits of info for those concerned about conversation & the availability of fresh water.

The first link is a quick video tour of a wastewater treatment plant (yum!):

http://dsc.discovery.com/videos/news-whats-down-the-drain.html

Here’s a link for conserving water around the house:

http://video.nationalgeographic.com/video/player/environment/going-green-environment/green-home-makeover/conserve-water-greenguide.html Personally, I like to use our dehumidifier’s water to water our plants, rather than the bucket of water from the tub idea (since I’m a shower-girl), tho’ their idea was a good one, too. However, I’d use it to wash the floor instead of watering the plants…

Although the article in this link is lengthy, I found it very interesting and it certainly makes a strong case for conserving water:

http://environment.nationalgeographic.com/environment/habitats/water-pressure.html

And that wraps up my public service announcements!

I’d exchange a mini-bottle of liquor for a loaf of bread. There are some online sites that sell gold flakes/dust and silver coins for use as barter-survival money too.

Check out the Zimbabwe $100 TRILLION dollar bill:

http://butnowyouknow.files.wordpress.com/2009/07/zimbabwe_100_trillion_2009_obverse.jpg

You can go on ebay and “buy it now”: 100 of them for $16.99 — lol

To address some of the commenters, a while back someone on the Forbes website suggested liquor mini-bottles as a store of value and exchange medium. Small, storable, and desireable to a large segment of the population. The only downside is that you might consume it before you need it.

In terms of real collapse and starvation – sure you could sell a fair amount of physical gold (not funds) for maybe a sack of potatoes. I grew up in St Petersburg, Russia (former Leningrad), and I read and heard from older generations about how during the blocade during the Second World War when the city was surrounded and had no lasting supplies of food, people were exchanging some expensive gold watches and jewelry for a loaf of bread or a sack of potatoes on the black market. But other items – expensive china, cloth, etc., were doing about as well. So if you expect a starvation and a total collapse, maybe you should buy a farm and guns? Not me, though, I cannot manage a farm and if I had a gun, I’d shoot my own foot I am so clumsy.

In general, any item someone is willing to pay money for even a TV can be sold during periods of hyper inflation.

Assuming we don’t get total collapse and famine and the markets are still operational, I am thinking about commodities (funds, commodity-related stocks e.g. miners, gas and oil company stocks, water stocks, etc.), international stocks and the US multi-national corporations. I own some of those. One reason I am not getting rid of all of my ESPP stock – my employer does well when dollar is low. OK, this is not the main reason, there are other multi-nationals, main reason I have way too much capital gains there to sell it all at once, so I do it a couple hundred shares at a time… Since it is now above its 2007 level, I sure am happy I haven’t moved all of it into index funds.

Oh yes, and as BG said – low fixed interest debt is great. This is why if I still had a mortgage, I’d not rush paying it off; and if I were to decide to upgrade now, I’d take a mortgage instead of paying the difference in cash.

I don’t know though because while the case for inflation is strong, there are some deflationary forces there as well at least in near term. If I’d known for sure I could retire now….

There is no “real” value to it, except for that everyone seems to universally value it. I’m like you, I don’t want to own gold, because I don’t value it, and if I bought gold, it would only be because I’d hope someone else would value it more later. Perhaps I should just start buying things that I personally value, and ignore everyone else…

I don’t necessarily agree with the “conservation of water” — you can’t “kill” water. We just need to make sure we don’t deplete our water supplies faster than they are refilling. Atlanta was running low for a while, and they had to cut back usage — but now that all their lakes / rivers are full again, there is no need to limit water usage there.

The reason I’m against TIPS is that their payouts are based on government reported inflation numbers — which I think are understated. Bonds are horrible: a 30-year T-bill is going at 4.5% — if we have 1970s/80s type inflation, then those bonds would not be a good bet.

I like the land and stock ideas — anything “real” is impervious to what our government wants to do with their currency. Also, a somewhat risky move, would be to load up on low fixed-rate debt — inflation is great if you have a ton a fixed-rate debt.

Land. You buy land.

Inflation is not precisely a tax on everyone (well I suppose it is, but like all taxes it falls heavier on some than others). If your wealth is predominantly measured in dollars, like the balance in a bank account or the dollars in your paycheck, then inflation taxes you directly.

If your wealth is predominantly stuff, then inflation doesn’t directly tax you (although capital gains tax and inheritance tax get you eventually). If you own land and it produces grain, then as dollars get cheap the price of grain goes up. If you own real estate, the price of rent goes up.

It’s not all that coincidental I suppose that the risk of hyperinflation is the response to plummeting property prices. The relationship there is very direct.

Inflation is ultimately better for the ‘big guy’ than the ‘little guy’ since the big guy derives more wealth from tangible stuff and the little guy has only the dollars in the bank and dollars in the paycheck.

Why are stocks a good hedge against inflation (in the long term)? Because they represent fractions of something tangible, something that becomes worth more as dollars get cheap.