Deflation? Hyperinflation? What Do I Do?

I completely adore tuning into talk radio stations. It’s hucksterism at its most entertaining – the promoting of fear is palpable and the line in between content and commerical is so blurry I can’t tell if the host is on an economic rant or attempting to sell me on a gold broker.

Regardless of whether you think this kind of talk display hosts are the scourge of the earth or a vital supply of talking reality to energy (I’m not in both camp, really), there is one reality that you can get away from all of it: no one knows for sure what’s heading to occur subsequent in terms of the economic system.

One can make a reasoned, rational situation that we’re on the verge of a golden age because of emerging technological advances and the opening of new markets. One can make a reasoned, rational situation that we’re on the verge of economic collapse that will arrive in the type of a deflationary spiral (decrease prices lead to decrease production which leads to fewer jobs which leads to decrease prices…). One can make a reasoned, rational situation that we’re on the verge of economic collapse that will arrive in the type of hyperinflation (prices escalating, the dollar dropping compared to other world currencies, etc.).

We just don’t know.

If you think a boom time is coming, it probably makes sense to invest in stocks, particularly in technology and in emerging markets. Invest in issues that will grow like crazy when issues start to get off.

If you think deflation is coming, it probably makes sense to start hoarding money, because every dollar will improve in value. Purchase CDs and maintain your cash in the highest-yield savings accounts you can find.

If you think hyperinflation ...