Minyan Sam: Since I can't afford to move out of the country, what can I do to protect myself? I retired at the end of 2007, so I'm trying to protect what I have. My home is paid for and I have no other debt, but I am concerned that these thieves in charge of our country will end up destroying everything I've worked for. I worked for an hourly wage all my life so I'm not wealthy, but have managed to save some money and at the present time I don't need to access it to pay my living expenses. Any general suggestions on what direction to go would be appreciated.

Mr. Practical: You are a real person in a real country, so you can't do what I do. Your flexibility is poor, which reality limits what you can do. My moving around is just meant to show by example how central banks dilute wealth over time by devaluing currencies. When you pay off debt you in a sense get long the dollar; this is why I recommended paying off debt before this thing got started. Strangely, at the right time (impossible to predict), one could take out as much debt as one can afford and buy raw property right before a hyperinflation occurs in the next few years (huge devaluation of dollar). I am not recommending trying this (I wrote about this before), because the timing and risk are huge if wrong.

Minyan John: I understand why you moved to “Yenville” as a wealth-preservation [play]. When Scrooge finally decides to help Tiny Tim get better by way of debt monetization (inflation), debasement plays out down the road. Do you see certain sectors participating, while others stay sidelined? I ask because I remember the Hunt brothers and the last blow-off of gold and silver - only to see periods of inflation and the precious pups slowly recede in value like a drained pond as the hoarding turned to expulsion. Any thoughts on this?

Mr. Practical: Gold will be a great buy in the $600s if it gets there. Certain stocks able to weather severe recession are very cheap, certain names beaten down by liquidation forces. But again, the first thing to do is pay off the mortgage. That's the best investment you can make.

Minyan Marion: You comment that "Gold will be a great buy in the $600s if it gets there" and then a few sentences later state "…the first thing to do is pay off the mortgage. That's the best investment you can make." These two strategies appear to be at odds with each other.
Buying gold makes sense if you have inflationary expectations, while paying off the mortgage is good recession strategy. If buying gold as an inflation hedge, why would you pay off a low-cost fixed-rate mortgage which would look pretty cheap in an inflationary environment?

Of course, if you're a market timer, I guess you could pay off the mortgage now (gaining a risk-free after-tax rate of return better than current treasury rates), and refinance (pulling out max equity) at fixed rates just before rates shoot up again and invest it in gold.

Mr. Practical: They are. Pay off your mortgage now, as over the next year deflation forces will be powerful (my opinion only). This (a) reduces risk, (b) is the best investment you can make in a deflationary environment and (c) is like going long the dollar as it strengthens in deflation. But at some point the deflation process will lead central banks to panic and monetize. This is when the dollar gets really devalued and then you want to be short the dollar. At this point, if gold is down in the $600s, it is a hedge against this (reversal of dollar down). Again, timing is hard and risky and that's why I am reluctant to even talk about this. So I just say to people, "Lower risk and buy a little gold if it goes down".