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Today, the United States wakes up at 2, smokes a joint, goes shopping for designer clothes (made in Italy), and yells at the cashier when he or she finds out the card's limit has been exceeded. In the 1940s -- even adjusted for inflation, GDP, and population growth, the U.S. wasn't printing money anywhere near current levels. Listen, if we go to 1.6% (or lower) on the 10-year Treasury, it will be because Jesus is back, and he's buying the long end of the yield curve.

Today, the United States wakes up at 2, smokes a joint, goes shopping for designer clothes (made in Italy), and yells at the cashier when he or she finds out the card's limit has been exceeded. In the 1940s, the Internet didn't exist, which made it a whole lot easier to keep people from knowing that 10-year Treasuries were overvalued. In the 1940s -- even adjusted for inflation, GDP, and population growth, the U.S. wasn't printing money anywhere near current levels.

Disclosure: Long gold and silver via GLD and SLV. That 4.7% return on today's long bond would look pretty darn good if deflation hit the USA hard over the next decade or so. The Bottom Line: The bond market pretty much screamed inflation as they become increasingly more concerned about our trillion dollar deficits.

Even independent oil and gas companies like Anadarko ( APC ) , Devon Energy ( DVN ) , or Pioneer Natural Resources ( PXD ) leave much to be desired in the yield category. Worldwide consumption is forecast to rise nearly +2% to 86.2 million barrels a day in 2010, according to a monthly report from the International Energy Agency. The massive increase in debt issued by the U.S. government has raised the specter of inflation, which could continue to put upward pressure on commodities like gold and oil.

Short treasuries via TBT. That 4.7% return on today's long bond would look pretty darn good if deflation hit the USA hard over the next decade or so. The Bottom Line: The bond market pretty much screamed inflation as they become increasingly more concerned about our trillion dollar deficits.

Hard Assets Investor submits: By Brad Zigler Real-time Monetary Inflation (last 12-months): 2.1% This week's market activity provided little reason for the Fed to withdraw its accommodation. Nearby NYMEX crude oil rose 1.1 percent to an average price of $79.40; the gold/oil multiple ended slightly higher at 14.2x. The greenback gained more ground against the euro, rising 1.1 percent in interbank dealings; cross rates averaged $1.3588 this week.

For example, MVO Oil Trust ( MVO ) pays a mouth-watering 9% and is expected to grow earnings per share +20% this year -- not too shabby. Worldwide consumption is forecast to rise nearly +2% to 86.2 million barrels a day in 2010, according to a monthly report from the International Energy Agency. The massive increase in debt issued by the U.S. government has raised the specter of inflation, which could continue to put upward pressure on commodities like gold and oil.

Before the crisis, when I was writing at RealMoney.com, I usually encouraged taking the less risky macroeconomic route, suggesting policies that would not increase debt levels. After that, I would rather the Fed allow inflation to raise collateral values and end the home and commercial mortgage crises. From the recent book " This Time is Different ," we know that countries with high debt levels grow more slowly, and defaul more frequently.

Accordingly, if NSA CPI is much different from the 217.05 implied by the current price of the Apr-10 TIPS (and ironically, that level matches the economists' forecasts as well), you can expect that bond to move rather sharply. This January number has special implications for the TIPS market. The April 2010 TIPS bond, which matures April 15th with a notional amount tied to an interpolation between the January and February CPI figures, will see half of the uncertainty go away when the Jan print is under our belts.

That 4.7% return on today's long bond would look pretty darn good if deflation hit the USA hard over the next decade or so. The Bottom Line: The bond market pretty much screamed inflation as they become increasingly more concerned about our trillion dollar deficits. In my opinion, the increasing concerns around the sovereign debt issues in Portugal, Spain, and Greece has made the bond market even more jittery.

After seeing the debacle 1999-2002 in CDOs, most insurers swore off CDOs - aside from AIG ( AIG ). You can't make them pay; the only big penalty is getting shut out of the bond market - which means that in the future, their budget would have to be balanced on a cash basis. Now one could just print their way out of the situation, and hand fresh currency to creditors - but at a cost of high interest rates and inflation, which could crush economic activity in real terms.

Hard Assets Investor submits: By Brad Zigler Real-time Monetary Inflation (last 12-months): 2.1% This week's market activity provided little reason for the Fed to withdraw its accommodation. Nearby NYMEX crude oil rose 1.1 percent to an average price of $79.40; the gold/oil multiple ended slightly higher at 14.2x. The greenback gained more ground against the euro, rising 1.1 percent in interbank dealings; cross rates averaged $1.3588 this week.

Mauldin and many others make the assumption that hyperinflation can't occur without some kind of economic demand. It is the mainstream theory that money has to make its way into the economy (via bank lending and then business investment or consumption) for price inflation to occur. click to enlarge As we close, it is important to note that Precious Metals and the shares outperform during times of credit stress.

On the corporate front, British oil giant BP Plc ( BP ) will pay $7 billion Oklahoma's Devon Energy Corp.'s ( DVN ) assets in Brazil, the Gulf of Mexico, and Azerbaijan. Brent crude is down slightly in early morning trade Thursday, as worries about inflation in China increased concerns about global economic growth prospects. China's National Bureau of Statistics reported that inflationary pressure reached a 16-month high, as consumer prices rose 2.7% in February from a year ago, slightly above what most Wall Street analysts had been expecting.

Dumping TIPS in favor of Treasuries (which would be selling breakevens) is the theoretically correct move if your expectations of inflation have declined; in theory, real yields should be roughly unchanged and nominal bonds should improve so that the spread tightens. No, real yields rose because the knee-jerk response to the inflation data was to dump TIPS. But investors can't help but think of TIPS as having inflation "protection," when a more-accurate statement would be that TIPS are merely neutral on inflation and shouldn't react to changes in inflation expectations.

I'm sure you've noticed that gasoline prices continue to climb across the country. From Exxon ( XOM ) to Sunoco ( SUN ) to BP ( BP ), prices are edging up once more -- about 80 cents higher than at this point in 2009. But experts say prices will stabilize soon and could possibly stay below the $3 a gallon benchmark all spring and into the summer.

With capital inexpensively available to invest, the stock market aggressively rallied following previous major crashes and gave an early warning of the inflating bubbles to come. At the moment few asset classes and business proposals currently pass the tests of risk management and the loan approval departments of banks and venture funds. Chosen correctly, high yielding investment property is a great way to keep up with inflation and provide a steady stream of income for retirees to spend.

April crude oil rose 2 cents to $82.11 a barrel, and the Energy Select Sector SPDR ( XLE ) fell 10 cents to $58.47. Now data confirms that prices for February spiked sharply and that an even tighter monetary policy may be required in order to keep inflation under control. In the absence of heavy volume, the Dow could double-top and head back down to the initial support line represented by the 20- and 50-day moving averages at 10,380 to 10,390.

Alcoa ( AA ) was the Dow's strongest component, up 4.8% due to higher metal prices. With wholesale level inflation in a zone that appears to be under control, the Fed is expected to keep interest rates low, and that encourages investors to place money into more high-risk areas. What the Markets Are Saying Stocks closed higher again yesterday, and even though both the S&P 500 and the Nasdaq have risen 9 of the last 10 trading days, it is a pace that can't be sustained for much longer.

With capital inexpensively available to invest, the stock market aggressively rallied following previous major crashes and gave an early warning of the inflating bubbles to come. At the moment few asset classes and business proposals currently pass the tests of risk management and the loan approval departments of banks and venture funds. Chosen correctly, high yielding investment property is a great way to keep up with inflation and provide a steady stream of income for retirees to spend.

The Energy Select Sector SPDR ( XLE ) gained 63 cents to close at $59.05. With wholesale level inflation in a zone that appears to be under control, the Fed is expected to keep interest rates low, and that encourages investors to place money into more high-risk areas. What the Markets Are Saying Stocks closed higher again yesterday, and even though both the S&P 500 and the Nasdaq have risen 9 of the last 10 trading days, it is a pace that can't be sustained for much longer.

You could buy $1,000 worth of UGA to offset the risk and effectively freezing the net price you will pay for gas over the next 12 months. The United State Gasoline Fund ( UGA ) ETF is one tool that can be used to offset risk of rising gasoline prices. UGA replicates the movements of gasoline futures available in the commodity futures market.

Mauldin and many others make the assumption that hyperinflation can't occur without some kind of economic demand. It is the mainstream theory that money has to make its way into the economy (via bank lending and then business investment or consumption) for price inflation to occur. click to enlarge As we close, it is important to note that Precious Metals and the shares outperform during times of credit stress.

Those include the Schwab U.S. Large-Cap Growth ETF (NYSEArca:SCHG), the Schwab U.S. Large-Cap Value ETF (NYSEArca:SCHV) and the Schwab U.S. Small-Cap ETF (NYSEArca:SCHA). Charles Schwab, the discount broker that entered the exchange-traded fund market less than six months ago, filed with the Securities and Exchange Commission today to offer three U.S. Treasury ETFs, including one designed to protect investors from the ravages of inflation. The index includes all publicly issued U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade and have $250 million or more of outstanding face value.

( ABG ), it has declared a takeover offer for all shares of Tusker Gold Ltd (T66). Gold is on the rise in morning trade, gaining ground as worries about repercussions of the SEC suing Goldman Sachs subsided on the one hand, and expectations of inflation increase on the other. India, which is a major gold buyer, raised interest rates for the second time this month, and that has boosted the allure of the yellow metal as a hedge against inflation.

Jim Kopas submits: Our research indicates the strengthening U.S. economy has recovered to the point when interest rates will begin to move up (bond prices go down) for the duration of the current business cycle expansion. If, as we expect, the secular trends for interest rates are reversing, investors will have to struggle with longer adverse periods of falling bond prices than experienced in the last three decades. A tactic that increases exposure to inflation sensitive investments could include short-term international bonds emphasizing currencies denominated in strong natural resource based countries, such as Canada or Australia.

Even household names like Polaroid fell 64%, Texas Instruments ( TXN ) fell 57% and General Instruments 83%. Shares in his Electronic Data Systems (bought by Hewlett-Packard ( HPQ ) last year) fell $60 that day. First came Apollo 13's near-fatal moon mission (April 11-17), followed by President Nixon's incursion into Cambodia (April 29), the resulting nationwide campus riots and shootings at Kent State (May 4) and Jackson State (May 14), all amidst a recession, overtly engineered by Nixon in 1969 as a way to fight inflation by "cooling the economy."

Jim Kopas submits: Our research indicates the strengthening U.S. economy has recovered to the point when interest rates will begin to move up (bond prices go down) for the duration of the current business cycle expansion. If, as we expect, the secular trends for interest rates are reversing, investors will have to struggle with longer adverse periods of falling bond prices than experienced in the last three decades. A tactic that increases exposure to inflation sensitive investments could include short-term international bonds emphasizing currencies denominated in strong natural resource based countries, such as Canada or Australia.

S&P cut Greece and Portugal yesterday, followed by Spain today, so who's to say Italy and Ireland's ratings won't be on the chopping block tomorrow? I imagine, in the future, that EU member states will crack down earlier and harder on countries that dig themselves too deeply into debt, and the ECB will continue to use inflation as the primary target of its monetary policy. If the contagion takes hold and EU member states, driven by political pressures at home, can't come together, more trouble could be ahead.

S&P cut Greece and Portugal yesterday, followed by Spain today, so who's to say Italy and Ireland's ratings won't be on the chopping block tomorrow? I imagine, in the future, that EU member states will crack down earlier and harder on countries that dig themselves too deeply into debt, and the ECB will continue to use inflation as the primary target of its monetary policy. If the contagion takes hold and EU member states, driven by political pressures at home, can't come together, more trouble could be ahead.

TIPS are U.S. government securities issued by the U.S. Treasury that generate principal and interest payments designed to adjust for and protect against inflation, as measured by the U.S. Consumer Price Index. TIPS ETF, the Schwab Short-Term U.S. Treasury ETF and the Schwab Intermediate-Term U.S. Treasury ETF, according to the filing. The New Funds The TIPS ETF will track the Barclays Capital U.S. Treasury Inflation Protected Securities ( TIPS ) Index, according to the filing.

With TIPS, you receive interest every six months while your principal increases at the rate of inflation, as measured by the Consumer Price Index. A safer bet may be had in TIPS exchange traded funds (ETFs). [ TIPS and ETFs: Your Questions Answered. ]

Conversely, if you think gold has more room to run and large government deficits will inevitably lead to high inflation, then the Market Vectors Gold Miners ETF ( GDX ) might be the play. Or accept higher interest rates on any future bond offerings, which would likely lead to the rising inflation that many gold bugs expect. Unrest in the Korean Peninsula, along with economic concerns in Europe, are pushing up gold prices, decoupling the trade from the long-standing inflation fears.

PowerShares Insured California Muni Bond (NYSEArca: PWZ ) SPDR Barclays Capital California Muni Bond (NYSEArca: CXA ) iShares S&P California Municipal Bond (NYSEArca: CMF ) Max Chen contributed to this article. Despite the fact that after being adjusted for inflation and population growth, it's smaller than ever, California still faces a budget deficit of around $17.9 billion in the current and coming fiscal years. The governor is also castigating the over-generous state employee pensions, which is costing California more than $6 billion this year, or the equivalent of the programs being eliminated.

Vanguard Emerging Markets ETF (NYSEArca: VWO ) and iSharesMSCI Emerging Markets Index ETF (NYSEArca: EEM ) are about 7% below their 200-day moving averages. U.S. investors are forgoing riskier assets like emerging market exchange traded funds (ETFs), and instead are sticking to the "safety" of government bonds and gold. Asset manager GMO calculates that emerging market stocks will earn an annualized after-inflation return of 4.7% over the next seven years.

TIPS Index (NYSEArca: STPZ ) SPDR Gold Shares (NYSEArca: GLD ) United States Oil Fund (NYSEArca: USO ) PowerShares DB Agriculture (NYSEArca: DBA ) For more stories about inflation, visit our inflation category . As recently as three months ago, investors were buzzing about inflation as a result of massive stimulus packages worldwide. Kurt Brouwer at MarketWatch notes that in PIMCO's Secular Outlook report, deflationary forces right now are strong and inflation lies farther down the road.

Sure, it helps the US by driving up appetite for the USD and treasuries, forcing the world to pretend even longer that the US is the only safe harbor during a storm, and delaying inflation pressure. But it'll just as surely put the viability of the global financial system into question again, kill the fragile if real recovery and threatens the prolonged, worldwide deflationary spiral. Regardless, certainty includes countless lawsuits for BP and a higher cost for all deep-sea oil drillers, as well as huge economic and environmental damage to the gulf coast region.

TIPS Index (NYSEArca: STPZ ) SPDR Gold Shares (NYSEArca: GLD ) United States Oil Fund (NYSEArca: USO ) PowerShares DB Agriculture (NYSEArca: DBA ) For more stories about inflation, visit our inflation category . As recently as three months ago, investors were buzzing about inflation as a result of massive stimulus packages worldwide. Kurt Brouwer at MarketWatch notes that in PIMCO's Secular Outlook report, deflationary forces right now are strong and inflation lies farther down the road.

TIPS Index (NYSEArca: STPZ ) SPDR Gold Shares (NYSEArca: GLD ) United States Oil Fund (NYSEArca: USO ) PowerShares DB Agriculture (NYSEArca: DBA ) For more stories about inflation, visit our inflation category . As recently as three months ago, investors were buzzing about inflation as a result of massive stimulus packages worldwide. Kurt Brouwer at MarketWatch notes that in PIMCO's Secular Outlook report, deflationary forces right now are strong and inflation lies farther down the road.

Crude oil for June delivery fell $2.79 to $71.61 a barrel, and the Energy Select Sector SPDR (NYSE: XLE ) fell to $56.24, off $1.14. Nervous investors with lingering concerns over the European Union's $1 trillion bailout of its weakest members drove stocks sharply lower on Friday. Friday's euro selling was mostly blamed on a new report on Spain showing that core inflation for the country had turned negative, which could make it more difficult to work out its debt problems.

HSP stock was spun off from drug stock Abbott Laboratories (NYSE: ABT ) and makes specialty injectable pharmaceuticals (primarily generics) and other drug delivery-related equipment. In fact, I believe the "euro crisis" centered in Greece and China's recent inflationary boom both present more benefits than challenges for investors, at least in the longer term. This recession-proof business hasn't missed a beat in the last year and has recently gained even more momentum due to health care reform measures that would broaden drug coverage.

PowerShares Insured California Muni Bond (NYSEArca: PWZ ) SPDR Barclays Capital California Muni Bond (NYSEArca: CXA ) iShares S&P California Municipal Bond (NYSEArca: CMF ) Max Chen contributed to this article. Despite the fact that after being adjusted for inflation and population growth, it's smaller than ever, California still faces a budget deficit of around $17.9 billion in the current and coming fiscal years. The governor is also castigating the over-generous state employee pensions, which is costing California more than $6 billion this year, or the equivalent of the programs being eliminated.

And the hurricane season is fast approaching. Disclosure: Short [[FAS]] See also Easy Fed, Easy ECB, Strong Gold on seekingalpha.com The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Sure, it helps the US by driving up appetite for the USD and treasuries, forcing the world to pretend even longer that the US is the only safe harbor during a storm, and delaying inflation pressure.

That's where Treasury Inflation-Protected Securities ( TIPS ) exchange traded fund (ETFs) come in handy as a bet against potential rising inflation. Unprecedented government spending, interest rates near zero, and the potential for stagflation - slow growth coupled with high inflation - are just some of the reasons Alexander Green for Investment U recommends TIPS. But TIPs get the added benefit of a higher principal each year by the amount of inflation as measured by the consumer price index ( CPI ).

The game must appear entirely rigged to an unsophisticated investor and the accusations of a system error during yesterday's trade has to make some people wonder why they are putting their hard earned cash at risk of a massive computer glitch. In this continuing period of low aggregate demand, high unemployment and general deflation the government of the U.K. has a great deal of buffer room in which they can spend. This is exactly what will occur in Greece as tax receipts will fall off a cliff and austerity measures will result in decreased aggregate demand and recession.

SPDR S&P China (NYSEArca: GXC ) Claymore/AlphaShares China All-Cap (NYSEArca: YAO ) iShares FTSE/Xinhua China 25 (NYSEArca: FXI ) PowerShares USX Golden Dragon Halter (NYSEArca: PGJ ) Global X China Consumer ETF (NYSEArca: CHIQ ) Max Chen contributed to this article. China has expressed confidence in Europe's economy and debt, giving exchange traded funds (ETFs) a nice bounce today. Food prices have been pushing up China's inflation, which is lending more weight to potentially tighter monetary policies, writes Andrew Peaple for The Wall Street Journal .

TIPS (NYSEArca: STPZ ) Lastly, you can insulate yourself from turbulence by having a trend following strategy with a pre-determined point at which you sell when the markets decline. Direxion Daily 30-Yr Treasury Bear 3x Shares (NYSEArca: TMV ) iShares Lehman 20+ Year Treasury Bond Fund (NYSEArca: TLT ) TIPS . Treasury Inflation-Protected Securities, or TIPS, don't offer much at current levels.

Nabisco by legendary PE firm Kohlberg Kravis Roberts & Co ( KKR ). The largest deal ever done was KKR and Texas Pacific Group's $45 billion buyout of TXU Corp in early 2007 (though interestingly, the Nabisco deal is still the largest LBO in history in inflation-adjusted dollars). The drama and intrigue of the $31.1 billion mega-deal was memorialized in the book and made-for-TV-movie, Barbarians at the Gate , and led Time Magazine to run a cover asking the question, "Has the buyout craze gone too far?"

For example, the ProShares UltraShort Gold ETF( GLL ) bets against gold, rising or falling at twice the rate in the opposite direction of the yellow metal. Or accept higher interest rates on any future bond offerings, which would likely lead to the rising inflation that many gold bugs expect. Unrest in the Korean Peninsula, along with economic concerns in Europe, are pushing up gold prices, decoupling the trade from the long-standing inflation fears.

In an inflationary situation, a TIPS bond ETF will continue to yield interest payments and the principal will increase with the CPI (Consumer Price Index). If the government deals with this problem through inflation (printing money) then the performance of treasury bond ETFs like IEF and TIP will bifurcate. In the ETF family there is a partial solution to the inflation problem: the TIPS bond ETF.

Steve Dew and Oliver Ludwig for Index Universe report that the provider's TIPS ETF will focus on maturities ranging from five to 10 years. TIPS are designed to protect investors from declining purchasing power by adjusting the principal upward based on increases in the U.S. Consumer Price Index. The first fund planned will focus on Treasury Inflation-Protected Securities ( TIPS ).

That could spell further gains for gold mining stocks such as Barrick Gold ( ABX ) , Newmont Mining ( NEM ) and AngloGold Ashanti ( AU ) . Or accept higher interest rates on any future bond offerings, which would likely lead to the rising inflation that many gold bugs expect. Unrest in the Korean Peninsula, along with economic concerns in Europe, are pushing up gold prices, decoupling the trade from the long-standing inflation fears.

SPDR Gold Shares (NYSEArca: GLD ) : Metal markets may look more attractive with higher interest rates. Mary Anne and Pam Aden of MoneyShow.com report that the 30-year T-bond yield crossed the 4.65-4.75 percent mega-trend threshold this month. With higher yields, Mary Anne and Pam warn that: Inflation will start to pick up momentum, making metal markets more attractive.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

The 2008 global equity (NYSEArca: EFA ), real estate (NYSEArca: RWO ) and commodity (NYSEArca: DBC ) meltdown erased an estimated $50 trillion worth of wealth. Deflation Threat - A Simple Concept Government spending and money printing has been identified as key causes for an alleged inflationary environment. The Europe (NYSEArca: FEZ) debt debacle reminds us how vital cash is - that's why the European Central Bank and the IMF made $1 trillion available for entire governments.

The 2008 global equity (NYSEArca: EFA ), real estate (NYSEArca: RWO ) and commodity (NYSEArca: DBC ) meltdown erased an estimated $50 trillion worth of wealth. Deflation Threat - A Simple Concept Government spending and money printing has been identified as key causes for an alleged inflationary environment. The Europe (NYSEArca: FEZ) debt debacle reminds us how vital cash is - that's why the European Central Bank and the IMF made $1 trillion available for entire governments.

Thus, along with taking advantage of current low long-term rates to move the nation's debt out the yield curve, the Treasury should buy back TIPs. Get Rid of TIPs. As of November, 2009, the Treasury had issued $550 Billion worth of Treasury Inflation-Protected bonds, a/k/a "TIPs," perhaps the dumbest idea anyone in government has ever had.

One option is to invest in equities through a fund such as Vanguard Total Stock Market ETF ( VTI ). During the past 10 years, the S&P 500 has lost 8% while gold is up 350%; that trend is clearly not sustainable, particularly when commodities do not generate profit growth or create innovation and their prices tend to be mean reverting. Foreign currency exposure could also be obtained through iShares MSCI EAFE Index ( EFA ), although this would entail the same problem of a lack of a strong relationship between inflation and equity returns mentioned above.

3. iShares Barclays TIPS Bond Fund ( TIP ) vs. All Takers Following the unprecedented injections of liquidity into the global financial system in recent years, inflation has been on the minds of most investors. But most investors still expect prices to head higher at some point in the future, and they're clearly hoping that TIP will protect them from the ravages of inflation. iShares' EEM has historically been the default option for achieving emerging market exposure through ETFs, but VWO's remarkable growth in recent years has positioned the competing Vanguard product as a legitimate threat.

Asset classes from oil (NYSEArca: USO) to small cap stocks (NYSEArca: IWM) and nearly everything in between went south. Deflation Threat - A Simple Concept Government spending and money printing has been identified as key causes for an alleged inflationary environment. The Europe (NYSEArca: FEZ) debt debacle reminds us how vital cash is - that's why the European Central Bank and the IMF made $1 trillion available for entire governments.

The iShares S&P GSCI Commodity Index Trust (NYSEArca: GSG), which tracks a basket of 24 different commodities, is down 14.55 percent year-to-date. SAN DIEGO (ETFguide.com) - Wall Street's ever rosy forecasts for accelerating economic growth aren't coming true. The Federal Reserve also knows that if inflation doesn't rise adequately enough, it could leave them without a valuable tool should the U.S. economy head into a double-dip scenario; the power to ease interest rates.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

Since the April 26 top, the U.S. markets (NYSEArca: VTI ) have lost about $5 trillion of market capitalization. Deflation Threat - A Simple Concept Government spending and money printing has been identified as key causes for an alleged inflationary environment. The Europe (NYSEArca: FEZ) debt debacle reminds us how vital cash is - that's why the European Central Bank and the IMF made $1 trillion available for entire governments.

Calafia Beach Pundit submits: With gold today hitting a new all-time high against the dollar, and the world fixated on how the euro is "plummeting," I thought a bit of perspective was in order. As this chart shows, the euro (as the extension to the DM) and the dollar have been moving pretty closely together relative to gold. If all major currencies are losing value relative to gold, that is a good sign that the world's supply of money exceeds the demand for it, and that is a necessary precursor to rising inflation.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

The 2008 global equity (NYSEArca: EFA ), real estate (NYSEArca: RWO ) and commodity (NYSEArca: DBC ) meltdown erased an estimated $50 trillion worth of wealth. The debt burden will become larger and more of a default risk. Deflation Threat - A Simple Concept Government spending and money printing has been identified as key causes for an alleged inflationary environment.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

Calafia Beach Pundit submits: With gold today hitting a new all-time high against the dollar, and the world fixated on how the euro is "plummeting," I thought a bit of perspective was in order. As this chart shows, the euro (as the extension to the DM) and the dollar have been moving pretty closely together relative to gold. If all major currencies are losing value relative to gold, that is a good sign that the world's supply of money exceeds the demand for it, and that is a necessary precursor to rising inflation.

Calafia Beach Pundit submits: With gold today hitting a new all-time high against the dollar, and the world fixated on how the euro is "plummeting," I thought a bit of perspective was in order. As this chart shows, the euro (as the extension to the DM) and the dollar have been moving pretty closely together relative to gold. If all major currencies are losing value relative to gold, that is a good sign that the world's supply of money exceeds the demand for it, and that is a necessary precursor to rising inflation.

SPDR Barclays Capital TIPS (NYSEArca: IPE ) Max Chen contributed to this article. The iShares Barclays TIPS Bond Fund (NYSEArca: TIP ) has become the seventh-largest ETF in the United States, with just more than $20 billion in assets, and the fund pulled in $4 billion during 2009 alone, observes Paul Amery for IndexUniverse . Investors of TIPS-related ETFs are betting on high inflation hitting our economy soon.

Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession). But I believe gold prices are moving higher due to the public's opposition to fiat currency, fiscal stimulus and what is generally viewed as continued "money printing". It has caused the increasing rally cry for reduced government spending and continued shrieking from deficit hawks who haven't differentiated between the currency system in the EMU and in most other developed nations.

In this article, we offer some tips on how to hedge inflation risk using various ETFs. IShares Barclays TIPS Bond ( TIP ) holds bonds that will increase in par value with inflation. Probably the best option among foreign currency related ETFs is SPDR DB International Government Inflation-Protected Bond ( WIP ), which offers two forms of inflation protection through the TIPS bonds as well as through currency diversification.

iShares Barclays TIPS Bond ( TIP ) Treasury Inflation-Protected Securities, which are not part of the Barclays U.S. The current five-year TIPS break-even rate (the yield spread between a five-year TIPS bond and a five-year Treasury note) is at 1.36%. With the great performance of government bonds over the last 10 years and historically low interest rates, it may make sense to reduce exposure to this area of the market.

A Standpoint analyst commented, "In 2000, BBY had 400 stores and a $32 share price adjusted for inflation. The Bottom Line We had removed shares of BBY from our recommended list back on May 13, 2009, when the stock was trading at $37.06. Electronics retailer Best Buy Co., Inc. ( BBY ) saw its coverage initiated with a "Buy" rating on Wednesday by analysts at Standpoint Research.

The company was founded in 1891. Dividend: 84 cents Yield: 2.00% - TSCO: Tractor Supply Co.: operates retail farm and ranch stores in the United States. With current tough times, and maybe getting tougher with deflation as a real possibility, investors who think more defensively may see better returns with more conservative stocks, ones with dividends and solid balance sheets. The company also offers installation, retrofit, and aftermarket services, such as spare parts, overhaul and repair,engineering and technical support, and fleet maintenance programs.

Ways to Play Germany's SAP ( SAP ) is the equivalent of Oracle (Nasdaq: ORCL) here in the U.S. While China wrestles with possible bubbles, Japan tackles deflation and the United States frets about its government spending, Germany has spent much of the last few years away from the headlines. According to just-released data from Germany's Federal Statistics Bureau, German exports are currently rising at a +25% to +30% clip compared to a year ago.

Baidu.com ( BIDU ) is a good example of such a company. For example, BIDU is down 4% today on the news and after some extreme gains over the last few weeks it could be due for a larger correction. That is problematic for the Chinese who are facing unprecedented pressures internally and externally to manage their currency, balance their massive trade deficit and prevent inflation from leading to a banking collapse and popular unrest.

The iShares MSCI Germany ( EWG ) exchange-traded fund gives nice broad-based exposure with minimal fees. While China wrestles with possible bubbles, Japan tackles deflation and the United States frets about its government spending, Germany has spent much of the last few years away from the headlines. According to just-released data from Germany's Federal Statistics Bureau, German exports are currently rising at a +25% to +30% clip compared to a year ago.

Owning materials and agricultural ETFs, say the iShares S&P North American Natural Resources Sector Fund (NYSEArca:IGE) or the Market Vectors Agribusiness ETF (NYSEArca:MOO), makes a whole lot of sense too. When I talk about inflation, I'm not waiting for the CPI to print some scary high number or for bond yields to head through the ceiling, though that day may well arrive before long. To that extent, gold-related securities like State Street's SPDR Gold Shares (NYSEArca:GLD) are just one piece of preparing for the next big wave of rising commodities prices.

Investors looking for exposure to Germany through certain sectors should also check out Deutsche Bank ( DB ) in banking and Siemens ( SI ) in engineering. While China wrestles with possible bubbles, Japan tackles deflation and the United States frets about its government spending, Germany has spent much of the last few years away from the headlines. According to just-released data from Germany's Federal Statistics Bureau, German exports are currently rising at a +25% to +30% clip compared to a year ago.

FMC disallows sub-brokers The Forward Markets Commission ( FMC ) has directed commodity exchanges to disallow sub-brokers by whatever names they currently operate. FMC on Thursday issued new guidelines for regulating these authorised persons. "It is an important step towards client protection and will bring discipline in the market," said FMC Chairman B C Khatua Food inflation eases to 9.67% Food inflation eased to single digits, rising to an annual 9.67 per cent during the week ended July 17, compared with the previous week's year-on-year surge of 12.47 per cent.

The ProShares UltraShort China ETF ( FXP ) is up +6% today alone as traders deal with this round of bad news. That means that if Chinese stocks drop -5% on a given day FXP will be up +10%. That is problematic for the Chinese who are facing unprecedented pressures internally and externally to manage their currency, balance their massive trade deficit and prevent inflation from leading to a banking collapse and popular unrest.

Deutsche Bank also sponsors the New Germany Fund ( GF ) , a closed-end fund that focuses on small and mid-cap companies in a range of industries. While China wrestles with possible bubbles, Japan tackles deflation and the United States frets about its government spending, Germany has spent much of the last few years away from the headlines. According to just-released data from Germany's Federal Statistics Bureau, German exports are currently rising at a +25% to +30% clip compared to a year ago.

Hewlett Packard ( HPQ ) moved down on news it was entering into a bidding war with Dell for 3Par ( PAR ). Those are the words of Dean Baker, co-director of the Center for Economic and Policy Research. During the 1970s real home prices increased 1.1 percent a year after inflation, which more or less proves the old adage of considering real estate more as shelter for your family, instead of it being a nest egg for your retirement.

DuPont was founded in 1802. Dividend: $1.64 Yield: 3.90% - HRL: Hormel Foods: makers of Spam. With current tough times, and maybe getting tougher with deflation as a real possibility, investors who think more defensively may see better returns with more conservative stocks, ones with dividends and solid balance sheets. The company was founded in 1891. Dividend: 84 cents Yield: 2.00% - TSCO: Tractor Supply Co.: operates retail farm and ranch stores in the United States.

Market Vectors Gold Miners ( GDX ) was up 0.22% to $55.46. Commodities ended trading down after crude oil futures retreated on comments from the Federal Reserve warning of deflation. In other energy futures, heating oil is down $0.02 to $2.12 a gallon while natural gas rose 2.7%, to $3.92 per million British thermal units.

If the specter of near-term deflation in the U.S. materializes, then TIPS, or Treasury inflation-protected securities, and other inflation-linked bonds from countries grappling with deflationary pressures, could wind up losing value. Although bonds were appealing to investors in August, another BlackRock inflation-linked product, the iShares Barclays TIPS Bond ETF (NYSEArca:TIP), actually had outflows of $332.8 million. Currently, the index consists of 167 issues from 17 developed and emerging economies:Australia, Brazil, Canada, Chile, France, Germany, Greece, Israel, Italy, Japan, Mexico, Poland, South Africa, Sweden, Turkey, the U.K. and the U.S.

TGR: In our last interview you said, "Gold takes off when money supply and deficit spending grow while real interest rates fall below zero-that is, when the rate of inflation exceeds the nominal interest rate." Looking around the world, we see that the U.S. and European governments at the very least are engaged in fiscal policies that are both growing the money supply and increasing deficit spending. I think that we're going to see gold gradually grow in value relative to other currencies in the world for two reasons.

At this time, my firm currently has exposure to the following ETFs discussed in this article:SH, FXY, BIV, GLD, HYD, TIP and PCY. iShares Barclays TIPS Bond ETF (NYSEArca:TIP) is composed of a basket of Treasury inflation protected securities ( TIPS ). In the event of inflation, TIPS will help protect the current yield from deterioration caused by inflation.

PNC Financial ( PNC ) and Metlife ( MET ) were also laggards. The markets saw a bit of a pullback today on the overhang of yesterday's Federal Reserve commentary that featured the dreaded "D-Word" - Deflation. We also had news out this morning that White House economic adviser Lawrence Summers will leave the Obama administration at the end of the year.

Interestingly, the iShares Barclays TIPS Bond ETF (NYSEArca:TIP), a fund that tracks an index of inflation-protected U.S. Treasurys, had $332.8 million in redemptions, a measure of how much investor sentiment shifted away from concerns about inflation last month. TIP was tenth on the IndexUniverse.com losers list. Both funds had more assets at the end of August than the previous month, meaning that market declines weren't enough to offset flows.

The article reported: I've bolded the above statement because what it means is that the 5-year Treasury note price is at an historic, all time high. In the event of double digit inflation per annum on average (like we experienced in the late 1970s) this five year bond could lose nearly 40% of its value. As far as I'm concerned, the words "guaranteed by the Government" should raise red flags, not soothe investor nerves.

Elsewhere, the commodity sector outperformed other sectors today, with Freeport McMoran ( FCX ) and BHP Billiton ( BHP ) bucking the early selling. The markets saw a bit of a pullback today on the overhang of yesterday's Federal Reserve commentary that featured the dreaded "D-Word" - Deflation. We also had news out this morning that White House economic adviser Lawrence Summers will leave the Obama administration at the end of the year.

Getting into some specific dividend names, General Mills ( GIS ) traded higher following the company's Q1 results, while shares of Darden Restaurants ( DRI ) pushed lower on their earnings' report. The markets saw a bit of a pullback today on the overhang of yesterday's Federal Reserve commentary that featured the dreaded "D-Word" - Deflation. We also had news out this morning that White House economic adviser Lawrence Summers will leave the Obama administration at the end of the year.

In metal ETFs, SPDR Gold Trust ( GLD ) was up 0.65% to $125.59. Commodities ended trading down after crude oil futures retreated on comments from the Federal Reserve warning of deflation. In other energy futures, heating oil is down $0.02 to $2.12 a gallon while natural gas rose 2.7%, to $3.92 per million British thermal units.

At present, the scales are tipped toward inflation, although I'm not confident that this is sustainable. Keep your inflation hedges using tools like GLD or the iShares Barclays TIPS Bond Fund (NYSEArca:TIP), but also recognize how far they have both run. A market rejection of Fed policy would most likely be evident in dramatic increases in metals and commodities that, ultimately, would almost surely be followed by rates moving higher.

Getting into some specific dividend names, General Mills ( GIS ) traded higher following the company's Q1 results, while shares of Darden Restaurants ( DRI ) pushed lower on their earnings' report. The markets saw a bit of a pullback today on the overhang of yesterday's Federal Reserve commentary that featured the dreaded "D-Word" - Deflation. We also had news out this morning that White House economic adviser Lawrence Summers will leave the Obama administration at the end of the year.

There are a lot of ways to play the uncertainty using a variety of bond ETFs, including the iShares Barclays TIPS Bond ETF (NYSEArca:TIP) that can help protect against inflation, but your choices do depend on how you think things will play out. As I mentioned, investors do have the option of investing in Treasury inflation-protected securities (TIPs), theU.S. TIP, the inflation-protection bond ETF, is already trading near a 2-½-year high, and it could see much higher prices if inflation starts to creep into the market.

In precious metal ETFs, the SPDR Gold Trust ( GLD ) is down 0.13% to $129.30. "The banking sector, mortgages, inflation in emerging markets, deflation here, a mini-currency crisis -- those issues are weighing on everybody's minds." Hewlett-Packard Co. ( HPQ ) launched a tablet computer that runs Microsoft Windows and is targeted at business customers, Reuters reports.