How will the $1 Trillion deficit affect You---What can You do about the deficit and inflation?

Jan. 24, 2011 - PRLog -- Bernarr Pardo, as many others, notes that the $1 Trillion deficit will likely have a significant inflationary effect. He posted a video, "Possible Inflation Scenario in the US?",  on his blog detailing one possible inflation scenario.

According to the Daily Wealth newsletter: "Now, the man on the street uses the term "inflation" to mean when prices for everything seem to go up. Or put another way, inflation is when the dollars in his pocket buy less. In truth, this is the effect of inflation. The root cause is simply money printing. When you print more money, that money has less value than if you didn't print any new money at all."

So what we are seeing with rising commodity prices is not only the supply and demand story I led off with. It's also the effect of paper money losing its purchasing power in the real world of things. This, too, was easy enough to see. Finally, all that money printing – the "quantitative easing" baloney you've heard about – is coming home to roost."

There has already been large price increases in commodities over the past year. One economist noted "If you measure the stock market not in dollars but gold, it is down 80% since 1999."

Bernarr suggests considering investments in gold and silver as a hedge against inflation. Also he suggests investments in foreign currencies of countries that have a large economic basis in commodities.
See the video and his comments at http://investingbasicsguide.com/