I don't know about you, but here at the ranch, our four largest expenses each month are fuel, groceries, livestock feed, and insurance. I'm sure that you have seen what has happened to food and feed prices in the past year. Driven by higher fuel and fertilizer costs as well as huge demand for corn--for ethanol production--some food costs have gone up by 25%. Wheat, for example, recently spiked to $10 per bushel--a record high. With all of the preceding in mind, we can realistically conclude that the "real world" consumer price inflation rate is somewhere between 12% and 15%.

As I've written many times before, inflation is a form of robbery, albeit in slow motion. Since there is effectively only one currency in our country, it is the only way to do business. It may prove difficult, but you need to discard your traditional mindset about the currency and realize that we are riding a down escalator. An inflationary environment stands traditional logic on its head, since "Saving" becomes losing., and "Investing" is almost like throwing coins into a pond if the rate of return of any investment is lower that the real world inflation rate. The only noteworthy exception, is investing in tangibles, which I've discussed at length in previous SurvivalBlog articles. Obviously you can't invest in anything perishable. But there are lots of things--like common caliber ammunition and full capacity magazines--that have storage lives that can span decades or even centuries.

With every passing day your savings are gradually eroded. With an effective inflation rate of 15% per annum, applying the Rule of 72 we can see that the purchasing power of every "saved" dollar is cut in half once every 5 years.(Well, 4.8, to be exact, but 12 month increments don't look pleasing when expressed in decimals.)

The following are some of my suggestions on how to protect yourself from the ravages of inflation:
1.) Buy in Bulk
Buy most of your staple foods and groceries at a discount or "warehouse" type stores such as Costco or Sam's Club. Don't overlook the "close-out" and "dented can" stores. (But avoid buying any bulged cans, or cans with dented rims.)

Stock up on non-perishable items whenever they are on sale: thing like light bulbs, paper products, bar soap, house cleaning supplies, laundry detergent, lubricants, and so forth. As long as you protect these supplies from theft, moisture and vermin, they are better than money in the bank. (Again, money in the bank is being eroded by inflation.) These are tangibles bought at today's prices, that you can use for many years to come. Here at the Rawles Ranch, we are still using up some spices, light bulbs, and aluminum foil that I bought at a military commissary in the early 1980s--at what now seem like absurdly low prices. My only regret is that I didn't buy more of them! This approach to stockpiling was described in the modern-day classic book "The Alpha Strategy" by John Pugsley. (Download this free book and read it!)

For more details on stocking up including some detailed tables on shelf lives, see my"Rawles Gets You Ready" preparedness course with accompanying audio CD.

If your local zoning and fire regulations allows it, buy your own gas and diesel fuel tanks. Also consider installing over-size propane or home heating oil tanks. Always ask about the availability of used tanks or 'trade-in" tanks. Who cares if they are in some odd color? Re-paint them flat forest green or earth brown. Wait and have your tanks re-filled each time there is a price dip. (Sadly, this is an increasingly rare occurrence, these days.)

When getting competitive bids from tank suppliers, be sure to ask them to lock in the price per gallon for the initial fill for each new tank. To win your business, the tank salesman might be willing to commit to a price that is a few pennies per gallon below current market. (This adds up on a 2,000 gallon tank!)

2.) Learn to Barter
Barter, by its very nature, shields you from inflation. Instead of using depreciating paper tokens as a means of exchange, you are directly exchanging a tangible for another tangible, or a service for a tangible, or a service for a service. As I've written previously in SurvivalBlog on several occasions, I do advocate stocking up on extra items for barter. However, it is with the proviso that you do not embark on buying goods dedicated for barter until after you have your family's essential beans, bullets and band-aids squared away, following a well-balanced logistics plan.

Here in The Un-named Western State (TUWS), there is a lot of bartering that goes on, quite informally. I see it all the time: Cartridge Reloading for Snow Plowing, Eggs for Honey, Firewood for Horse Training, and Zucchini for just a smile and a thank-you.

To be useful in barter, choose items that have most or all of the following seven attributes 1.) Have appeal/usefulness to the majority of the citizenry. 2.) Be immediately recognizable. 3.) Have longevity. 4.) Be easily divisible. 5.) Be relatively compact and transportable at reasonable cost. 6.) Have consistent quality. 7.) Have limited availability. Let's discuss each of those briefly, in turn.

1.) Have appeal/usefulness to the majority of the citizenry. Nearly every family uses soap, but just a few need #7 Singer sewing machine needles.

2.) Be immediately recognizable. Name brands need no introduction. All others are suspect.
3.) Have longevity. Keep shelf lives in mind. If you cannot barter it all away before it goes bad, then you are buying too much. Even coal has a shelf life.

4.) Be easily divisible. Boxes of matches, boxes of cartridges, coils of rope, balls of twine, and cans of kerosene are perfect examples. OBTW, if you plan on dividing a commodity in barter transactions, then be sure to have the containers needed for parceling it out.

5.) Be relatively compact and transportable at reasonable cost. Toilet paper has great appeal, but just $500 worth would completely fill the JASBORR.

6.) Have consistent quality. (For example, precious metals coins of known purity, or ammunition from a major manufacturer such as Winchester, Remington, or Federal.)

7.) Have limited availability. I mentioned zucchini earlier, for good reason. In North America, jars of freeze dried instant coffee would be ideal, but in Central America, they would probably be laughed at.

For some extensive lists of potential barter items suggested by readers, see the SurvivalBlog Archives for October 2005 and November 2005 (scroll down to November 1st and 2nd)

For a good rationale on selecting barter goods, see this SurvivalBlog article by OSOM.
3.) Learn Several Valuable (Barterable) Skills
Every family should have at least one home-based business that they can fall back on, on the event of an economic recession or depression. Concentrate on skills rather than goods for barter. The beauty of having skills to barter, is that most of them don't require much raw material. So, unlike barter goods, you will never "run out". By extension, it is best to have a skill that requires very little raw material. A profession or skill that also requires a specialized tool set is fine. However, if the skill also requires delivering a factory-made device to complete each transaction, then you might consider doing something else. (For example, installing burglar alarms might be profitable as long as you have a source of resupply, and as long as the power and telephone networks are functioning. But in a grid-down TEOTWAWKI how long could you continue running such a business?)

Avoid developing a skill that appeals only to wealthy customers for discretionary spending. Those are the purchases that will be delayed or skipped altogether in an economic depression, Hence, shotgun checkering and engraving are poor choices, but septic tank pumping is a good one.

Concentrate on a business that can be operated without the need for grid power. It is notable that most of the businesses in this category existed in the 19th Century. Who knows? Maybe buggy whip makers will make a comeback in the Second Great Depression

Ideally, you should have two or even three supplementary income businesses that you can fall back on to pay your mortgage and to buy necessities, if you lose your job. Depending on the severity of the coming recession or depression, some home-based business may thrive, while others won't. It is hard to predict which businesses will do well (although we have some clues based on the experience of the 1930s,) so there is safety in redundancy.

4.) Learn How to Pinch a Penny
Here are some suggestions (in no particular order), some of which I've borrowed from "The Encyclopedia of Country Living" by the late Carla Emery. (The Memsahib and I both highly recommend this book.)

Distinguish your needs from your wants.
Research and do some comparison pricing before any purchase of more than $10. Do extensive comparison pricing before any purchase of more than $100.

Never buy on impulse. Plan your purchases well in advance, do your homework, and be patient.
Refer to back issues of Consumer Reports magazine (at your local library) before making a purchase of a major appliance
Develop the habit of dropping by thrift stores, second hand stores, used book stores, and pawn shops.
Find out on which days particular items are discounted at thrift stores. (Often by a system of colored price tags.)
For big ticket items, do lots of comparison pricing via the Internet. If you decide to buy locally, then bring the price print-outs with you, to use as "ammunition" when you dicker.

Buy off season. Buy winter clothes in summer, and vice versa. Buy livestock in October and November, when owners are facing expensive hay purchases if they "winter-over" their stock

Use a clothes line instead of an electric clothes dryer.
Utilize the MSN Autos Web Page data for the best local gas and diesel prices. This is particularly important when you re-fill your cans and drums.

Heat with wood. Cut, haul, split and stack the wood yourself
Buy your guns and ammo at gun shows, not at gun shops. Learn how to dicker for the best prices.
Buy at farm auctions, but beware of impulse purchases and run-away bidding. Make a list of your maximum bids during the preview and and then stick to it religiously. Never bid emotionally, and never jump on on the bidding for an article unless you planned to bid on it before the auction began.

Build/make/sew things for yourself rather than buying them factory-made
If you use any national brands, then clip coupons. Keep your coupons well organized (many folks like to use an accordion folder and they keep it handy in their car), and don't lose track of coupon expiration dates.

Buy most items used, rather than new. Never buy a new "big ticket" item like a car or truck "factory new". Be sure to refer to Edmunds.com before making any vehicle purchase, to make sure you aren't getting a "lemon:" model or model-year. If you are buying a used vehicle worth $5,000 or more, then it is worthwhile to pay $8 for a vehicle history report.

Negotiate prices with merchants. It is amazing who is willing to negotiate. (But I've had no luck in talking down bridge tolls. I'll keep trying.)

Spend some of your Saturday mornings at garage sales and yard sales. Dress down when you go, and don't be afraid to negotiate for better prices.

Check Craig's List and your local "penny" or "nickel" classified ad papers frequently for free and bargain items
Avoid fashion trends. Dress and drive modestly.
Find out when there is a curb-side "free hauling" day offered by your local waste disposal contractor. If allowable by local law, cruise through the neighborhoods the night before the scheduled collection with your pickup or trailer. This is the way we found the majority of our small livestock cages.

When buying things from private parties or small businesses, offer other items or your skills in barter.
Watch for free tours at educational places like factories and museums.
If your community has a well-established local currency, then utilize it to the utmost.
Plant a large vegetable garden. Get plant starts for berries and other perennials from neighbors
Cancel your newspaper subscriptions and carefully limit your magazine subscriptions. These days, there is so much news and information available on the Internet free of charge (you are looking at some of it right now) that hardcopy newspapers are for the most part expensive dinosaurs. Two notable exceptions: 1.) If you are a consistent and well-organized coupon clipper. If that is the case, then you might want to get a "Sunday paper only" subscription.), and 2.) Subscribing to a small town weekly newspapers in your retreat locale. Reading one of these papers regularly is important for developing local intelligence and for "fitting in" by being knowledgeable about local geography, personalities, events, politics, and lore.

Change your own oil and make most of your own car repairs.
Buy a food dehydrator. It will pay for itself many times over.
Learn how to do your own canning. Once you have, you'll have no excuse to ever buy another store-bought jar of jam, jelly, or applesauce.

Buy dairy goats or a cow. Sell or barter the excess milk, or feed the excess to your chickens and/or hogs
Cut out needless expenses. (Like those $4 lattes at Starbucks and $20 trips to the movie theater.)
If you have a mortgage at a rate that is more than 1.5 percent higher than the prevailing rate, then consider refinancing. Just beware of any hidden costs and of course avoid Adjustable Rate Mortgages (ARMs.)

Swap CDs and DVDs with friends and relatives or check them out from your local library rather than buying new ones.
Develop a budget, and stick to it.
If you have a credit card then pay it off in full every month. No exceptions. Don't fall into the easy credit trap. Remember, the card is only in your wallet for convenience, emergency expenses (such as car repairs when travelling), and as a means to gain frequent flier miles or points for programs like gasoline purchase rebates. If you recognize that you don't have sufficient self control, then leave your credit card(s) at home--or cut them up.

Make detailed lists of all of your expenses, and scrutinize them weekly. Look for ways to reduce expenses.
Shop around for the lowest car/health/home/life insurance rates. A few hours of research on the Internet could easily save you $500+ per year.

Unless you know for certain that you want a book as a permanent reference, then use the public library or try to find it online. Don't overlook the inter-library loan system.

Get the free Skype software, and encourage the friends that you call often to do likewise. This will greatly reduce your long distance phone bill.

Take advantage of free or low-cot straining available from organizations like the American Red Cross and FEMA. (Just don't be ware of any socialist/statist nonsense that they try to feed you along with the training.)

Learn how to repair small appliances and engines.
Don't buy store-bought meat. Hunt for or raise your own.
Handload your own ammunition.
Get out of debt and stay out of debt. Paying interest is throwing money away. Forestall making purchases to avoid indebtedness. Instant gratification creates decades of debt.

Proviso #1: Do not attempt to save money by foregoing carrying insurance, or by forestalling any expenses that have an impact on health, hygiene, or safety. For example, if your windshield gets cracked beyond repair, then replace it. If your chimney needs cleaning, don't delay cleaning it. (But of course buy your own brush and rods and learn how to do the job yourself.) If you have a toothache, don't delay in seeing your dentist. (But ask about possibly paying in barter when you do!)

Proviso# 2: Don't be Penny wise and Pound foolish. If you are a highly-paid professional, then take into account the value of your time. For example if you are an anesthesiologist, you should probably find a few more billable cases rather than taking up handloading.

Proviso# 3: Don't skimp on education. That is an expense that will make you money in the long run.
In closing, remember (and recite frequently) this old adage: "Use it up, wear it out, make do, or do without."