What do you do with your money in deflation?

In deflation, nothing will serve you better than you have as much cash around as possible.

I don't think things will deflate as much as you might hope, but pool up your cash and invest when you believe the tide will turn from deflation to inflation.

Everytime you go to the bank as to get a roll of dollars, quarters, dimes, nickels and pennies. Get in the habit of using coins for smaller purchases. THis is a good habit since during deflation the money in your savings isn't going to earn you much interest and the coins have some real value should inflation go sky high. Besides coined money comes straight from the treasury, so it bypasses the Federal Reserve. In other words it isn't borrowed money.

Don't get comfy expecting deflation to stay, is my advice.

If you have spendable cash and you aren't prepared for hard times, I would recommend taking advantage of the "buyer's market".

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First, be thankful you have any.

In an environment in which credit dries up, cash is king.

Think you can afford Apple's new $999 laptop? Most people could -- with a credit card. But how many people have that kind of cash in the bank that they'd spend on a new laptop?

Since there is no more credit, sellers have to drop their prices in order to sell. This includes sellers of stock, computers, houses -- just about everything.

So unless you know how to short stocks, which comes with its own risks, the best thing to do with cash in deflation is hold it. It is like an inverse investment. Rather than going up in value, the price of everything else falls!

So earn your money and save it. And in a few years, you'll be able to buy that $500,000 house across the street for $100K or less!

Be thankful that you still have a job. With Deflation, comes unemployment, which in turn, drives deflation further. (oversimplifying, i know).

Now, the real catch is that when deflation gets out of control, the Fed has the ultimate weapon - the printing press. Since they've already got it running, expect them to keep it going full-tilt to head off deflation. We all know what that means in the long term.

So, my advice during deflationary times. Hoard - slowly.
While prices are falling, slowly start to build your precious metal collection. Notice I said collection, not "portfolio". Only purchase the physical stuff.

Eventually, the printing press will stop, when the Fed thinks the Deflation is under control. With time, all the printing will catch up with them, and inflation will kick into high gear. While I don't expect wiemer-style hyperinflation - almost everyone who knows anything agrees that precious metals will skyrocket. That's when you slowly cash in.

So, to summarize. When deflation happens, enjoy the lower prices for your standard of living, and put the savings into precious metals. Holding cash in a bank or in your mattress will do you no good. And focus on keeping your job. That's the number one thing you can do. Expect 10% unemployment soon.

WHAT THE GOV't did ,BAIL your own butt out of debt...
weee

I am curious what answers people have.