For example, suppose you want to buy the broad S&P 500 stock index. You can buy it via the corresponding exchange-traded fund with ticker "SPY". SPY currently is trading at $97.62/share -- well above its lows below $70 four months ago. If you want to buy SPY for the long term, you might consider selling a long term put (that has 1 to 2 years left before expiration). In your brokerage account, (or the yahoo quote page), click on the 'Options' link. I see that a put on SPY with a strike price of $85.00 and expiration of December 2010 has a bid of $7.60 at the time I write this. That means somebody is willing to pay you $7.60 for the right to sell you SPY for $85.00, expiring December 2010. This is a great deal since you are even considering buying at the current market of $97.62! The worst that could happen if SPY suffers a huge drop is that you effectively bought it for only $77.40 ($85 net of the $7.60 you received.) This 21% discount to the current price is a worst case scenario I could certainly live with!

     Puts are bought and sold in contract units that consist of 100 shares of stock each. So if you sell 1 put at $7.60 with a strike of $85.00, you need to have enough cash kept on hand to buy 100 shares, or $8500.00. You'll receive $760.00 cash in selling the 1 put contract, less a small commission. To trade options, you must sign an agreement with your brokerage and read a pamphlet (per SEC rules) about the risks of options. However, if you limit yourself to only selling put options, you are doing nothing riskier than buying stock, provided you keep the cash ready. You should always keep enough liquid assets to pay for the underlying stock, as the puts can be exercised at any time without warning. (I don't recommend using margin to collateralize selling puts unless you can get the cash quickly.) It's wise to keep plenty of collateral (if not the cash, then stock, mutual funds, CD's, etc.) in that brokerage account as a buffer because if your holdings in the account lose enough value the broker can sell them to raise cash as collateral for your put obligation. However, you can usually transfer mutual funds and such into a single brokerage account pretty painlessly to beef up its collateral (marginable) value. Also, if you change your mind before the put is exercised, you can simply "buy to close" the same number of contracts of the put and thus be relieved of the 'open' obligation to buy the stock.

    Keep in mind that selling a put option does not guarantee you will be sold the stock. The put will only be exercised by the buyer if the market price drops below the strike price. If the stock is a "must own" position for you, perhaps combine selling puts with buying some shares outright. You can also 'play around' with short term trades of selling and 'buying to close' puts, knowing that the worst case scenario is that you are forced to buy a stock you like at a price of your choosing. Selling puts is a favorite strategy of mine and I've never failed to profit from a put trade yet~ (...eventually)

    If you have a lot of money to invest, then warehousing all that junk silver might not be appealing. If you are so inclined, you might consider collecting higher value individual coins that are graded, certified and encapsulated by a reputable third party. However, you need a genuine interest in coins to be motivated to acquire the necessary education to avoid the pitfalls of buying coins.

    The bottom line is that if gold stagnates or declines (sooner or later I'm confident it will), certain numismatics will likely hold up well or even keep rising. On the other hand, if precious metals rise because of bad economic news, many numismatics will probably also rise sympathetically, and junk silver certainly will since it trades based on its silver melt value. So yes, older collectible (not purely "bullion") coins can offer much more downside protection should spot prices fall.

    The book's silence of advice is actually a blessing. A plethora of predictions that actually have a thirty, fifty or even seventy percent chance of coming true are not helpful. They are noise that is best left unsaid. I avoid predictions or advice unless I have powerful reason to believe the outcome has at least a 90% chance of occurring. Such things often need a 5 to 10 year horizon (or possibly more). (Schiff is trying to predict in this way, but time will prove him to be far from the mark -- especially on inflation.) As Warren Buffett has said, "there are no called strikes in investing." You can wait for the perfect meatball pitch that is screaming to be slugged, and thus avoid strikeouts. To make up for the lack of specific investment advice in the book, I'll post here for readers my 90%+ recommendations at the above link on "clear opportunities and pitfalls."

    The subtitle was also to suggest to libraries and bookstores to shelve the book more appropriately in the 'personal finance' section than in 'economics'. Sometimes mundane marketing can drive decisions.

    If you don’t already have the accounts at foreign banks, I would stick with U.S. banks (or foreign banks with a large U.S. retail presence, such as Dutch giant ‘ING’)It may take some searching to find one that offers CD’s in the foreign currencies you want. Find out what government depositor insurance applies.

    Mass bank failures sweeping the country (or globe) is now far less likely since banks have been shoring up their balance sheets for the last year, and the government has given the clear signal that it will do whatever it takes keep the system from collapsing. A much bigger consideration is that if you live in the U.S., you will need to pay all your bills in U.S. dollars. There is a fair amount of agreement that the dollar ought to weaken, but you never know. Anything can happen, and the dollar could actually strengthen over time. Then all your foreign assets and income will decline in the conversion, proportionally to any dollar rise. I have no argument against Schiff’s “getting out the dollar” -- somewhat.   Many foreign stocks do look cheaper and the BRIC countries' economic growth story is for real. However getting your assets out of the dollar completely is betting the whole farm that the dollar will not strengthen. If the dollar does go higher you could lose really big.

     I would not say that I'm "hot on collectibles" in general. However, I am in favor of investing in some collectibles (or other tangible assets) that are reasonably priced, well understood by the investor, and have a limited supply (i.e., new production is limited). Collectibles (or other hard assets of some kind) can provide a key diversification benefit and reduce volatility in a portfolio. They can help you sleep at night. Shrewdly chosen, they can make phenomenal gains. Be careful to avoid 'hot markets' and overpaying for these fixed (non-growing, non-income producing) assets. [Those buying gold and silver at $1050.00 and $17.50 today stand an excellent chance of discovering one day in hindsight that they overpaid. When that happens, no growth or income can ease their pain.]

     As for an asset you can physically hold as a pure hedge against runaway inflation, there is one completely overlooked item that has such compelling advantages, and so few disadvantages, as to trump all of the others, in my opinion. That asset, believe it or not, is the lowly 'Forever' first class postage stamp. Its advantages include:

• unlike gold and silver, its value cannot go down, as it will always mail a letter, and have letter-equivalent value in mailing packages
• unlike gold and silver, its value is guaranteed to rise in step with postage rates [inflation]
• it is used by everybody and therefore extremely liquid, and easily sold for the tiniest spread below the current first class letter rate
• it requires very little storage space, is easily hidden, and a large value in stamps is also very easily and cheaply moved or shipped
• it can be divided into many smaller stashes
• it is highly divisible for barter -- in fact, during the Civil War when coin was hoarded until it was quite scarce in commerce, and paper money was not trusted, postage stamps became the preferred medium of exchange
• when used for postage, it is not subject to capital gains tax (when sold, technically a gains tax would be incurred)--something to think about if you own a business that does a high volume of mailing; should you sell gold for nominally twice what you paid for it, you'll owe tax on the 'phantom' gain; if you're only breaking even after inflation, you'll be in negative territory after taxes
• it has no risk of loss from currency swings, being denominated in US dollars
• though you only intended to hedge for inflation, it could actually turn out to be a money maker if letter rates rise faster than the prices of the things you typically buy (it is quite possible that postage rates rise faster than inflation since snail mail volume continues to fall from more and more use of electronic communication)

    If you really feel you need to dump your dollars for an inflation hedge that you can physically hold, 'Forever' stamps are an outstanding choice. You can rest assured that if a gallon of milk (or gasoline) costs $25, and mailing a letter costs $5, your stash hasn't lost any purchasing power. Don't neglect to keep the stamps in multiple locations, though, in fireproof safes.

    Think ahead several years, when prices have failed to skyrocket as the gold bugs predict. Would you like to discover you own a pile of gold or silver that you may have bought way too high, or rather a mess of stamps that have increased in nominal value just as sure as the Post Office hikes its rates?

Full disclosure: I do not have a large stash of stamps -- the ultimate inflation hedge idea just struck me one day in line at the post office!