Greater minds than mine (and I realize this doesn't narrow it down much) are locked in a fierce debate: will prices go up or down? That is, should we be more worried about inflation or deflation? Paul Krugman, who is right about almost everything but seems to lack self-awareness when he hurls charges of partisanship at his opponents, says we should forget about inflation. NIall Ferguson, also a smart guy and probably a snappier dresser, derides mainstream economists for clinging to their Keynsian teddy bear. He can't understand the hair-of-the-dog approach (debt got us into this mess, so why should the doctor order more of it?) and fears inflation from all this money Uncle Sam is printing.

What's a poor ignorant investor to do? "The test of a first-rate intelligence," Scott Fitgerald said, "is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function." Here I am, living proof that no such intelligence is required. Just buy equal parts inflation-protected Treasuries and investment-grade corporates, which i was fortunate enough to do a few months ago, when both were being given away. Sure it's early on the TIPs but they are a direct obligation of your dodgy uncle (the soul of propriety compared to the alternatives) and capital preservation has its virtues. With the rest of your portfolio you can worry about stocks, commodities or foreign holdings (the dollar ought to fall, except so should everything else). Most of that stuff scares me just now, so I'm on the sidelines.

In general, I remain in the woe-is-me camp. We have huge debts, suspicious creditors, a terrible employment picture, falling real estate, busted banks, a huge foreclosure mess and a considerable level of federal and state political dysfunction. Our schools are inadequate and in some crucial ways so are our values. Once we get thru the worst, it's easy to imagine years of stagnation (or likelier still, stagflation) ahead. On the other hand, people have been betting against this enterprise of ours ever since Plymouth Rock, and doing so has always been a reliable way to lose money. So my guess is that sooner or later things will be fine.

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