A reader asked if I would answer the question: What steps should a smart investor take in anticipation of a period of increased inflation? I'll take a stab at it.

The background to the question is that inflation looks likely to increase in Bermuda if economic activity continues at its current pace. We are also, however, hearing that a US recession is a possibility. Should that happen, the heat might die down in Bermuda a little. Either way, better to plan now than to wait until inflation really bites.

Just in case it turns out I don't know everything, I shall quote a few people we've all heard of. We'll start with Calvin Coolidge, who was, like, this American dude. He said: "Persistence and determination alone are omnipotent. The slogan 'Press on' has solved and always will solve the problems of the human race."

Now, that is how it's done. No feeling sorry for yourself. No, Sir. Old Cal checks in from one end of a spectrum of opinion applicable to behaviour in inflationary times. At the other end are some of the doom and gloom merchants who have taken the view of late that the financial world is spinning out of control. They advise you to jump, without delay, out of the nearest window.

What a savvy investor should do at such times would be determined, mostly, by his or her position on the Coolidge/Doom & Gloom axis. I take the view that in financial matters, Coolidge was something of a hippie. As the poet laureate Sir Reg Dwight (a.k.a. Elton John) more or less put it: You and I are just candles in the wind, are we not?

None of us has enough money or influence to change the direction of the global markets (with the possible exception of a couple of the insurance kings in Hamilton), so all you can do when storms blow is to batten down the hatches, tighten up the riggings and splice the main brace, me hearties.

Arrrr. The traditional Bermudian solution when the storms do blow is usually the best one. Tidy up whatever you have lying around, i.e. uninvested balances, spare change, investments that were mistakes, that book-buying Jones that's costing you three grand a month. Just as you would bring in the outdoor furniture, you might want to act similarly with the riskier end of your portfolio, if you have such a thing and if it has a risky end. Inflation erodes the value of money. Your job, therefore, is to protect the value of what's yours as the storm attempts to erode it.

Read everyone on the subject, or at least read someone other than me. (As if I would have to give you such advice.) Decide on how you think this will play out and then act accordingly with your portfolio. "Accordingly" can range from reallocating towards or away from stocks, buying some gold (now above $800 per ounce), doing nothing or moving to Iran. All these are valid options, except the last one.

I say: once you have your stuff stowed, hunker down and chill out for a while and see what happens. If you're 64 and will need some of your capital soon, set it aside somewhere safe, in cash. If you're 25, a spot of inflation won't kill you, and you'll be around when it gets sorted out in due course.

You have to remain sanguine, I would argue, if for no better reason than you would look pretty stupid if you panicked, and got it wrong.

When the first millennium approached, people thought that their number was up. They were perhaps a little less sophisticated than we are today, but they were human beings and their thinking patterns were essentially the same as ours. Expecting to be consumed in a ball of fire, many sold their houses to speculators for a fraction of their true worth. Something about rich men, camels and needles may have affected their thinking.

Anyhoo, there they were on January 2, 1001, entirely not consumed by fire and homeless. Bad scene.

Fast forward to the last time inflation spun out of control in the West, which was the early 1980s. It caused tremendous ructions in the world economy and raised the ghastly spectre of what can happen when inflation really sets in (i.e. Germany, the 30s, that whole thing with Adolf Hitler). The global economic system has operated ever since with the control of inflation as its number one focus, so things aren't likely to get too far out of hand. Although we are in what economists call the "late capitalist" period, it may not be as late as you think. In short, then, my advice, in the words of Douglas Adams: Don't Panic.

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I stand 100 percent behind an idea floated on this page last week by Martha Myron, that the tax on food should be repealed immediately. The tax hits worst those least able to pay it, working men and women. It yields little, when compared to $1 billion in Government tax revenues, and is hateful and morally repugnant.

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The following report from the BBC last week has nothing to do with money, or football, even though it relates to an England-Croatia soccer match held last week. It is provided solely for your entertainment.

The report runs: "(Before the match began) Tony Henry belted out a version of the Croat anthem before the 80,000 crowd, but made a blunder at the end.

"He should have sung 'Mila kuda si planina (which roughly means 'You know, my dear, how we love your mountains').

"But he instead sang 'Mila kura si planina', which can be interpreted as 'My dear, my penis is a mountain'.

"Now Henry could be one of the few Englishmen at the Euro 2008 finals in Austria and Switzerland as Croatian fans adopt him as a lucky omen. They believe his mistake relaxed their chuckling players, who scored an early goal in the 3-2 win that put Croatia top of the group and knocked out England. 'It was apparently the last line on the second verse which I made the mistake on,' Henry told BBC Radio 5 Live. 'The last thing I would do is brag about my parts like that.'"

Footnote: It is possible to assume from the foregoing that the Croats are a less ironic people than are we. If the American anthem ran "My dear, how we love your mountains," it would have been untenable, and would have been changed for base, but obvious, reasons. I could fill this newspaper with ribald thoughts on this subject, but shall instead keep them to myself.