Over the last few weeks I’ve gotten away from our usual tradition of having a weekly Q&A session, so I’m going to get right to it today.

First, Constanza asks, “Simon, you were writing recently about ‘international diversification.‘ Can you explain a bit more about this?”

Sure. It’s becoming obvious that there are massive problems in the developed world– ballooning debts, stagnating economies, soaring inflation, high unemployment, food and energy shortages, rising crime, increased regulation, diminished civil liberties, etc.

These problems aren’t going away just because some politicians pull an accounting stunt or deny that they exist.  These problems are real, and thinking individuals need to realize that the consequences of inaction are only going to get worse.

Most people will unfortunately do nothing and wait for a political solution. Their faith in their elected leaders will unfortunately be rewarded with a front-row seat to witness the final erosion of their country.

Others will take the approach of trying to change the system. Relying on the democratic process certainly seems like a noble cause, but remember that democracy is really just two wolves and a lamb deciding what to have for dinner.

International diversification is the cornerstone of my own ethos– it involves looking overseas to protect you interests and seek new opportunities. If your home, your work, your family’s safety, your savings, your healthcare, and your entire livelihood are tied to one crumbling country, you are exposed to substantial risk.

Diversifying internationally can drastically reduce this risk. It might mean finding more stable sources of income overseas, better stores of value for your savings, stronger markets to invest in, safer places for your family to live, more cost effective places to obtain healthcare, more secure places to store gold, etc.

I’m not suggesting that everyone should get on a plane tomorrow and leave home… though for some people who have reached their breaking points, this is the ultimate solution. What I am suggesting is that people stop limiting themselves to a single country that’s in decline, and begin to consider the wider world.

On that note, Alvinium asks, “Simon, you recently wrote that owning agricultural land is a great hedge against rising food prices. What about the FDA, USDA, and other agencies that are stepping up their efforts to make it a crime to grow one’s own organic food?”

Easy. I think people in the US should consider buying property overseas where there is no FDA or USDA to stop them from reducing their ‘agflation’ risk.

A few months ago in an issue of Sovereign Man: Confidential, I interviewed Joel Salatin of Polyface Farms; Joel was featured in the documentary Food, Inc., and he has decades of personal anecdotes in dealing with various agencies, many of which are chronicled in his book ‘Everything I Want to Do is Illegal.‘

He told me one recent story about a school in California that grows its own carrots. The children pick the carrots and wash them before eating, but the local Health Department came in and said that the children are not allowed to wash and eat those carrots without a Food Handlers’ license.

It sounds like a sick joke, but the system definitely favors the big ag companies at the expense of individuals. To me, you can try to fight the system, or simply go somewhere else where you are free to do what you want.

Chile is the place that I’ve chosen for our resilient community exactly for this reason. In the future, I don’t think there will be too many things more important than a steady, healthy, independent food supply… and I’m not willing to take the risk of having some government agency dictate what I can/can’t do.

Last, Elai asks, “Simon, a lot of people blast Ben Bernanke, but given the tools that he has at his disposal, what can he do to improve the economy?”

Think about it like this– even in the most basic economics classes, students learn that price controls just don’t work. Electricity is a great example– many governments (Argentina for instance) fix retail electricity prices at artificially low levels. This creates excess demand, often causing major power shortages.

Suppose the government announced that iPads would now cost $1. Everyone would rush out immediately to buy one, and as there would no longer be a profit incentive for Apple to continue manufacturing them, an iPad shortage would quickly ensue.

Simply put, price fixing creates terrible distortions in the marketplace that lead to shortages or gross misallocations of resources.

Now, consider that interest rates are essentially the price of money– the price which a willing borrower agrees to pay a willing lender in exchange for a specified amount of capital.

If we can agree that price controls are a bad idea, why does it seem like a good idea to give one man nearly sole control to set the price of money? This is absolutely the one price that shouldn’t be controlled above all else!

The price of money affects everything in an economy— savings, spending, investment, foreign exchange rates… the price of money has the most far-reaching implications, and yet our financial system leaves setting this price to the serially erroneous prognostications of a single individual rather than the market.

Bernanke’s role is to control the price of money, and it’s a role that should not exist. The issue isn’t what he can do to improve the economy… but that he has any function in the economy whatsoever!