The simple explanation for why you're paying more for everything is that the money supply has been overexpanded. This means that too much money has been printed and debt has become too accessible. When the money supply is expanded more than the economy has actually grown -- meaning more than the growth rate of products and services -- you generally experience inflation, or rising prices.

The money supply has been overexpanded for some time now. The bad news is that it is WAY overexpanded, and so the inflation we've seen so far is just the beginning. The stock market bubble of 1999 and 2000, the housing bubble of 2004, and the commodities bubble of 2008 are all the result of an overexpanded money supply; the money has simply transferred from one market to another, pushing prices through the roof in whatever market it is in. The commodities market -- i.e. oil, gold, grains, currencies -- tends to create the most "real" economic problems, as it pushes the price of everyday goods up, which is why the economic pains are being felt more now than before.

A deeper understanding of this problem requires understanding how central banking (meaning a single entity that controls the money supply), coupled with a currency policy that does not place any restrictions on how much currency can be printed (aka a fiat currency policy), inevitably results in hyperinflation and a destruction of the middle class -- and that this is often done intentionally to transfer wealth to the ruling class, and to finance an imperialist agenda (such as the current agenda of the US federal government). Our course on the Federal Reserve is meant to provide an education about these matters.

So What's the Solution?

The simple solution for individuals is to stock up on real goods NOW. Storable food is one thing I highly recommend, as if hyperinflation gets really bad, food prices will go through the roof (the government will likely respond with price controls and food regulation, which will only create more problems). It is important to note that the value of your money is falling, and so prices are rising. Buying today is thus cheaper than buying tomorrow (with the exception of some assets, most notably housing prices, which will most likely continue to fall).

For a more radical explanation as to how society will be rebuilt, see our previous article on virtual currencies.