As retirement nears, millions of Baby Boomers are scrambling for deck chairs on the Titanic. For about 30 years now I have been watching a major financial disaster developing. Its contributing factors include the shaky financial foundations of Social Security and Medicare, compounded by most Americans' lack of financial education and entitlement mentality.

As a result, my investment strategy is to get out of anything that's "paper with ink on it." I explain what this means and what investments I favor later in this article.

Speed and Agility Will Win the Day

But first, let me discuss the iceberg known as Financial Excess, which I believe lies before the SS U.S.A. In the last three decades, we as a nation have only increased our excesses, accelerated our mistakes, and mismanaged America's wealth. Turning the ship's wheel at this time -- hard left or hard right -- will do no good. It's too late.

So it's not a good time to be captain of SS U.S.A., or the skipper of SS Big Mutual Fund or SS Pension Plan. In the coming years, I believe big will not be better.

Instead, for many of us, it's better to be a small, disciplined investor. I believe speed, financial education, and maneuverability will prove to be better than size. It'll be far better to be in a well-stocked lifeboat than be treading water with millions of pensioners and laid-off workers, many with their party hats still on.

Why so pessimistic? Well, I would rather be known as a realist. Most of us are aware of the problems ahead. Some are:

1. A pervasive entitlement mentality.

It's not just the poor who are expecting a government hand out. Everyone from senators to farmers and retirees expect it, too. Unfortunately, this problem is not an issue for my generation, the Baby Boomers, but will fall squarely on the shoulders of the children and grandchildren of Baby Boomers.

2. Social Security is a small problem when compared to Medicare.

As of 2004, Social Security was a $10 trillion off-balance-sheet liability. Medicare is a $64 trillion liability. The Social Security fund will begin to run in the red around 2015. The Medicare fund is already operating in the red, a situation that started in 1992. The combined $74 trillion off-balance sheet IOU to Americans is more money than is available in all the stock and bond markets of the world. This means life or death will be determined by your wallet, not your doctor.

3. A lack of financial education.

Many people do not know such basic realities as:

A 401(k) is not a retirement plan (it's a savings plan).

Bonds aren't safe.

Saving money is risky.

Why mutual funds have such low returns.

What is inflation.

Why workers are taxed more than owners.

Why pensions are disappearing -- legally.

People know there's a problem, yet they continue to do the same things. Today millions of people have trillions of dollars riding in the stock market, their homes, savings plans, and bonds -- financial assets that worked in the past but probably won't work when the SS U.S.A. hits the iceberg.

Investing in Tangible Value

As an investor, I'm investing against the U.S. dollar. Let me be clear: I'm not investing against the U.S. -- America is a rich, productive country. But our dollar is toast. Those who have followed my articles know that in 1971, our dollar stopped being money and became a currency, a piece of paper with ink on it (see "Why Savers Are Losers").

In my opinion, that means getting out of anything else that's "paper with ink on it" -- anything backed by the full faith and confidence of the SS U.S.A. That means I'm very suspicious of stocks, bonds, savings, and mutual funds, especially if they're U.S. dependent. Although I love real estate, I'm suspicious of any piece of property that doesn't generate cash flow today. I don't invest in future appreciation of real estate -- not today, at least.

Today, I invest in assets with tangible value, especially assets that go up in price as the dollar's purchasing power sinks. Today, I have large positions in gold, silver, and oil.

For the small investor, I believe buying silver coins is a safe bet. As the dollar drops, silver will hold its value or go up. I don't recommend buying coins for numismatic value (rarity). A friend has his son buy one silver dollar a week instead of saving money in the bank. As I write this, that's worth about $12 a week. He keeps the coins in a safe-deposit box. It's not big investing -- but it's a great habit.

In today's economic environment, it's better to save silver than to save paper with ink on it, and that includes cash, mutual funds, stocks, and bonds. If it seems unpatriotic to short the dollar and other forms of U.S. paper, then buy a few U.S. silver and gold coins. While I'm bullish on America, I've been very bearish on our dollar for years.