The inflation monster is sleeping soundly, snoring away, and everyone hopes he'll never wake up.

He will, of course. Not anytime soon; consumer inflation will probably stay tame for months and months. But when the inflation beast finally does awake, he just might get nasty.

This column is for worrywarts. It's for people who see a couple of trillion dollars in fiscal and monetary stimulus knocking around in the economy, amid rock-bottom interest rates, and worry that this means inflation is coming.

Worrywarts have no faith in the Federal Reserve or the administration of President Barack Obama. They think Washington will turn chicken as the 2010 mid-term elections approach and fail to withdraw that stimulus as the economy heats up again, setting the stage for higher prices and driving up interest rates.

So, let's look at some strategies for the day when prices and rates start to rise again:

— Sit on your money. You could hedge against higher interest rates by plopping part of your nest egg in the bank, figuring that you'll grab a more interesting investment when rates are higher. The 2 percent you could get in a one-year bank CD is actually higher than the current inflation rate.

— Troll for dividends. Look for stocks that have a long history of raising their dividends, says Carol Milius Lippman, senior portfolio strategist at Wells Fargo Advisors in St. Louis. They tend to hold up well in a rising rate environment.

On her list are St. Louis homies Emerson and Commerce Bank. Commerce has raised dividends every year for 40 years, she notes.

Such picks are getting fewer. This year, 566 companies have increased their dividends while 749 have cut or eliminated them, according to Standard & Poor's.

— Gold is a traditional hedge against economic chaos and inflation. The problem is that the price is up by 24 percent this year, and it's been setting new highs.

That's partly because of a case of the inflation willies among foreign investors. It's also a reaction to the falling dollar. India's central bank bought 200 metric tons of the shiny stuff last week. There's concern that other central banks may shift foreign reserves out of dollars and into gold, pushing the price up.

Finally, ordinary Indians and Chinese are richer these days, which increases their gold purchases, and American gold-sellers have been beating the advertising drums. "Gold is one of the few commodities that has its own commercials," says Gary Thayer, chief macro strategist at Wells Fargo Advisors.

Could gold go even higher? Who knows? But some of the glitter is certainly gone off because of the soaring price.

You don't have to hold the actual metal. Some mutual funds invest in gold-related companies. Analysts at Standard & Poor's like Franklin Gold & Precious Metals (FKRCX), First Eagle Gold (FEGIX), Tocqueville Gold (TGLDX), Oppenheimer Gold & Special Minerals (OPGSX) and Van Eck International Investors Gold (INIVX).

— Treasury Inflation-Protected Securities, or TIPS, provide an inflation guarantee from Uncle Sam. TIPS pay measly interest, currently about 1.25 percent on a five-year bond. But the Treasury also adjusts the principal value of the bond to reflect inflation. Thus, if you buy a $1,000 bond and inflation rises 2 percent this year, the face value of your bond will rise to $1,020.

This produces an oddity at tax time called "phantom interest." You'll be taxed on the interest, which you'd expect. But you'll also be taxed on the inflationary increase in the value of the bond, even though you haven't yet collected a dime of it. That's why TIPs work best in a tax-deferred retirement account.

TIPS come in maturities of 5, 10, 20 and 30 years. You can buy them directly from the U.S. Treasury through Treasurydirect.gov. This is the best route if you plan to hold them to maturity.

You can also buy into TIPS-heavy mutual funds and exchange traded funds. Morningstar, the fund analysis firm, likes Vanguard Inflation-Protected Securities (VIPSX) and Harbor Real Return HARRX.

TIPs mutual funds are up 10 percent so far this year. That beat plain-vanilla intermediate government funds, which are up 5 percent.

The reason certainly isn't inflation — consumer prices are actually down 1.5 percent this year. The reason is that the market expected inflation to return, and that drove up the value of TIPS. "That's all it is," says Ken Volpert, a principal at the Vanguard Group and co-manager of its $22 billion TIPS bond fund.

A TIPs bond fund is a bizarre beast. Like all bond funds, they react to changes in interest rates. When rates go up, the share price of the fund goes down, and vice versa. Of course, TIPs funds also react to inflation, because the value of TIPS bonds rises with consumer prices.

But the market doesn't wait for inflation to rear its ugly head. As we discovered this year, funds also react to inflationary expectations.

— There's no hurry about any of this. The Federal Reserve predicted last week that inflation will be subdued for "some time" and that it will hold down short-term interest rates for an "extended period."

We might see higher interest rates by mid 2010 as the economy gains some steam. Economists at Wells Fargo think inflation won't rear its head for about 18 months.

Then again, maybe the Fed and the Treasury will get things right, and the monster will snooze on forever.