Because of their low yields, the real purchasing power of Treasuries may decline when inflation rises.

One way to deal with inflation is to buy inflation-protected securities, such as Treasury Inflation-Protected Securities(TIPS) in the U.S. and Index-linked Gilts in the U.K. These securities provide a degree of inflation protection as their returns are correlated with the level of inflation. $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $S&P National Amt-Free Muni Bd Ishares (MUB.US)$ $Vanguard Total International Bond ETF (BNDX.US)$ $Vanguard Total International Bond ETF (BNDX.US)$ $Short-Treasury Bond Ishares (SHV.US)$