I have studied inflation’s effect on economies and consider myself an expert on the subject. I have written extensively on the subject and have given speeches on how people can protect themselves from the coming boom in inflation. Recently, on eBay I purchased a bunch of authentic 100 trillion dollar bank notes from Zimbabwe for a few dollars each.

I give them out to my friends and family, and explain that they need to protect themselves against inflation. They get a real kick out of it and this opens their eyes to the fact that paper money is not backed by anything.

Zimbabwe’s annual inflation rate peaked at 489 billion percent in September 2008 and the Zimbabwe dollar became literally worthless.

Will America ever experience this type of inflation? I don’t think so… Our government has maintained steady price controls for over 30 years.

However, the U.S. could see inflation levels like we saw in the 1970s and we could easily experience 10% to 20% inflation rates or more…

Recently, America’s Federal Reserve has been easing, or decreasing interest rates, in an attempt to restart economic growth and get out of this recession. But, it’s the Fed’s main job to keep inflation in check. If inflation goes too high they will tighten, or increase interest rates in an attempt to head off future inflation.

We know inflation is coming due to massive federal spending—and next will come higher interest rates. Keep in mind that interest rates hit 18% in the 1970s, under similar circumstances.

High inflation and high interest rates both have negative consequences for the economy. The bad thing about high inflation is that it takes away your purchasing power. Then you have inflation’s evil side kick-higher interest rates, which slows down economic growth.

We are entering a tricky period and you need to be prepared. Invest in commodities and make sure to lock in that 30-year fixed rate mortgage at today’s low 5% rate.

Source: Pick Your Poison: Inflation or Higher Interest Rates