Throughout the world consumers and investors are taking a beating, says Bill Bonner.

In some countries soaring inflation is eroding consumer purchasing power. In others tumbling asset prices are destroying investor wealth. In most both are happening at once.

It’s a major headache for central banks. Bill says the Fed should follow the ECB in hiking rates, even if it means an economic slump…

Editor’s Note: John Williams at ShadowStats.com warns that major foreign dollar holders could be about to dump the dollar. Meanwhile, a systematic crash in the threadbare US banking system is a distinct possibility thanks to the $391 billion in losses already suffered by US banks as a result of mortgage-related writedowns. All this, says The Mogambo Guru, means good news for gold and silver and a potential meltdown for US stocks, bonds and, of course, the dollar…

Editor’s Note: The 1930s have nothing on the depression we’re about to enter, says commodities expert Doug Casey. Interest rates are too low and currencies are being kept artificially high. It can only lead to one thing: the decline and fall of the American empire.

Billionaire investor Eli Broad shares Doug’s view, although he puts it a little more mildly. He said yesterday that the US economy is in the worst recession since World War II and a recovery in the housing market is “several years” away.

The machinations of the US Federal Reserve are uppermost in the minds of investors — and the media. The Fed is in a jam. On the one side slowing growth and the specter of the credit crisis. Rising inflation on the other.

Editor’s Note: Money Morning’s William Patalon III says crude oil prices above $142 a barrel and the 20% slump in the Dow Jones Industrial Average (DJI) since October are the chief concerns for investors.