“We do not want a disclosable event.” Thus spoke former Treasury Secretary Hank Paulson to Bank of America CEO, Ken Lewis, last December.

The question facing every investor today, and the one that could wield a very large influence over one’s investment fortunes – is whether deflation or inflation will hold sway during the next couple of years.

Inflation threats are right around the corner. Eric Fry of the Rude Awakening examines 6 ETFs and how to prepare for the “near-certain arrival of inflation.” He says now is the time to be wary of price increases and these ETFs act as an “insurance policy” to hedge against them.

While the market panics about deflation, Eric Fry says forward-looking investors can profit by swimming against the tide. The Inflation-protected Treasury bond ETF (NYSE:TIP) has never been cheaper, meaning a great chance for gains as the government’s mega bailouts feed through to higher prices.

Should we follow Warren Buffett back into the stock market? Eric Fry thinks so. But the market is still volatile. More short-term losses are on the cards. Eric recommends six beaten-down companies that offer high yields and the potential for a strong recovery.

Since whispers of a Lehman Bros collapse started to circulate almost two weeks ago the US dollar index has slumped 4.8%. And the $700 billion Paulson bailout plan has done little to shore up dollar strength.

There are “fears that the package may cost too much, drive up inflation, swell the already bloated U.S. deficit and hurt the ailing economy,” reports AP.

Eric Fry says his investment strategy is based on a simple formula: “Sell the dollar, sell the dollar and sell the dollar.” And as the buck gets whacked, so will American stocks and bonds. On the other hand, foreign assets and commodities should soar…

Yesterday evening, the Fed eventually moved on an $85 billion bailout of giant insurer AIG (NYSE:AIG) to prevent a second major US bankruptcy in as many days. The bailout – the third this year if you include the Fed-backed buyout of Bear Stearns by JPMorgan Chase (NYSE:JPM) – is the equivalent of a $283 loan to AIG from each taxpaying American.

In April, Treasury Secretary Hank Paulson called the bottom in the financial sector. He said: “I think were closer to the end of the [credit crisis] than we are to the beginning.

“The Rude Awakening’s editorial director Eric Fry thinks Hank was way off the mark. Eric says financial stocks will by a buy one day, but he doesn’t believe we are looking at a bottom now.

In the second part of The End of Peak Greed, Eric says investors are better off putting their money into companies that are making the world go around than betting on financials, which are sending it not a tailspin.