Experts Fear U.S. Will Suffer Zimbabwe-Level Inflation

Tuesday, June 2, 2009 10:15 AM

By: Julie Crawshaw

Investing experts now worry that inflation in the United States will approach that in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates when it should.

Zimbabwe’s inflation rate was last reported at 231 million percent in July.

The Fed has kept rates at or near zero and has promised to continue to keep rates low for as long as necessary. According to the last Fed minutes, members were still concerned about deflation, not inflation.

"I am 100 percent sure that the U.S. will go into hyperinflation," contrarian guru Marc Faber told Bloomberg News.

"The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate."

Faber doesn’t think, however, that gold will run up right away.

“I never sold gold and I’m still buying gold,â€