Martin Hennecke, associate director at investment and financial advice firm Tyche says that investors should take a closer look at how much recovery has occurred in the United States and other Western countries.

He questions whether those countries are generating a real recovery. “We are not seeing any growth in the United States, let alone any sustainable growth…The U.S. economy has never really recovered. They have just been throwing money at the problems, been bailing out the banks,” he recently told CNBC.

Hennecke suggest that the bond market could be hit with the next crisis, especially long-term U.S. Treasuries and even European sovereign bonds and currencies. "They are very much at risk now with this huge budget deficit."

High rates of inflation will sweep the U.S., United Kingdom and other countries according to Hennecke. “With the start of (the) sovereign bond crisis across the Western countries that we have seen in Greece and are starting to see in Spain…across the euro zone there's absolute disasters there.”

“We are going to see a sovereign bond crisis probably leading to very high or even hyper inflation in most Western countries and that could actually — ironically, theoretically — even drive up the markets because if you have high inflation, anything with any tangible assets behind it via commodities, companies…could even rise," Hennecke said.

Economist Diane Swonk, chief economist at Mesirow Financial says “The Fed remains more concerned about the sustainability of the recovery and disinflation than accelerating inflation in the near-term. They are in no hurry to raise rates, nothing before the fourth quarter or later…And their position is justified."

Side Note:
Anyone who has recently traveled to Europe can testify to the impact of flooding the money supply with freshly printed US dollars. The rate of exchange to other Western currencies has made foreign travel increasingly expensive. Conversely, travel to the US has become a real bargain. This is one face of inflation that has not yet impacted us domestically. However, the effects will be released as the Fed loosens interest rates to attract the international lenders who are buying our debt.