Inflation bet on BHP Billiton (BHP)

"Longer-term, I have no doubt that a ruinous inflationary cycle is on the way," says Jim Powell. In Global Changes & Opportunities, he takes a look at BHP Billiton (NYSE:BHP).

"Banks are currently hoarding the funds they are receiving from the Fed. That practice will end once the economic outlook improves and lenders feel it’s safe to make credit available again.

"When the vaults swing open, I think the flood of money will trigger the sharpest inflationary run-up we have ever seen.

"Deflation has gained so much momentum that I think it will continue – and probably get worse – for several months.

"However, being unprepared for inflation (or a possible dollar devaluation) is a much bigger threat to your wealths. That’s why I urge you to make additional inflation investments now while prices are still attractive.

"One stock that looks very good to me is BHP Billiton. The company pays a 2.7% dividend from earnings that come primarily from foreign markets.

"The offshore exposure gives U.S. investors at least a partial hedge against a falling dollar. The prospect of long-term capital gains sweetens the appeal of this Australia-based blue chip company."

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