By Chip Hanlon

With gold above $960, the U.S. dollar breaking to new all-time lows and food inflation still soaring, some might still try to debate the existence of inflation were it not for the rise we have finally begun to see in official CPI statistics.

However, despite the fact that consumer prices are "officially" on the rise, as are producer prices, these numbers still might be under-stated, according to an outstanding editorial today over at the Wall Street Journal. If you haven't read it, I strongly encourage you to check out, "Inflation May Be Worse Than We Think," by David Ranson.

To those who have been talking about this for ages, as well as those who have been invested in inflation-oriented asset classes, this is no new story.  Quite the contrary; we wonder why it has taken so long to figure this out.  That said, investors who are now just waking up to the fact that inflation is for real, commodities and other hard assets are likely still worth adding to your portfolios.

Consider today's words from the Fed itself, 'With inflation expectations anticipated to remain reasonably well anchored, energy and other commodity prices expected to flatten out, and pressures on resources likely to ease, monetary policy makers generally have expected inflation to moderate somewhat in 2008 and 2009."

Inflation is expected to moderate?!  Why, exactly?  After all, the Fed today made it clear it intends to keep cutting rates despite ramapnt inflation.  Craziness.

For a while, I actually thought Bernanke was trying to fight his instincts and hold the line, as he seemded last year to understand that inflation was a threat and he disappointed Wall Street by being slow to cut rates.  Once he got on the rate cutting train, though, he jumped on with both feet, baby!  Helicopter Ben now has the cyclic pushed all the way forward and can't seem to recognize the inflation washing straight down on his from his rotor!

You know, if they want people to have confidence in markets, they really shouldn't televise these congressional hearings with Ben Bernanke.  The guy inspires no confidence and it's plain to see that most members of Congress questioning him are economic illiterates-- it looked like the Dow and the dollar ticked down all morning with each successive word.  Ugh.

At least investors can do something to protect themselves: they can stay the course in hard assets and related investments.