by KYW's Salil Gutt

In case you hadn't noticed, inflation is back. A scourge in the 1980's, non-existent in the 90's, inflation is making a comeback. The outlook for investors is not pretty. Here's how to navigate in inflationary waters.

The Federal Reserve cut interest rates sharply in order to boost the economy, to bailout Wall Street say some critics.

Mr. Bernanke has signalled the rate cutting is over. Once the economy recovers the Fed will turn its attention to fighting its real enemy, inflation. And it will use the only tool it has.  Keep on increasing rates until it whips the problem into shape.

The U.S. is not the only country facing this problem. Central bankers around the world will join this battle.

The message here for investors. Don't lock in CD rates longer than two years. Bond fund investors later this year should start switching from long term to intermediate and short term maturities in order to have ready cash to buy when rates go up. And finally, bringing inflation under control will take the wind out of gold and commodity prices.