Few, if any, Fed watchers are expecting the U.S. central bank to raise rates when they announce their interest rate decision this afternoon.  But most do expect the Fed to start tightening sometime in the foreseeable future.

Michael Pento, chief market strategist at Delta Global Advisors, is not one of them.  Pento is confident the Fed’s next move will be to ease rates.  “Ben Bernanke is a student of the Great Depression and he doesn’t want his tenure to be marked by the second Greater Depression,” he says.  “So he will do whatever he can to boost money supply and fight deflation.”

How will he do that with rates already at 0-0.25%?

Obviously, they can’t lower rates. The Fed is also reluctant to start buying more mortgage-backed securities so soon after ending that program. The alternative, Pento says, is for the Fed to stop paying interest on excess reserves, a move that will drive banks to lend instead of sit on their cash.

Contrary to popular belief, that’s exactly what the economy doesn’t need, according to Pento.  Increased lending “will bring money supply growth rates through the roof and we’ll have an inflationary recession/depression,” Pento forecasts.  Instead of what Pento believes is a necessary evil – a short-term deflationary depression.  "That’s the real prescription, that’s the only cure," for our debt problem, he says, even if it's a painful one.

Since Pento is sure Bernanke wont’ heed his advice, he recommends investors hedge their portfolios’ ”towards the inflationary scenario” by buying gold and short-term Treasuries.  If he’s right about Bernanke’s policies, he says the appreciation in gold prices will accelerate.