Contrarian guru Marc Faber predicts we'll soon see inflation of 10 to 20 percent.
The numbers will rise so fast because the government "massively" understates the country's inflation rate, Faber said.
To get a true reading he advises ditching core inflation numbers, including the Consumer Price Index.
"It's a lie what they publish," Faber told CNBC.
"If you underweigh education costs, and if you underweigh health care costs, then you come to a totally different result," he said.
Since the creation of the Federal Reserve Bank in 1913, the dollar has lost 95 percent of its purchasing power, Faber said.
“It took 100 years to lose 95 percent (but) I think the next 94-percent loss in purchasing power will happen very quickly,” he said.
In such a volatile market, Faber thinks the safest place to invest is in equities or assets, even real estate.
"I'm not very bullish about real estate prices in the U.S., but I'd rather be in real estate than in 30-year U.S. bonds," he said.
U.S. consumer prices edged up in May on higher gasoline prices, but fell over the past 12 months by the most since 1950, a sign inflation is no threat as the country fights a brutal recession, Reuters reported.
Compared to the same period last year, however, consumer prices fell 1.3 percent, the largest decline since April 1950.
"These numbers … clearly show that at least for now the immediate concerns over inflation are not justified," Marc Pado, market strategist at Cantor Fitzgerald, told Reuters.
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