The furnace fueling any economic recovery will likely be running on U.S. dollars if plans circulating in the government materialize. Luckily, world stock markets are still struggling and the dollar is seen as a safe-haven for money. The result has been extremely low Treasury yields during note auctions. However, the tables may turn sharply when the world’s economies begin to recover. The combination of trillions of new dollars in circulation along with the inevitable flight from the dollar will increase inflation.

One way to invest in this inevitable inflation is by purchasing Treasury Inflation Protected Securities, or TIPS. These safe government securities pay returns that are adjusted to the consumer price index in order to reduce inflation risk. The premiums on these bonds will therefore increase in line with rises in inflation. iShares Barclays TIPS Bond Fund ETF (NYSE: TIP) is an exchange traded fund that trades these TIPS and makes them more accessible for investors. Those confident in a bearish dollar may want to take a TIP!

Abigail Adams National Bancorp Inc. (NDAQ: AANB) received a $3.45 per share all cash takeover offer from an activist shareholder on January 29th, but investors don’t seem to be taking notice. PS D’Iberville Limited Partnership made the offer after the company agreed to and then subsequently rejected its request to review the firm’s books to conduct due diligence.

Here’s a copy of the letter:

Your letter dated January 28, 2008 (2009 is the correct date) is unacceptable.  Your letter, dated January 23 2009, specifically stated that P.S. D’IBERVILLE LIMITED PARTNERSHIP could inspect the items requested in our letter of September 26, 2008.  You confirmed, by telephone, that you would allow P.S. D’IBERVILLE LIMITED PARTNERSHIP to inspect the items requested and would not cancel the appointment.  P.S. D’IBERVILLE LIMITED PARTNERSHIP demands that you allow us to inspect all the items.  Given your unwillingness to allow us to review all of the books as previously indicated and your rejection of our past offers to assist, we are proposing instead that P.S. D’IBERVILLE LIMITED PARTNERSHIP pursue an acquisition of all the shares of Abigail Adams National Bancorp, Inc (AANB).  We propose a price of $3.45 all cash per share.  We have existing cash resources available to fund this transaction and are prepared to move as quickly as necessary.

We believe time is of the essence.  You have already wasted valuable time to increase shareholder value since our letter of August 19, 2008.  Your customers, regulators and employees will appreciate immediate action.  This non-binding proposal is subject to the negotiation of mutually satisfactory definitive agreements, regulatory approval, and the completion of customary due diligence, all of which could be progressed and finalized without delay.

We have already made our plane reservations to visit with you on Monday, Feb. 2, 2009.  Failure to confirm by Friday, January 30, 2009, at 4:00 pm that all the records requested in our September 26, 2008 letter will be available for our inspection will be construed to be a breach of your fiduciary duty and obligations pursuant to statute and we will not show up Monday, February 2, 2009.  If you choose not to let us review all of the materials on February 2, 2009, please let us know when we can complete our due diligence inspection.

It is important to remember that non-binding takeover offers are not guarantees, particularly when management doesn’t appear to be interested in selling the company. As a result, shares continue to trade at $2.15 per share despite the presence of a $3.45 per share offer. However, this could represent an opportunity for other activist investors are arbitreurs.

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Amylin Pharmaceuticals (NDAQ: AMLN) shares are trading well off of their 52-week highs after two amid complaints from two activist investors. Billionaire activist Carl Icahn recently nominated his own slate of directors while Eastbourne Capital Management, which owns approximately 12.5% of the company’s shares, followed suit and nominated its own slate to compliment that of Icahn, according to a Schedule 13D/A filing with the SEC.

“We have been a long-term shareholder in Amylin based on our belief that the company has unmatched potential, but we believe this potential has been squandered and has resulted in significant shareholder loss,” said Eastbourne’s Rick Barry. “It is clear that we are not alone in our belief that significant change at the board level is required to ensure that the proper steps are taken to maximize the commercial value of Amylin’s assets.”

The hedge fund noted that Amylin has lost nearly 80% of its market value since its all-time high price on October 5, 2007. Despite this decline and history of disappointing results, however, the fund continues to invest in Amylin because the company’s products could deliver significant shareholder value if managed properly. So, while they have not lost faith in the potential of Amylin’s products and pipeline, they have lost confidence in Amylin’s leadership to execute an operational strategy in the best interest of shareholders.

Clearly, this is a situation worth watching when to large activist investors, including Carl Icahn, get involved to unlock value.

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Celgene Corporation (CELG)