Bill Gates is bullish on inflation.

He’s putting tens of millions of dollars into the Western Asset-Claymore Inflation-Linked Securities & Income Fund, which rises with consumer prices over the long term. The fund is managed by Legg Mason’s Western Asset unit in Pasadena, Calif.

Through his Cascade Investment vehicle, Gates has been buying the inflation fund (ticker WIA) at least since June, when he first declared ownership of more than 10 percent of its shares. In mid-June he owned 2.9 million shares worth about $36 million.

Since then he kept plowing in money. On Oct. 16 he owned 4.2 million shares worth $41 million.

The shares have fallen from $12.50 in July to $10.30 lately, as the Treasury’s inflation-protection bonds, which make up most of the fund, have lost value. So-called TIPS were a hot product when oil was $140 a barrel.

But analysts expect the economic slowdown to reduce inflation in the near future or maybe even introduce a period of falling consumer prices. That’s not to say, however, that inflation isn’t a threat. With governments around the world fighting the crisis by printing money, rising prices are the probable long-term outcome.

The Western Asset-Claymore fund is closed-end, which means the internal value of its assets can diverge sharply from its market price. Last week the portfolio was worth about 10 percent more than the share price. So Gates is hedging against inflation and buying $1 worth of assets for 90 cents. Smart, but he's unlikely to make much money for a long time.