Go to a conference these days and you are bound to hear about inflation. Not just any inflation, but a period of sustained high inflation.
This is remarkable, because the voices warning about the risks of deflation seem to be just as loud.
Recent economic reports from the United States showed the housing market is weakening and inflation is slowing.
But still the rumours about impending inflation continue to pop up.
The story goes that several developed countries will not be able to pay off the huge debts they have amassed.
But rather than default, these countries might choose to inflate their way out of their problems.
The idea is that after a few years of higher inflation, the value of the money owed has fallen strongly against the value of the money coming in, making repayments much more affordable.
"If we could wake up tomorrow and the Federal Reserve said 'okay, we are going to target an inflation rate of 5 per cent for the next three or four years' and if the markets could adjust to that overnight, that would be one way out of the whole malaise," Frontier senior consultant Rob Hogg said last week at the Australian Super Investment (ASI) Conference.
"But of course doing that is an incredibly tricky thing," he said.
The rumours have been around for a while, but gathered steam after Harvard University professor of economics and former chief economist at the IMF, Kenneth Rogoff, nonchalantly suggested inflation as the best of many very bad options earlier this month.
"Given the massive de-leveraging of public and private sector debt that lies ahead, and my continuing cynicism about the US political and legal system's capacity to facilitate workouts, two or three years of slightly elevated inflation strikes me as the best of many very bad options, and far preferable to deflation," he said.
His remark was picked up by economist and 2008 Nobel Prize winner Paul Krugman, who embraced the suggestion of a burst of inflation to get the US out of its slump with agreement, but said pursuing this strategy has far-reaching consequences.
"If central banks can gain any leverage at all, it's only by credibly committing to inflation over a fairly sustained period," he said. "Inflation can be helpful in getting out of a prolonged slump - but getting that inflation probably requires a combination of loose monetary policy with strong fiscal stimulus," Krugman said.
This would have dramatic consequences for investment portfolios. Bonds would become much less attractive as their yields are likely to shrink dramatically, while existing bond investments would have to be held to maturity, reducing overall liquidity.
Equity investments will also be problematic, as volatility is likely to remain high over the next few years and markets are likely to end up flat.
Lazard Asset Management senior managing director Rob Prugue told delegates at the ASI Conference this means static asset allocation strategies are useless.
"If we do move to this regime of uncertainty, markets can become trendless, but highly volatile over the medium to long term," Prugue argued. "Just look back at last year - the markets have been everywhere. The securities market line is now sideways, where investors are no longer compensated for taking additional units of risk. The question is how are we going to achieve our returns?"
Prugue suggested more flexible asset allocation strategies, such as dynamic or tactical asset allocation, but said this is not for everyone.
Gold seems to be one of the few hiding places if you are not one of the sceptics who argue the price of the precious metal is as random as maple syrup on bacon is to non-Canadians.
But for most fund managers, gold can be only a marginal investment in portfolios.
No wonder people are concerned about the possibility of inflation, even if it is nowhere in sight.
Although the suggestion of deliberate high inflation seems far-fetched to some, it would not be the first time this has led the way out of a debt burden.
"That is how Britain got out of its debt in the 1970s," Ruffer LLP chief executive Jonathan Ruffer said at the recent MLC Implemented Consulting Conference.
"Britain got out of a debt dislocation by compromising its currency ... entirely by accident," he said.
The fact it has been a long time since a period of high inflation occurred does not mean it will not happen again, he argued.
"It has been 50 years since a first edition currency properly lost value, and so people will underestimate the risk," he said. "But I'm a fund manager and what I need to do is not to purvey to you an eloquent argument. The real question is: am I right?"
After all, Ruffer said, Germany is currently buying gold.
