Investors with only moderately addled memories will remember chatter common to the rallies in the late-nineties and mid-noughties. Many said loose monetary policy was no longer transmitting itself into higher wages and consumer prices. Rather, inflation was appearing in asset classes such as equities and property.

Of course, this confuses monetary phenomena with bubbles. But do not be surprised if similar arguments return now that low interest rates are coinciding with rampant equity markets and the odd sign of life in housing. A far worse sin, however, would be if investors reversed the causality and were buying equities as an inflation hedge. This is oft-heard advice. In theory at least, provided that companies can pass higher prices on to their customers, valuations should be indifferent to inflation because real future cash flows should be discounted at a real interest rate.