In the US, households were de-leveraging, and dealing with a 30 to 40 per cent collapse in house prices. The weak recovery in the US was due more to a lack of demand from households than constrained supply from banks.

Doyle pointed to the 1970s as having many similarities to the present, and cited research by Schroders and by Datastream which showed the best-performing classes correlated with inflation from 1957 to 1981 were, in order, T-bills, gold, CRB Spot Index, US government bonds, and finally the S&P500.

However, “timing is critical when you’re thinking about commodities as an inflation hedge”, he warned. He pointed to Datastream research which showed that “inflation has to be 18 per cent per annum for the next five years to validate the price of gold … so make sure you get your timing right”.

In the disinflation climate of the 1980s and ’90s, the “winners” were T-bills, followed by gold, and then the CRB Spot Index. But, again, timing was critical.

Inflation-linked bonds were not a good bet, Doyle said, and were expensive. “If you’re worried about inflation, you’re far better off being in cash. When you’re worried about disinflation, probably you’re far better off to be in bonds.”

Schroders’ fixed income and multi-asset strategy at present includes allocations to the following:

Debt/Europe and policy uncertainty: cash, Australian sovereign bonds, investment grade credit, yield curves, volatility;

Inflation: cash, corporate (bank) ILDs, volatility;

China: global developed market equities, foreign currency, Australian sovereign bonds, volatility; and

Australia: Australian duration, global developed market equities, cash.