Nobody knows. And they all know it.

PUT 100 economists or 100 investment gurus or 100 politicians in a room and, guess what, you can never find that machine-gun when you need it. Also, you can guarantee that, if you listened to each and every one of them (God help you) you would be none the wiser about:

• What and who got us into the current economic predicament.
• What the best ways are to get us out of said predicament.
• Whether "quantitative easing" is a good or bad thing.

So what does this summary of the bleedin' obvious have to do with you and your financial situation? Well, this is the punchline:

Nobody knows what the heck is going on. The "experts" who are now going to save the world (their words, not mine) are the same "experts" who were running the show before (OK, some of the masks have changed but underneath they remain the same).

How is this lack of comprehension, this pervasive feeling of uncertainty, manifesting itself in terms of actual, real human beings? Well, a manifestation of this is the recurring theme that comes up in conversations with our clients - the "Deflation or Inflation?" debate.

Western governments are hell bent on printing money. This is the One Size Fits-All Solution. These solutions don't tend to work, as Eire, Spain, Greece et all are finding out, tied as they are to the One Size Fits-All EU base rate Solution, which is just the German base rate, designed to micro-manage the German economy and no-one elses, really.

So with the printing presses off and running and money gushing out at simply amazing volumes, what does this mean for deflation or inflation? Because, historically, printing money has been a sure-fire way to stoke inflation. It may not appear for a number of years but appear it will.

Or will it? Numerous "experts" fear we are entering a period of deflation, a woeful ill that has ailed Japan for well over a decade or so. Never mind the smell of burning oil from the money printing presses and the rocketing share price of Government Print Machines R Us plc. Quantitative easing or not, we are in a slump, no-one's got any money they actually want to lend or spend, ergo unemployment will continue to rise, house and household goods prices have to fall etc.

So The "Deflation v Inflation" conversation has two routes. The first one is

Client: "Nick, clearly inflation is going to come back big-time. Load my portfolio with Index Linked Gilts. What do you think?"
Nick: "Sure, great idea. Let's do it."

And the second route is

Client: "Nick, clearly we are in a for a long period of deflation. Load my portfolio with Government Gilts. What do you think?"
Nick: "Sure, great idea. Let's do it."

Of course, the skill is to have the above conversation with different clients, otherwise they may feel i am not honouring their question with enough gravitas.

The fact is that no-one knows. I certainly don't.

But I do know that, if the hundreds of thousands of economists, market analysts and computer algorithms are saying inflation is going to be a scourge for the next xx years, then these opinions will be driving large amounts of money into index-linked gilts. And the current price of index-linked gilts already reflects this money pouring in. It's already in the price.

Likewise with all the "experts" saying that inflation is dead and deflation is the new "black". Government gilt yields are extremely low and will stay low, as money pours in from the deflation-doves. It's already in the price.

No-one knows. So for the sake of your future financial prosperity, own both bond asset types. Diversify. Use low-cost passive funds or ETFs to have exposure to plain Government Gilts and Index-Linked Gilts. Buy and hold these through the cycle. And the next cycle. And the next.

Do that and at least you know you don't know and - more importantly - you really don't need to.

{The above is solely the opinion of Nick Lincoln. It is not individual financial advice and should never be taken as such. If you wish to discuss the issues raised in more detail, please make contact with Nick. If you ignore this smallprint and act on his opinion(s) without first seeking financial advice or reading at least 100 pages of Key Features Documents containing numerous risk warnings, you may well be struck down by lightning}