So many times lines from the Princess Bride are appropriate, such as, never get involved in a land war in Asia. But here, the line is I do not think that word means what you think it does. Inflation pops up in many forms; in the 70's, when commodity prices increased and everyone agrees we had inflation, stock prices declined, substantially. The inflation/deflation argument cannot be settled by looking at one particular asset, or asset class. The rising tide of inflation does not lift all boats equally.
When prices move in one category, they often move in an opposite direction in another category. Witness, for example, motor gasoline prices and resale values on Hummers. Likewise, some asset classes move in tandem, such as financial stocks and the real estate used to house those financial companies (one hesitates to call it an "industry"). Bear Stearns, by the way, was bought for $236 million, or less than the building is priced; one year ago, the company was worth 30 times the building, at the extravagant pricing then.
We are witnessing a repricing of assets, in response to the substantial mis-pricing of certain assets over the past few years. That does not give you inflation or deflation.
I think that the BS building is probably a good deal right now, for someone in that business. But there are going to be better deals soon.
Raise cash, invest in things that can't be easily duplicated (such as fossil fuels and downtown and farming real estate), and avoid things that can be easily duplicated (such as paper money, mortgages, etc.), and I think you can survive intact.
Inflation will eventually arrive to lift all values of all asset classes, but some will go much higher than others, and we know here which classes those are.