Are America's financial generals once again wasting their energies fighting the last war?

You might think so, watching Washington fret and Wall Street stew over the possibility of a resurgence of severe inflation - a possibility that, according to some of the country's shrewdest observers, is actually fading.Some surprising new evidence indicates that they may be right, although at least two important groups will be understandably slow to accept it. The first is the wise guys of Wall Street, who having panicked a year ago at the prospect of a deep recession that never came, have now swung full circle and are forecasting soaring inflation and interest rates. They may well be wrong twice.

The second group is more consequential, for it involves the ordinary mass of Americans who remember when inflation was the most terrifying economic word of the 1970s - torpedoing the hopes of millions and wrecking the policy dreams of a succession of presidents. Even faint whiffs of new inflation are thus taken seriously by those not afflicted with amnesia.

Nonetheless, while we may not soon repeat the almost total vanishing act done by inflation in 1986, the chances of its returning to its levels of a decade ago are much less than meet the eye in current scary headlines.

One astute analyst who has gone beyond those headlines is Don R. Hays, chief investment strategist for Richmond, Va.-based Wheat First Securities. And Hays tells me that his research now convinces him that inflation pressures in the United States "have already passed their peak, and will actually subside in the next two or three years."

If he's right, it could be vital news both for the anemic economy and for the ultra-jittery investment markets. For Hays believes that at some point quite soon - at most, a month - the stage will have been set for an easing of interest rates and the beginning of a major new bull market for stocks.

This bold conclusion rests on two assumptions: inflation is an overrated threat, and stocks are much more undervalued than most people recognize. Let's examine each of his iconoclastic assumptions in turn.

Hays contends that, for objective observers, "it is tough to make a case that rampant inflation pressures are close to being ignited" - either because of rising costs or government monetary action. Wages (70 percent of a typical firm's expenses) are still going down in real terms. Factory use appears to be flattening out well below its 1972 and 1978 peaks. The drought sent food prices temporarily higher, but the prices of industrial materials actually peaked a year ago. Nor is Washington's money-creating machinery pumping excessively; the broad-based money supply known as M2 remains locked in one of its slowest growth rates in 20 years.

To Hays, this suggests that the Federal Reserve Board will soon be turning its attention from fighting the old war against inflation to fighting a new war against economic stagnation. He doesn't think that critical turn has quite arrived. In fact, he expects most economic statistics for September to show a bounceback from the summer drought, and he suspects the Fed will want to put the last inflationary fears to rest before turning, later this fall, to expansion.

At that point, with interest rates moving down, investors would look again at stock valuations. Hays has a favorite test that he believes now conveys a dramatically favorable message. He focuses not on earnings but on corporate cash flow, which he feels is less distorted by things like inflation and tax changes. He takes the ratio of the S&P 500's stock prices to their cash flow, adds the national inflation rate, and checks the result. Anything between 18 and 22 is considered normal. The latest total was below 15, and Hays says stocks got that cheap only twice before in the last 40 years, each time setting the stage for a strong new bull market.

If Hays is right, conventional Wall Street thinkers are missing two central facts: stocks are again beginning to look like bargains, and neither economic disaster nor inflation is likely to cripple their recovery in 1989. Richmond isn't that far from New York, but this Virginian's unfashionable optimism suggests that the distance cannot be measured in miles alone.