Where there's smoke there's fire indeed, but all I see of this smoke is that its coming from smouldering piles of dung like the daily mail and F365. I guess if this did happen it would shot a massive hole in the theory that Ballack wasnt Jose's player and was signed without his approval.
Still, if Inter win the CL or get to the final I could see Gerrard or Ballack wanting to move there. Its a decent move for anyone whose legs are starting to go, but who still wants to play at the top level (see: Vieira, Patrick). For Ballack, and his declining pace, the Italian game could be ideal.
Gerrard though makes alot more sense. Liverpool are going nowhere fast, he will want to move, and Jose just missed him twice before. It all adds up a little too well