Interest rates have remained very low going on what almost 2 decades? How could this be? Can this be attributed to demographics and the propensity of an aging demographic to save more and/or spend less? This demographic is most likely a saturated consumer (own everything they think they need).
The United States is in the same situation. It is completely conceivable that interest rates could remain low for decades.
Given the above suggested interest rate phenomena, do rates then become decoupled from inflation. Under this scenario, broad deflation would be a preferred option over inflation. This assumes there is a cash hoard being held by the aged demographic. Deflation would most likely give the aged demographic an incentive to spend on things they normally would not consider. The increased spending would most likely benefit the service sector.
Imagine the benefits to the Social Security and the Medicare programs if deflation occurred.
I am think of shorting U.S. Treasuries and this provokes thoughts into event possibilities.