Inflation vs. Deflation and Interest Rates

There's a lot of talk these days about rising inflation and rising interest; so I thought I'd summarize a dialogue in the most recent edition of the CFA Magazine. The article is titled 'The Race to Zero' and it's narrated by journalist Jonathan Barnes based on his interview with Richard Hokenson, founder of demographic economic firm Hokenson & Company.

Hokenson feels that the future will experience disinflation if not deflation, and that the secular trend for interest rates is still down. Why? The world is getting older, and believe it or not, global population growth is facing decline, as people on earth are making the decision (voluntarily or involuntarily) to not replace themselves. It doesn't matter how much money central banks are printing; if the demand for money is in decline, reflation is less likely. What else could contribute towards disinflation or even deflation?

Economic shocks are typically deflationary. From an investment standpoint, you want to focus on companies with strong financial statements.

GB