For more than three years now a number of economists and market watchers have been stubbornly calling for an inflationary bubble to inflate but, by and large, have been disappointed. While the prices of some assets have been on the rise, so far we haven’t experienced widespread inflationary pressures throughout the economy.

Jeffrey Gundlach, who came to fame as a star bond fund manager at TCW Asset Management and went on to found Doubleline Capital, has an interesting theory as to why that may be. With more than $47 billion in assets under management, about 90 percent of which is in fixed-income vehicles, Gundlach has a strong incentive to keep an eye on inflation.

He believes that inflation has failed to materialize, despite the Federal Reserve’s best efforts amounting to nearly $3 trillion in cheap cash, largely thanks to demographics. The baby boom generation, one of the largest generations in American history at about 80 million people, has essentially begun aging out of the workforce, with about 18,000 people reaching retirement age each day. By the end of the decade there will more than 14.5 million Americans over the age of 65, making it the largest demographic bulge bracket, and that number will swell to nearly 72 million by 2030 and account for about 20 percent of the population.

As those folks retire, they will live on much lower incomes since their homes are usually paid off, their children are likely to have completed college. There are simply fewer big ticket expenditures for retirees, and if past experience is a guide, their retirement incomes will barely keep pace with even the current low levels of inflation, adding additional deflationary pressure.

Also thanks to that wave of retirements, it is estimated that the American workforce will grow by just 0.2 percent annually over the coming decade as compared to annual growth of about 1.2 percent over the prior 10 years. Although there are some signs that wages may begin rising over the next year or so thanks to falling unemployment, incomes have been largely stagnant over the past five years.

Slower workforce growth combined with a growing wave of retirees on a fixed income reduces the velocity of money even as demand growth slows, reducing inflationary pressures on the economy.

When you look at the types of assets which are experiencing pricing pressure, that argument makes a certain amount of sense. For instance, the greatest inflation we’ve experienced over the past two years has largely been tied to agricultural commodities and foodstuffs. Even when you’re retired, you still must eat. Health care costs have also experienced high inflation which, while you can make the case that that is to some degree due to inefficiencies in the system, it is also tied to the growing consumption demand related to an aging population.

But while that demographic argument makes sense today, it will be shifting over the next few years.

Like every other generation the baby boomers grew up and had children before they retired and the generation they begot dwarfs their own. Regardless of whether you call them millennials, echo-boomers or any other name, there were more than 95 million Americans born between 1978 and 2000. While the leading edge of that generation has finished college and had the misfortune of entering the workforce during the recession, the real wave of which will be coming in the next few years.

Already, many millennials are better off than their parents 30 years ago in terms of buying power. For instance, while the generation already carries more debt and faces higher home prices than their parents, their real average incomes are about $2,500 based on census data. While that might now sound like much today, when you consider that that extra buying power is spread across 95 million people whose wages will (hopefully) only be going up as they age, that’s a huge amount of extra demand over the next two to three decades.

So, while you can make a strong demographic argument for why inflation is running at relatively low rates today, that same argument will get turned on its head tomorrow.