Zeev's Turnips Patch-No Politics (ZEEV)

[ardent jd]

Zeev

Adam Hamilton at Zeal offers one of the better arguments for the gold bulls IMO - negative real rates.

http://www.zealllc.com/essays.htm

For those who don't want to take the time (takes forever to load and is quite verbose), I'll summarize: real interest rates (1-year Treasury minus cpi) are currently negative. As long as bond investors are virtually guaranteed a negative rate of return, especially after taxes, money will flow to gold, which at least can be expected to keep up with inflation in the long term.