Thursday, September 30, 2010

Cash gold has a higher yield than the 10 year Treasury Note....

Whoa - that doesn't make any sense, right ? Holding gold only causes you to pay for storage and insurance, right ?
Here's the comparison: If you currently buy a 10 year Treasury note, you'll receive about 2.5% annually in interest. When you buy gold you get no interest at all. Here my good friend Ben comes to the rescue: he aims for 2% inflation per year and he's not shy about printing Dollars if that goal should be in jeopardy.
But wait ! There's more : the way he calculates inflation, it understates it by about another 1% (quite conservatively).
Put another way, paper Dollars depreciate by at least 3% per year against gold.

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