05/09/2016 - Jim Bianco: Gold Is A “High Yield” Asset In A Negative Rate World
“The amount of debt yielding negative is now $8.1 trillion…65% of which is in Japan and pretty much the rest of it is in Europe right now. 20% of world sovereign bond markets are now at negative interest rates. If you exclude the U.S., it’s about 50%… My friend Jim Grant likes to say that the problem with the barbarous relic is for 5,000 years…it’s always yielded zero; it had no yield, and that’s always been the argument against owning it: ‘Why would you want to put your money in something that doesn’t yield you anything?’ Well, guess what? Today, a zero yield as gold has is a high-yield alternative when compared to $8 trillion dollars’ worth of investment options in sovereign bonds. So we are really in an alternative universe where the high yield is now zero.”
