๐ด Why does gold always outperform treasury bonds ๐ ?
๐ The reason is simply that the government can issue treasury bonds whenever it wants, which does not require any real energy expenditure.
โข However, to produce a new unit of gold, you must dig in the ground and extract the shiny metal, which requires much more energy than printing or issuing bonds.
โข The amount of energy expenditure is what drives the price against the yield.
โข Therefore, in the long run, the yield of gold will always be greater than that of bonds.
๐ gold > bond yield.
๐ This is a fundamental rule in investing.