🔴 Why does gold always outperform treasury bonds 📊 ?
👈 The reason is simply that the government can issue treasury bonds whenever it wants, which does not require any real energy expenditure.
• 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.
• The amount of energy expenditure is what drives the price against the yield.
• Therefore, in the long run, the yield of gold will always be greater than that of bonds.
📊 gold > bond yield.
🌟 This is a fundamental rule in investing.
