As Interest Rates Turn Negative, Gold Becomes the High-Yield Asset, Rickards Says

by Chris Powell

Dear Friend of GATA and Gold:

Wall Street for Main Street’s Jason Burack gets some interesting observations out of financial writer and geopolitical strategist James G. Rickards in an interview posted this week. Among other things, Rickards remarks:

— As interest rates increasingly become negative, gold becomes the high-yield asset even as it may pay no interest at all.

— Governments can’t reliably dump U.S. government debt instruments to protect themselves against dollar devaluation, since the president can freeze any threatening financial transaction, none more easily than government bond transactions. But governments can hedge their dollar exposure by buying gold, and many indeed are doing so.

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