Back Of The Napkin Numbers
Bonds 20 Year 100,000.00 x .04125 = 4125.00 x20 = 82,500.00 or 182,500.00 in 20
Inflation at .07 per year so your 100,000.00 is worth 93,000.00 next year.
What Is Your 182,500.00 worth at the end of 20 years in real terms.
All Depends on Inflation.
Assume an average of 5% per year for the next 20 = 100,000.00 lost to inflation
Did You Make Any Money? No, But I thought you were to maintain your purchasing power at the minimum.
What if you are stuck in Treasuries from two years ago when the rate was .0065 650.00 per year (note: think Pension Funds)
Inflation doesn't change but you have to pay capital gains tax to the fed for the interest earned on t-bills.
But Inflation Ebbs and Flows, up an Down it goes until it only goes up and in a parabolic curve. That is where we are now.
Do you still want to buy treasuries after doing the math?
Remember when things get real like only Gold has purchasing power that real at first is extremely valuable because no one has anything real.
If a man has a truck to sell and someone comes up with fiat cash during a massive devaluation of fiat your gold will go a long way. While the fiat purchases less and less each day, Gold purchases more and more each day.
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