Ending a sleepy summer week, traders managed to reach a major landmark. The 10-year real yield (as shown by Treasury Inflation Protected Securities, or TIPS, and which can also be expressed as the nominal yield with the breakeven rate of inflation subtracted) dropped to a new low for the year. At below -0.6%, it was also a fresh nadir since the so-called taper tantrum of 2013:  On their face, negative real yields imply great bearishness about the future of the economy. They also act as a great prop for gold, whose greatest disadvantage as a financial asset is that it pays no income. When safe assets like Treasuries effectively pay a negative return, gold therefore becomes that much more attractive.
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