4% yield After taxes: 3% yield After 2-3% inflation: .5% yield After 3% currency devaluation: -2.5% yield Now I've used very conservative numbers above. I cannot understand why anyone would buy T-Bonds. I can understand the Arabs, China, and Japan buying because we have an agreement with them to tolerate a trade deficit with them so long as they reinvest the dollars into our debt. But what about everyone else? Why would everyone else invest in an asset with a negative net yield? I guess the answer is too much liquidity. You can't even say there isn't enough risk premium - becuase there is absolutely no compensation for risk at all. There is a risk penalty in this environment - you actually get penalized for saving and investing. No matter how much money you have its impossible to 'live off interest' - with such negative net returns. In this environment the only way to preserve and grow capital is to learn how to trade and use leverage.