Why has gold been such an abysmal investment, if you can even call it that? Well, gold doesn’t have any earnings; it doesn’t pay out any dividends; and it costs money to store. As Paul Krugman points out, it’s only worth piling money into the shiny metal when the opportunity cost of doing so is low — when real interest rates are negative. Now, that can happen when rates are high, but inflation is higher still, or when rates are low, and inflation isn’t quite as low. Britain didn’t have negative inflation-adjusted rates for most of the past millennium, because it was on a silver standard from the mid-1200s through the early 1700s, and a de facto, and later de jure, gold standard up until 1931.

But even in its age of fiat money, Britain has only had two episodes of below-zero real rates: the Great Inflation of the 1970s, and the Great Recession today. The former ended when central banks around the world jacked up interest rates in the 1980s, and the latter might be ending now, as central banks look for any excuse to exit their bond-buying despite low inflation and low growth. Indeed, real rates on 10-year U.S. Treasuries have made a violent move from around -0.3 percent at the end of May to 0.64 percent now. It’s the first time those bonds have had a positive inflation-adjusted yield since early 2012, when they only briefly offered a 0.02 percent real return. But if inflation-adjusted keep rising this time around, don’t be surprised if gold keeps falling — all the way back to its recent historical average, just like it did in the 1980s and 1990s.