Over the past few months Germany, Switzerland and the US have sold bonds with negative yields, meaning that investors are in effect paying those countries to safeguard their capital.

Yesterday the sub-zero club admitted a fourth member:

France sells bonds at negative interest rate

PARIS - France's government has sold short-term bonds at negative interest rates for the first time, a sign of investor confidence despite concerns about French debts and the wider eurozone.

Despite the dropping rates, France's economic outlook is stagnant. President Francois Hollande said Monday that growth in the first half of this year is expected to be "nil."

Yields, or borrowing rates, have been falling on French medium and long-term bonds in auctions over the past couple of months, as investors flock to the perceived safety of Europe's larger economies.

In a sale Monday, the treasury sold three-month bonds at -0.005 percent, and six-month bonds at -0.006 percent. The treasury agency says it's the first time they have registered negative yields

Some thoughts

It's easy to understand Swiss, German, or even US bonds trading with negative yields. But French bonds? After the country elects a Socialist who promises to increase government spending and raise marginal tax rates to 75%? This is a truly desperate world, and these bonds are safe havens only in the most short-term sense.

Consider the economic impact of negative interest rates: Capital parked in these bonds actually shrinks over time, so its contribution to economic growth is negative. A nation's GDP contracts if its money earns a negative yield, which puts the government in an even deeper hole that requires even more borrowing, ad, apparently, infinitum.

For gold the implications of this trend towards sub-zero interest rates are mixed. On the one hand, the rap against gold has always been that it doesn't pay interest. But with the safest fiat currency bonds actually costing money to own, gold's zero yield looks relatively good. On the other hand, the reason that rates are falling so precipitously is that vast sections of the global financial system are imploding, which is profoundly deflationary. On yet another hand, the major central banks will inevitably react with money creation the likes of which John Maynard Keynes could only have dreamed of, which is obviously inflationary. Add it all up and gold's story is the same as it's been for a decade: lots of twists and turns but wildly bullish in the end.

The idea of paying someone to hold our money harkens back to the origins of banking, when goldsmiths offered to warehouse customer coins and bullion for a fee. Could this be the beginning of the end of fractional reserve banking? Future historians take note.