No, it isn't that TVM is disappearing. I will always prefer to have a good thing now rather than wait until the future. I will also always prefer to have more

No, it isn't that TVM is disappearing. I will always prefer to have a good thing now rather than wait until the future. I will also always prefer to have more of a good thing rather than less. Those two reasons together are why we expect positive interest rates, because I am trading having a good thing now for having more of a good thing later. However, assuming that the interest rate must be positive assumes that you can make decisions with certainty. This leads to another common thing we need to talk about- risk preferences. Being risk averse means someone will forgo some amount of good things to have a better chance of not losing even more. Overall, the market is risk averse, risk seeking behavior doesn't survive in a significant amount (for every successful YOLO investor there are dozens of bankrupted investors). If I have money, I have to do something with it (not doing anything with it means saving it, which is still doing something). I can stick it in a bank account or mattress, give it away, buy things now (food, stocks, gold)- I may sell in the future- or buy bonds (which are also things, but we're considering them separately than for this). I am trying to figure out how to get the most happiness now, but I might forgo some happiness now to ensure that I have more happiness in the future. The future presents risk. A stock or gold might go down, a bank or government might default. My mattress might get stolen. All of these things could happen regardless of inflation. We assume that inflation rises, and we assume that a government bond is pretty safe for most countries. You might buy an inflation protected bond, but the basic treasury bond just gives you a fixed percentage each period and then your money back at maturity. Negative yields can happen on T-bonds or TIPS- this discussion about TVM isn't about inflation or how CPI is calculated. This discussion really isn't about inflation. If a person is paying more than the total value of the bond (the bond value plus all payouts), this isn't an indicator that TVM is broken or no longer true. What it does say is that your evaluation of the risk has changed. I am willing to accept a negative yield because I've calculated that all the options that have a better yield are too risky. I'd rather take a guaranteed loss of a little money instead of risking more, even if the higher risk might come with a better average return. Buying negative yield is saying that it's not worth trying to keep up with inflation, because trying to keep up with inflation is too risky. It's saying that holding cash with zero yield (and negative inflation-adjusted yield) is more risky, because I don't think I can store that cash safely, or that I would need to pay the amount of the negative yield to store the cash safely. Again, TVM isn't broken. You will always need to compensate me more in the future to forgo something in the present, assuming that risk is equal for the payout in each time period. You will also always need to offer me a higher average return to take on risk. The perceived risk of the deal is what changed, not the logic behind decision making. A follow on point is this: Bloomberg authors get paid more if their articles move markets (they have a funky way of deciding this bonus). Don't go thinking that Adam Smith is wrong just because a guy with a journalism degree interviewed a few investors.