This paper documents a massive decline in long-term real interest rates from the 1990.s until 2008, followed by a sudden spike in these rates during the financial crisis of 2008. Breakeven inflation rates, calculated from inflation-indexed and nominal government bond yields, stabilized until 2008, when they showed dramatic declines. The paper asks to what extent movements in short-term real interest rates, bond risks, and liquidity and other institutional factors explain these developments. The paper argues that low inflation-indexed yields and high short-term volatility of inflation-indexed bond returns do not invalidate the basic case for these bonds, that they provide a safe asset for long-term investors.