Many people in our society invest in bonds. Perhaps you, reading this article, have invested in bonds at least once and are still investing now. Bank deposits are a form of bonds, just not labeled as ‘bonds.’ When you deposit your money in a bank, the money isn’t considered bank money. Interest is paid because the money isn’t withdrawn immediately. When you withdraw your deposited money, the bank must return the principal plus interest. This is essentially a bond. However, the only reason this differs from bonds as an investment asset is that these bank deposits are not traded on the market. If bank deposits were traded publicly, the interest rate would be evaluated in comparison with other deposits, even if the principal remains unchanged. Valuation reflects opportunity cost. This is the transaction value of bonds. When goods or assets are traded in the market, their value is re-evaluated. The core of value is comparison, and the tool for valuation is opportunity cost. That’s why CEOs...
It’s not that there is no money, but rather that people can’t find a worthwhile entity to invest in. The businessman misunderstands that he can’t do what he wants simply because he lacks money. However, just as water flows to a low place, money naturally gravitates toward where it’s valued, even if you have no cents. In other words, it’s not that they don’t have money; it’s that they don’t instill the kind of trust in investors that encourages spending it. No matter how dire the situation in the country may be, money doesn’t simply evaporate. You miss opportunities because the conditions aren’t right for investment. - Joseph’s “just my thoughts”