[HN Gopher] Happy 400th birthday to the world's oldest bond
___________________________________________________________________
Happy 400th birthday to the world's oldest bond
Author : pseudolus
Score : 233 points
Date : 2024-12-19 16:47 UTC (4 days ago)
(HTM) web link (www.ft.com)
(TXT) w3m dump (www.ft.com)
| throw0101b wrote:
| See also Tom Scott on a different perpetual bond:
|
| * https://www.youtube.com/watch?v=cfSIC8jwbQs
|
| * Also: https://en.wikipedia.org/wiki/Perpetual_bond
| recursive4 wrote:
| Bond, Perpetual Bond
| dotancohen wrote:
| Interest compounded, not simple.
| hk__2 wrote:
| > In return for her money, the water board promised Jorisdochter,
| her descendants or anyone who owned the bearer bond 2.5 per cent
| interest in perpetuity.
|
| This is inaccurate; it was 5%:
|
| > According to its original terms, the bond would pay 5% interest
| in perpetuity, although the interest rate was reduced to 3.5% and
| then 2.5% during the 18th century. [1]
|
| [1]: https://en.wikipedia.org/wiki/Perpetual_bond
| 77pt77 wrote:
| So, not in perpetuity.
| d0liver wrote:
| Sounds like the Wikipedia article is talking about a different
| set of bonds, "Another of these bonds, issued in 1648, is
| currently in the possession of Yale University."
|
| From the article, it looks like the original interest on this
| one was 6.25% (75/1200) though.
| trgn wrote:
| Where is the in perpetuity language in the bond terms? Doesnt it
| say until full repayment?
| d0liver wrote:
| Yes, but they never repaid it. They have just been paying out
| the interest.
| trgn wrote:
| ah thanks, I think I get it now.
|
| "heritable annuity" is the perpetual interest. "until
| repayment" threw me off.
|
| 75/1200 = 6.25% though.
|
| Where does the 2.5% interest rate quoted in the article come
| from?
| d0liver wrote:
| Not sure. From other comments, it sounds like that's an
| adjustment that they made later.
| evanb wrote:
| > [I also declare] to have awarded and given 75 Carolus
| guilders of twenty stivers apiece per year as heritable
| annuity, to be paid one half of the annuity aforesaid on the 9
| th of June 1625 and the other half the 9th of December
| following and so on every six months until repayment with all
| payments entirely free of all taxes, impositions or burdens of
| whatever name or title none excepted.
|
| It is confusingly written, but what it means by repayment in
| the above paragraph is not "until you get your 1200 guilders
| back in these 75-guilder installments", its meaning is
| clarified by the next paragraph,
|
| > On such conditions that I or my successors [unreadable] of
| the aforesaid Leckendijck may, at any time when it pleases us,
| extinguish, repay, and buy back the said annuity in full at
| once and not in parts or fractions with the sum of one thousand
| two hundred Carolus guilders
|
| which explains how the board can get itself out of this
| obligation: by paying the original principal of 1200 guilders
| back.
| trgn wrote:
| Thanks, yes, very helpful!
| mgolawala wrote:
| How is the exchange rate between modern money and "carolus
| guilders" calculated?
|
| Something like a foreign exchange market cannot help
| determine this right?
|
| In theory, could the exchange rate for $1 be made equal to
| 1,200 carolus guilders? (Effectively, making the bonds
| worthless)
| lesuorac wrote:
| I guess conversely, if you had a bond dominated in say
| Francs and the currency goes away do you just default?
| crote wrote:
| Currencies rarely "go away". They are usually replaced by
| new ones, and the government will buy the old currency
| and pay you in new currency. Imagine the mayhem if a
| government decided that all money everyone owned would
| suddenly be completely worthless!
| evanb wrote:
| In 2016 India demonetized some bank notes (true, not the
| whole currency)
|
| https://en.wikipedia.org/wiki/2016_Indian_banknote_demone
| tis...
| crote wrote:
| There's a pretty continuous line between the carolus
| guilder and the euro. For example, the modern-day (2002)
| guilder was fixed at an exchange rate of 2.2 GLD = 1 EUR.
| Previous coins also had a more-or-less fixed ratio, aided
| by the value of the gold and/or silver they were made out
| of.
|
| If you want to treat it like a completely separate coin,
| you'd have to buy historical carolus guilders in auctions.
| They seem to be worth about EUR1500 [0], although the same
| amount of gold can be bought for only EUR240.
|
| [0]: https://www.ma-shops.nl/henzen/item.php?id=77815
| comradesmith wrote:
| It would be done stepwise.
|
| When the Dutch florin was introduced there would have been
| an agreed (or imposed) exchange rate. Looks like that was
| 1:1.
|
| Later when the Euro was adopted there was an exchange rate
| for that too.
|
| To get to USD use the floating exchange rate of the open
| market.
| crazygringo wrote:
| Thank you!
|
| Curious why the board never paid back the original principal
| at any point in time over the past 400 years?
|
| If the current annual interest of 2.5% cited in the article
| is EUR13.61, that would make 1200 guilders EUR544.40.
|
| Did they just forget to? Did they figure the bond would
| eventually disappear? Or did they at some point think it was
| really cool to have a piece of "living history" and want to
| keep the world record alive for oldest active bond? If so...
| when?
| crote wrote:
| A similar one owned by Yale can be viewed online [0]. It
| was issued in 1648, and it seems to have a fairly
| continuous payment history since then. There are gaps of a
| few decades, but nothing too extreme.
|
| [0]: https://collections.library.yale.edu/catalog/2008714
| rtkwe wrote:
| It's such a low amount it's barely a blip on the budget of
| the successor issuer and by the time it was rediscovered in
| modern times it was enough of a historical novelty it was
| more interesting to keep it than to cancel it. Most of
| these bonds go years without being collected on.
| OscarCunningham wrote:
| So if their available interest rates had ever dropped below
| 6.25% then the issuers should have bought it back?
| jandrese wrote:
| Do I understand this right that this is a public works project
| with effectively a 400 year old interest only loan?
| andylynch wrote:
| Pretty much! (Securities like this are also something of a
| headache for compliance people since _technically_ they can be
| caught by current regulations not written with them in mind.
| Good luck getting an LEI for this bond's issuer. (An actual
| concern I've seen raised by people responsible for such things)
| bagels wrote:
| For those like me that didn't know
|
| "The Legal Entity Identifier (LEI) is a reference code --
| like a bar code -- used across markets and jurisdictions to
| uniquely identify a legally distinct entity that engages in a
| financial transaction."
| crote wrote:
| I checked it, and the issuer of this bond (Hoogheemraadschap
| De Stichtse Rijnlanden) indeed does not seem to have a LEI!
| gip wrote:
| This story also shows another facet of inflation: the amount
| currently paid is EUR13.61 a year. Effectively, that debt was
| killed by inflation over the years.
|
| Inflation makes it harder for the current generation but also
| free future generations from your debts.
| mitthrowaway2 wrote:
| Doesn't that depend on which generation collects payments on
| the bond, and which makes the payments?
| fsckboy wrote:
| the view you are describing could be described as (or at least,
| i would describe as) "newtonian" interest/inflation, where
| modern thinking is more "einsteinian".
|
| the interest rate of a bond isn't just "liquidity/the time
| value of money", it also contains expectations for future
| inflation rates. However, we never know the future, so
| inflation risk cannot be eliminated/hedged by any means, so
| being "wrong" about the future might harm or reward you.
|
| furthermore, by portfolio theory, you would have needed to
| reinvest all the interest received from this bond immediately
| upon receipt as part of your evaluation of the performance of
| the bond (which, that being difficult to do is why we evaluate
| bonds at "present value"). All those past interest payments
| made would have been reinvested at prevailing (e.g. so-called
| "inflationary") rates and might have done extraordinarily well.
|
| If you include all factors, this bond might have been the best
| investment she could have made, and it would be wrong to
| describe it as somehow "ravaged by inflation"; with nothing any
| better to do with her savings, it's the _idea_ that money is
| somehow "fixed" and potentially permanent unless "eroded" that
| we should see as damaged, not the value of this bond.
| moomin wrote:
| I think a more nuanced take would simply be that the long
| tail of a perpetual bond is unlikely to be worth that much,
| which is why these days bonds with extremely long maturities
| aren't issued.
| fsckboy wrote:
| I think I was taught that perpetuities were banned because
| of the legal/accounting woes they create in the future.
|
| As an example, the reason that coupons (like $1 off a box
| of Wheaties) or refunds (good for 1 airline ticket) and
| similar "financial instruments" have expiration dates on
| them is because it is required by accounting rules. When
| those items are issued, companies need to put them on their
| books as liabilities, and having to keep around an ever
| increasing accumulation of liabilities for many years would
| give a "wrong" picture of the financial health of the
| entity, when the purpose of books is to give a "right"
| picture.
|
| (your take is not more nuanced, it acknowledges this
| practicality aspect. to extend the newtonian/einsteinian
| analogy, you're advocating ignoring the [?]x2 term as the
| lim [?]x-0 version of the calculus derivative rather than
| the approach taken by analysis :)
| SilasX wrote:
| Hm interesting. I think that would also explain why they
| make gift cards expire or lose value over time, even
| though, if anything, they should be paying you interest
| because you're giving them a(n otherwise) free loan.
| sethhochberg wrote:
| The catch is that the interest-free loan can be called in
| by you, the gift card holder, at any time - so they get
| less utility from any given amount of gift card balances
| than they would loans/corporate bonds of the same amount
| because they're always trying to be prepared to pay out
| some portion of those balances.
|
| This is why they're treated as a liability in the company
| books. You can guess or bet that all of your outstanding
| gift card balances won't be redeemed at once, but there's
| really nothing preventing that from happening and causing
| cashflow problems for the company. And there's lots of
| overhead involved in tracking many many thousands of
| small balances on cards into perpetuity.
|
| Much easier to encourage people to spend the gift cards
| and get your financing from proper, predictable business
| loans or bonds.
| SilasX wrote:
| Most of that is irrelevant here. All they have to do is
| put in an interest bearing account, and pay out some
| amount less than they're earning. Furthermore, they will
| effectively owe you less than even the principle since
| they (on average) sell the goods for more than they cost.
| You're forgetting that this liability comes with an over-
| offsetting asset.
|
| Then, if they have any wiggle room, they can get a
| further increase by buying back a bond of higher yield
| sooner, modulated by expected cash flows.
|
| >Much easier to encourage people to spend the gift cards
| and get your financing from proper, predictable business
| loans or bonds.
|
| That doesn't follow at all. The longer the gift card goes
| without being spent, the more free money they get.
| There's no net benefit to the goods being called sooner.
| jncfhnb wrote:
| Not really. Gift cards don't expire and you're allowed to
| just make reasonable assumptions about what portion will
| never be redeemed.
| koolba wrote:
| On a long enough timeline, every perpetual guarantor
| defaults.
| wbl wrote:
| The benefit to perpetuals is all bonds trade in the same
| pool regardless of issuance.
| Mistletoe wrote:
| I would assume that bond was made in an era of low or no
| inflation. The yield of 2.5% would barely cover our current
| levels of desired inflation.
| olalonde wrote:
| Indeed, the Netherlands at that time operated on a 'hard
| money' system. Coins were minted from gold, silver, and
| copper, with their value directly tied to the availability
| and intrinsic worth of these metals, naturally limiting the
| money supply. This is in contrast to modern fiat currency
| systems, where money derives its value from government decree
| rather than a physical commodity, allowing inflation through
| unrestricted money creation.
| UniverseHacker wrote:
| > Inflation makes it harder for the current generation
|
| It's not obvious to me that this is the case- if your wages go
| up with inflation, and you store money in stocks/bonds that
| keep up with inflation- doesn't it also just make any debt you
| have gradually reduce overtime?
| flyingpenguin wrote:
| This is why being in low interest debt is so amazing. Take
| two people with the exact same job tracks, same appartments,
| family, interests, etc...
|
| But give one of them $2,000,000 in mortgage debt at 3.0%
| interest on 3 properties that are rented out, and don't have
| the other have anything.
|
| In 15 years, those properties will be worth 2-3x as much, and
| the debt will still be 2,000,000. This is what happened to
| boomers even though they don't realize it. Its not that
| houses are some amazing investment, its that no one will give
| you 7figure loans at 3% interest to buy stocks with money you
| don't have, but they will do it for a property.
| UniverseHacker wrote:
| That did happen to Boomers, but I wouldn't assume it will
| happen again. Over a long enough time period housing values
| must approximately track inflation, because there is an
| upper threshold of income percentage (certainly below 100%)
| people can afford to spend on housing. Currently, mortgage
| rates are about 2x what inflation has been over decades
| historically. Boomers mostly made money with regulatory
| capture- landowners were able to politically block housing
| construction during a time of increasing population,
| causing a short term anomaly where people were paying
| steadily increasingly high percentages of income on
| housing. Both that regulatory capture, and the population
| growth are disappearing now.
|
| When I run the numbers where I live based on current market
| rates buying a home is predicted to be a big money loser
| over time vs renting and investing the difference. Renting
| lets you buy into housing with the prices and tax rates of
| when the owners bought them decades ago.
| rrrrrrrrrrrryan wrote:
| Buying still has a ton of tax advantages and gives people
| access to an incredible amount of leverage that they
| wouldn't be able to get otherwise.
|
| For what it's worth, I don't disagree with you, and I
| think renting makes more sense than buying right now for
| the first time in decades, but it's just by a hair.
| Thorrez wrote:
| >This is what happened to boomers even though they don't
| realize it. Its not that houses are some amazing
| investment, its that no one will give you 7figure loans at
| 3% interest to buy stocks with money you don't have, but
| they will do it for a property.
|
| Interest rates from 1971-1998 were higher than they are
| today[1].
|
| [1] https://www.freddiemac.com/pmms
| laurencerowe wrote:
| I don't think the 2-3x as much in 15 years time is likely
| to be true. When interest rates start out low there is much
| less scope for appreciation than when they start out high.
| So if you buy when mortgage rates are at 3% you can't
| expect the big gains you get when mortgage rates fall.
|
| My personal rule of thumb is that rents remain fairly
| stable as a proportion of earnings under balanced supply
| and prices are then a function of rents / mortgage rates.
|
| Over the past 15 years median household income has gone
| from $50k to $80k while mortgage rates more than halved
| from 6.5% in 2006 to 3.1% in 2021. Most of that 2-3x
| increase is from the fall in rates.
| UncleOxidant wrote:
| > In 15 years, those properties will be worth 2-3x as much
|
| You're extrapolating the last 15 years onto the next 15
| years. The last 15 years came on the heels of a historic
| decline in real estate prices that occurred just prior to
| that period (2008-2010).
| kristianp wrote:
| It kind of happened to boomers, but it's wrong in a number
| of ways.
|
| 1. Interest rates were in the teens when they bought their
| houses. However they may have only paid $50k for a house in
| the 80s.
|
| 2. Most only bought their own house and didn't have many
| other investments. My parents for example had an investment
| property in the 90s, but were an exception.
|
| 3. House values have gone up because building regulations
| and zoning have become so onerous that supply hasn't kept
| up with demand. I believe this will continue and house
| prices will continue to beat inflation in many
| jurisdictions.
| caseysoftware wrote:
| _" if your wages go up with inflation, and you store money in
| stocks/bonds that keep up with inflation"_
|
| This depends on at least four premises:
|
| a) that your wages track with inflation
|
| b) that your expenses (not debt) track less than inflation
|
| c) that you can buy into stocks/bonds _before_ the inflation
| _AND_ they track with inflation
|
| If any of those are untrue, your conclusion falls apart.
|
| If all three are untrue, your expenses are growing faster
| than your wages and the little you have left over is now
| buying already-inflated assets.. which we've seen play out
| once in recent times.
| drdec wrote:
| > Inflation makes it harder for the current generation
|
| Inflation benefits borrowers and penalizes lenders.
|
| I would posit that younger people tend to be borrowers and
| older people tend to be lenders (bond owners).
|
| That said, it's not clear what you meant by "the current
| generation."
|
| Final note, inflation helps encourage people to use their money
| and keep the economy moving.
| caseysoftware wrote:
| > _Final note, inflation helps encourage people to use their
| money and keep the economy moving._
|
| Short term thinking in itself is damaging.
|
| But then thinking something is "worth more" because it costs
| more dollars a year from now is deceptive.. how much did its
| value increase vs the dollar decrease?
|
| But it's convenient for tax authorities as you're taxed on
| the gains, regardless of the why/how it changed.
| cma wrote:
| > Final note, inflation helps encourage people to use their
| money and keep the economy moving.
|
| The government offers inflation protected securities,
| matching inflation plus some usually minimal interest.
| bormaj wrote:
| > Final note, inflation helps encourage people to use their
| money and keep the economy moving.
|
| That also means that costs are increasing, which may have the
| opposite effect
| nico wrote:
| > also free future generations from your debts
|
| Only if the debt is not pegged to inflation
|
| In Chile at least, you can get a loan in "UF", which is an
| inflation-adjusted equivalent of the underlying currency. The
| value of UF changes with inflation (almost always going up). So
| the loan will just keep getting more expensive
|
| Most mortgages there are in UF
| jandrese wrote:
| Debtors see hyperinflation in neighboring countries and start
| getting nervous.
| raldi wrote:
| HN headline in the year 2400: "I SSHed into a box with a
| 146923-day uptime and found a cronjob still running"
| qingcharles wrote:
| I found a server I used to host in 1996 still online, but I
| don't know where it is. Looks like it is running a 2010 version
| of Apache, though, so it was at least updated 14 years ago:
|
| http://resworld.eolith.net/res.html
| gerdesj wrote:
| It's in the UK somewhere: https://bgp.he.net/AS13037
| jackcosgrove wrote:
| I'm curious if anyone has run the numbers and looked at what the
| interest payments of this bond over the past 400 years would have
| amounted to had they been invested in some theoretical basket of
| typical assets that were available at the time.
|
| It sounds like a pittance now but 400 years of a compounding
| pittance could be a lot of money.
|
| Edit: with an annual contribution of EUR13.61 and a real rate of
| return of 3%, 400 years of annual compounding would be over EUR7
| million. With a rate of 4% it would be EUR280 million.
| PepperdineG wrote:
| > with an annual contribution of EUR13.61 and a real rate of
| return of 3%, 400 years of annual compounding would be over
| EUR7 million. With a rate of 4% it would be EUR280 million.
|
| Reminds of Futurama with billionaire Philip J Fry after
| unintentionally leaving 93 cents in the bank for 1000 years.
| dgfitz wrote:
| I asked a bot to do the math for me (if anyone was as curious
| as I was):
|
| 93 cents would turn into approximately $17.88 trillion with
| compound interest of 3% over 1000 years.
|
| 93 cents would turn into approximately $4.28 billion with
| compound interest of 2% over 1000 years.
|
| 93 cents would turn into approximately $19,482.22 with
| compound interest of 1% over 1000 years.
| scubbo wrote:
| Is a bot really necessary in order to calculate 0.93*(1 +
| n%)^1000?
| dotancohen wrote:
| Not if you know the formula. I suspect that GP didn't.
| antihipocrat wrote:
| The bot does the trivial things well, still need a brain
| to actually apply these trivial things to solve complex
| problems - much like a calculator
| paxys wrote:
| The issue would be finding an asset (or group of assets) that
| 1) held value and 2) you could maintain ownership over
| continuously for 400 years. Cities, kingdoms, countries,
| currencies, corporations, banks, markets all rise and go
| extinct over much shorter periods.
| rtkwe wrote:
| Monetary calculations in general are tough over that long of
| a timespan in general much less when you have to factor in
| the likelihood your theoretical investment would have
| survived the bakers dozen of financial/governmental crises.
| NoboruWataya wrote:
| > with an annual contribution of EUR13.61 and a real rate of
| return of 3%, 400 years of annual compounding would be over
| EUR7 million. With a rate of 4% it would be EUR280 million.
|
| Calculating the total return given an annual average rate of
| return is the easy part here. The idea that you can easily
| invest in a diversified basket of assets and receive a fairly
| safe x% a year is a relatively recent one. I'm not sure what
| assets you could invest in 400 years that would even be
| guaranteed to exist today.
| wbl wrote:
| The Hudson's Bay Company is almost old enough.
| https://en.wikipedia.org/wiki/Hudson%27s_Bay_Company
| nico wrote:
| > with an annual contribution of EUR13.61 and a real rate of
| return of 3%, 400 years of annual compounding would be over
| EUR7 million. With a rate of 4% it would be EUR280 million
|
| 400 years -> 280M
|
| That gives you a perspective on how insane a billion dollars
| is. Also wild that any single individual can own that much (and
| some a lot more!)
| IAmGraydon wrote:
| Cool. Now take the 1,200 Gilder and invest it in that same
| investment vehicle at 4% and wait 400 years. It's worth
| $7,807,589,396.13
| scyclow wrote:
| This is amazing, but I find it disappointing that the NYSE
| (current owner) hasn't collected interest on it since 2004. Given
| that most of the charm is that this is still an active financial
| document, I don't understand why they wouldn't keep it going.
| Otherwise it's just another defunct historical document.
| caseysoftware wrote:
| Because the bond has to be physically presented.
|
| Moving such a document is extremely risky and a lot of work so
| not worth it in almost any case short of the PR bump/curiousity
| of having the "world's oldest bond"
| bagels wrote:
| Even if you didn't have to move it, getting a taxi to some
| meeting place would exceed the interest payments, let alone
| traveling to Europe.
| seizethecheese wrote:
| Given this, we should be thankful that the NYSE is
| maintaining this at a loss. It occurs to me that NYSE might
| be the best owner of this bond, as the primary value isn't
| monetary, but the demonstration of stable financial
| institutions.
| mmiyer wrote:
| The article is about them collecting interest a couple weeks
| ago on the 400th anniversary? They clearly are keeping it
| going, just only collecting interest irregularly at PR
| milestones.
| yieldcrv wrote:
| Bearer bonds exist in crypto and are extremely popular there, for
| anyone lamenting the loss of the concept
|
| What I love about this is how in just the last 20 years, a lot of
| work has been done to jettison bearer bonds from existence in
| jurisdictions across the globe, and cause the "registration" of
| any existing bearer bonds so that they couldnt be grandfathered
| in
|
| But no sooner than this advancement in global geopolitical
| hegemony was developed and leveraged, the crypto market
| reinvented bearer bonds and they work even better
| kchoudhu wrote:
| CUSIP?
| robterrell wrote:
| This has me hoping the Vesuvius prize finds an ancient Roman bond
| that needs to get paid out.
| brnt wrote:
| Pity that the Holy Roman Empire dissolved a while ago.
| axus wrote:
| It was neither Holy, nor Roman, nor an Empire.
| patall wrote:
| Given that several states claim to be Rom's successor, it
| shouldn't be that hard to find someone to take the
| responsibility.
| wbl wrote:
| No state does. The Russian state started in 1917 and
| disclaimed all debts of the Czar. The Ottoman empire ended
| and was replaced with the Republic of Turkey. Modern
| Germany doesn't inherit from any of the predecessor states
| after WWI and the Nazi era.
| Yeul wrote:
| I'm currently reading a book about a war in the 17th
| century. One thing that is entirely different from today
| is how kings and governments could just stop paying back
| their lenders and there was nothing you could do about it
| but send angry letters...
|
| Ofcourse it worked the other way too. Entire armies of
| paid mercenaries could just take the money and run into
| the night.
| wbl wrote:
| Just ask lenders to Argentina about how getting paid back
| is going.
| aguaviva wrote:
| _Modern Germany doesn 't inherit from any of the
| predecessor states after WWI and the Nazi era._
|
| Not quite. Its criminal code inherits directly from that
| of the 1871 Reich (including quite notoriously Paragraphs
| 175 and 218).
|
| But it is correct to say that its constitution inherits
| only back to 1919, and it never maintained any pretense
| of connection to the Holy Roman Empire.
| IAmGraydon wrote:
| Interesting story, but as a bond holder, you're a lender. As a
| lender, you are exchanging inflation risk for interest. With this
| in mind, how could anyone think that a 400 year bond would be a
| good idea (specially at only 2.5%!). You have to remember that
| when buying a bond, your principal is tied up until maturity. On
| a 400 year bond, you're basically never getting it back. So
| you've handed your money to someone 15 generations in the future
| for what is initially a bad return and by the end of the bond's
| life is unbelievably bad.
|
| By the way, if you take the 1,200 Gilder and invest it in an
| investment vehicle at 4% compounding and wait 400 years, it's
| worth $7,807,589,396.13 This woman basically traded almost $8
| Billion of future return for a total of $5,444 including that
| principal that is returned at maturity. Ouch.
| icegreentea2 wrote:
| The original bond says 75 guilders per year until the principal
| of 1200 was repaid. That's 6.25% per year.
|
| I don't think this investment was anywhere as dire as you paint
| it as. Especially in a world where monetary inflation was very
| different... currency debasement didn't typically happen that
| quickly.
| pm215 wrote:
| The lender in this case was living somewhere that was likely to
| flood if the repair works funded by the bond didn't get done,
| so they might have had some not purely financial motivation for
| it.
|
| Plus we don't know what other investments Elsken Jorisdochter
| owned; this was probably a small part of her assets.
|
| Finally, I'm not very convinced by the "400 years at 4%
| compounding" hypothetical -- could you actually buy an
| investment with that return at that date which was a safe non-
| risky one? And if you could, should you as a person with a
| lifespan much less than 400 years really prefer it over
| something which gives you a guaranteed income within your life?
| Animats wrote:
| The UK government finally bought back its old consols, their
| perpetual bonds, in 2015.[1]
|
| "Never sell consols" was good advice in the Jane Austen era.
|
| [1] https://uk.finance.yahoo.com/news/uk-says-redeem-post-
| world-...
| joshlemer wrote:
| I wonder if there's a market for novelty collector bonds like
| this.
| jimnotgym wrote:
| There was a Tom Scott video about a similar bond
| https://youtu.be/cfSIC8jwbQs?si=352fpBnjG_2gs4CZ
| spaceguillotine wrote:
| i have to laugh at their proposition that Bonds built the modern
| world... that was slavery buddy, all that stolen labor funded the
| markets of the world.
| dotancohen wrote:
| You are using a very modern lens to look at history - not
| recommended.
|
| I say that as someone whose grandfather was a slave.
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