Savings bonds.

They're savings bonds.

And if buying debt seems like a weird thing to say, buying debt is the same thing as lending money (lending money).

So a security in the equity world is a stock.

So it's going to be 6,000 times 1,000 bond certificates.

Now let's say that Company x has also borrowed some money.

You can't get it on Yahoo!

We would create incentives for securitization.

It can do it through debt or equity.

I have 4 billion in residential CDOs, collateralized debt obligations.

There's very little chance of them defaulting on their loans.

And we said there's different kinds of debt.

My next presentation, I'm going to take it to a further

I want you to fix this.

A common way to finance a budget deficit is to issue bonds.

But kind of the one that people always talk about, I guess in the same phrase, is bonds.

But then there's a very fundamental difference in what the holder of the bond is doing.

And because it's a junkier rating, no one is going to want to buy it.

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The proceeds from the bond issue will be used to finance the budget deficit.

And we came up with this idea of issuing bonds, press freedom bonds.

They might have issued maybe they issued a million bonds where each of those essentially represent a debt of 80.

It might have been structured so that Corporation A right here, before even issuing the bonds, they include this insurance with the bond.

So that's what we're going to show you in the presentation on collateralized debt obligations.

I have a whole video on mortgage backed securities.

And the environment might be things like the stock market or the bond market or the commodities market.

So what you do is you have, let's say, the 6 million.

This could have been a straight debt from a bank, or this could have been via a bond issue.

And so when the Federal Reserve or any Central Bank prints money, and it buys debt, it goes out into debt markets and it buys it, it usually buys the safest kind of debt, but that affects all of the debt markets, it goes out and buys in the debt market, they're essentially shifting the supply curve of money to the right, they shift the supply curve to the right.

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So it's essentially this is an IOU from Company XYZ.

There is a price.

I feel secure when I invest in stocks but not bonds.

Instead of all of that we thought there is something new needs to be invented.

And what is a bond?

So, for example, for each one gold piece

that rectangle is much larger than it should be relative to 1,000, but I think you get the point then I'll do I'll have a liability here that says five gold pieces bank note outstanding.

And we learned that debt securities are often called bonds.

Once you have all of that put together, there's not one reason why you couldn't actually have a marketplace for all of that, where you cannot dispose of all of those bonds in a pretty quick way.

But you should watch the videos on mortgage backed securities and collateralized debt obligations, if you want to get a better understanding of exactly how the money flows go.

You can sell shares.

Currency and bond markets are relatively calm.

So this is essentially you have the government, you have the government, it has two sources of revenue that it can spend it has money from taxes, it has tax revenue, and then it can go out and borrow money, and so it also has access to debt markets.

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