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I’m probably going to ask the stupidest question you have ever been asked how do you actually sell debt Like can one sell their own debt?

elSidCampeador 7y ago
You write your name on a piece of paper that says - "IOU so much money" and then you take money from anyone who's willing to give you money in exchange for that paper. Debt = that paper Selling = basically getting money for that paper
- cryptonector 7y ago
  It's important to note that the amount of money you accept for that paper need not be what's written on it. I.e., you could sell a bond saying you'll pay back $1000 + interest and get only $981 for it, say, or maybe $1017 dollars for it, or any other number. If the bond sells for more than its nominal value, then the effective interest rate you pay to borrow will be lower than the nominal interest rate, and if the bond sells for less, then your effective interest rate will be higher than the nominal interest rate.
  - navigatesol 7y ago
    Yes and no. The face value of the bond is what you will receive at maturity. When the bond trades in the intermediate term, its price is determined by prevailing and expected interest rates.
isoskeles 7y ago
You don't "own" your own debt. The bank / other entity you are indebted to "owns" the debt, hence why they can sell it to a debt collector for pennies on the dollar. Instead of owning your debt, you are liable (or there's a better word than "liable") for your debt. Basically, you already "sold" your debt when you first became indebted. It's not really a dumb question. I get why people might look at their debt as something they own, given the debt itself is tied to their identity and credit score until paid off.
simula67 7y ago
"Selling debt" is a euphemism for "selling bonds".
0x8BADF00D 7y ago
What you do is invent the phrase “as good as gold”. Then you convince the world that your paper is more valuable than theirs, and they store it in their vaults instead of gold. That’s how you export inflation and sell your debt to suckers.

elSidCampeador 7y ago

You write your name on a piece of paper that says - "IOU so much money" and then you take money from anyone who's willing to give you money in exchange for that paper. Debt = that paper Selling = basically getting money for that paper

cryptonector 7y ago
It's important to note that the amount of money you accept for that paper need not be what's written on it. I.e., you could sell a bond saying you'll pay back $1000 + interest and get only $981 for it, say, or maybe $1017 dollars for it, or any other number. If the bond sells for more than its nominal value, then the effective interest rate you pay to borrow will be lower than the nominal interest rate, and if the bond sells for less, then your effective interest rate will be higher than the nominal interest rate.
- navigatesol 7y ago
  Yes and no. The face value of the bond is what you will receive at maturity. When the bond trades in the intermediate term, its price is determined by prevailing and expected interest rates.

isoskeles 7y ago

You don't "own" your own debt. The bank / other entity you are indebted to "owns" the debt, hence why they can sell it to a debt collector for pennies on the dollar. Instead of owning your debt, you are liable (or there's a better word than "liable") for your debt. Basically, you already "sold" your debt when you first became indebted. It's not really a dumb question. I get why people might look at their debt as something they own, given the debt itself is tied to their identity and credit score until paid off.

simula67 7y ago

"Selling debt" is a euphemism for "selling bonds".

0x8BADF00D 7y ago

What you do is invent the phrase “as good as gold”. Then you convince the world that your paper is more valuable than theirs, and they store it in their vaults instead of gold. That’s how you export inflation and sell your debt to suckers.