2 ms·

> expected to be repaid In other words, they don't have the money. They just have an IOU, but that isn't money. What I deposited into the bank, that's money.

• tom-thistime 4y ago
  If you believe that IOUs by definition aren't valuable, then stay away from treasury bonds. If you're just drawing some kind of distinction between valuable things that aren't money and valuable things that are money then ok. I don't understand the point, but ok.
  • dheera 4y ago
    > If you believe that IOUs by definition aren't valuable, then stay away from treasury bonds. IOUs are like a lottery. Treasury bonds, OOM call options, they all aren't valuable on their own, there's just a chance I might win. In the case of treasury bonds, that chance is more like 99.99%, in the case of the call options, it might be 20%, but it's a spectrum, and never 100%. At the end of the day, my landlord isn't going to take a treasury bond for my rent payment, and neither is my supermarket. IOUs are not the same as hard cash.