Was playing Red Dead 2 and the gang comes into some Bonds. Apparently they’re worth money but idk how the gang gets a profit from it, or how bonds work in civilian life.
In: Economics
Bonds are a security the government sells to generate funds. It’s basically selling debt- a promise of “you buy this now and we’ll pay you a set amount in some number of years, which is your initial amount + interest”. The US government sells all sorts of bonds to raise money for all kinds of things- you may have heard of “war bonds”. Effectively it’s a way for the government to take out a loan from anyone willing to buy a bond. And it’s generally considered a safe investment because the US government and US dollar isn’t likely to go anywhere anytime soon. In fact, the US government is such low-risk investment that it can literally sell bonds with interest rates *less* than inflation, meaning it’s effectively borrowing money for literally less than free.
Nowadays, a lot of US bonds are electronic. Back in the day, everything had to be on paper- and physically possessing the paper bond meant you could cash it in. This means you can buy and sell bonds by literally exchanging the bond paper for whatever you were trading it for, and they directly have a value associated with them so you could just cash it in. Still works that way in the digital era, more or less.
I haven’t played Red Dead 2, but yeah, getting bonds means the gang members could cash those in directly for cold hard cash, or sell it to someone else for cash (at a discount) and they could cash it in. Either way, they could convert that bond to cash, and for criminals, “Cash is king”.
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