I was born in early 2000’s and have not heard yet in any form or type. Also I wonder how much would it worth in today’s currency?
In: Economics
Bonds are basically pieces of paper saying someone (usually the government) owes you money. “Bearer” bonds are bonds that don’t have any register of who owns them so if you possess (“bear”) the physical piece of paper, you can legally redeem them.
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I’m pretty sure they were “negotiable” or they would be worthless to anyone except the original purchaser
Bearer bonds are a transferrable IOU, repayable on the stated date by “presenting” them at the bank acting as “paying agent”. Bonds have “coupons” attached to them, which are essentially tear-offs which entitle the holder to receive a small payment periodically, ie interest. You can “strip” the coupons, which are then separately tradeable, which has to be effect of turning the original interest bearing bond into one large non interest bearing bond and a number of separate, smaller interest receivables. This isn’t how the world works anymore, but you can find bonds issued by for example railroad companies which can be attractive because of the security printing. The die hard plot would not have worked because the police would be called as soon as Hans tried to present them for payment. “Negotiable” means transferable.
If I recall correctly a check is a non negotiable bearer bond. Even if the check is written out to person A, person B can legally cash the check. Banks may have policies against it, but if person B cashes the check no law is broken.
Bearer bonds are “payable to bearer upon demand”. So person A buys a $1000 bearer bond from an issuer (company, railroad, etc). Person A owes person B $1000 and gives them the bond as payment. Person B wants some guns/drugs/whatever and Person C sells them the whatever in exchange for the bond. This can go on for many transactions. In the end, Person X now has the bond and wants cash. They can take it to their bank and exchange it for cash and the bank gets the money back from the issuing company. The US government caught on to drug dealers moving large amounts of money with them in the 1980’s and made bearer bonds illegal to issue to stop this. People can still cash in the existing ones, though.
TL;DR – They are a way to make cash like transactions but much harder for police to trace. They can also have values much greater than currency so money can be more easily moved across national borders untraced, by carrying them as you travel.
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