Arguments against bonds

In Islamic economics, green economics and a few other types of economics, there are theories that argue the overall impact debt can cause to ecosystems and society is so negative that bonds should never have legal status.

These theories are all part of a larger economic category called creditary economics. In creditary economics there is no creditor, only a joint investor or partner. Parts of this same belief still exists in Western finance and legal precedents today. You will find them in places like usury laws, mortgage laws, and also in perpetual bonds.

When perpetual bonds were sold in the late Middle Ages, they were not sold as debt, but instead as an income stream or annuity instrument. Investors who brought these bonds were buying a future income instead of lending money. By this thinking, no interest was paid on perpetual bonds, despite the existence of a yield for such financial instruments.

Tags: Bonds, Money

Related Items:

• What is a Bond?
• Types of bonds
• Trading and valuing bonds
• Investing in bonds
• Perpetual Bond

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