My mind is boggled by the idea that for the past six years,
at least, so much energy by central banks and politicians has been put toward
saving bond holders in currencies and companies. Buying a bond is an investment in debt. Whether it is the debt of a country or a
company, the buyer is assuming that the entity in which he is putting money
will be able to pay off that debt at the rate of return expected. This assumption includes the risk that the
entity will fail to pay that debt.
Buying a bond assumes the risk of default, which is why there is a
premium (interest rate) for the bond.
Any investor in bonds who is not prepared to lose the investment should
not have invested in the bond. Let’s
stop saving the bond holders. They knew
the risk, they took it, they have to pay when the risk pans out.
