(Image: Quoting the source, "A German woman feeding a stove with Papiermarks, which burned longer than the amount of firewood people could buy with them.")
I am interested to see what real value these government 'gilts' have. Maybe above zero? (Just a vague presumption.) Where did they come from? From what real assets is their value sourced?
I decided to look on DirectGov's website, on a page aiming to convince people to "invest" in gilts, just to see what fun flowery language they used in order to dodge the fact that they have 0 real value. Fun quote time!
"Gilts (or gilt-edged stocks) are bonds issued by the government which pay a fixed rate of interest twice a year. They are considered safe investments as the government is unlikely to go bust or to default on the interest payments.
However, you are not guaranteed to get all your capital back under all circumstances. Gilts, like corporate bonds, are bought and sold on the stock market where their price can go up or down."
And from the same page - admittedly about a different investment, but I loved the wording enough to want to bring it up here...
"Bond funds invest in several bonds (including corporate and government bonds) with different interest rates and different maturity dates. This reduces the risk to your capital. But because of the mix of investments, bond funds can't promise a fixed return; instead they aim for a 'target return'." (Oh, and I thought the stock market wasn't a scam...)
I guess, if Obama can convince people to invest in hope not backed up by anything real, then likewise the establishment can also sell these unbacked "assets".