This has nothing to do with the Bond films, but I was on a roll and figured I'd go with it.A gold bond is a bond that is backed specifically by gold-- that is, it is repayable only by gold, and only by gold of a specified quality. This is contrasted with a currency bond, which is repayable in any form of legal tender. A bond itself is basically a contract that represents a loan, from the bondholder to the bond issuer. So issuer of a gold bond takes in some money, gives out a piece of paper, and agrees to repay the loan (usually with interest) with gold.
The specification of gold rather than any other currency meant that it was typically offered only by companies that had access to a reliable source of gold, for example mining corporations. It's somewhat akin to investing in gold (essentially trading money for a promise of gold), so when the price of gold is relatively stable compared to the currency at large (as during a recession), it can become a very attractive proposition.
This impression of reliability and value helps explain why it was chosen in 1882 as the name of a popular concoction of menthol, zinc oxide, and various binders and fillers, often applied to people's sensitive bits.
And how long has it been since gold has been more stable than the dollar?
ReplyDeleteNot in your lifetime, I think.
I got the impression that in the last couple of years it was looking better, although it still might not have caught back up.
Delete