Does Anyone Offer Bonds Redeemable in Gold?

Question: Paul, since no government seems capable of dealing with paper money, is there any agency or company that issues bonds redeemable in gold?

Paul Solman: Maybe, Smokey, but what kind of guarantee is THAT? I have a Russian bond from 1912, redeemable in a variety of foreign currencies. But when the Bolsheviks took over in 1918, they renounced all debts of the czar, as they had warned they would in ads they’d taken out in French newspapers before the Russian Revolution.

It’s the ISSUER of the bond whose promise you have to trust, not the asset in which the promise is denominated.

Updated 3:53 p.m. PS from PS: Lots of countries besides Russia have repudiated their debts, BTW, even within the past century. China, for example, in 1949. Cuba in 1961. North Korea in 1964. And if you Google “U.S. debt repudiation,” you get a stunning 58,100 results, as of this afternoon. It can’t happen here? You’d think not. But just in the past few years, a lot of things happened to our economy that couldn’t have.