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“Seigniorage".
The Central Bank releases fresh money into the system by buying bonds in the open market. Before 1991, the Government of India issued bonds to Reserve bank of India, who exchanged it with freshly printed currency. If the sovereign is unable to pay the bonds when it matures it simply prints money to repay the bond. This confers the right to borrow without repayment on the sovereign.
Capital is the financial value of any asset that can be monetized (Converted into Money). However, you should not confuse money for capital. Money is often used for current consumption. Capital is the finance deployed in the business operations, so that one can generate more wealth and a steady cash flow.
Capital is the financial value of any asset that can be monetized (Converted into Money). However, you should not confuse money for capital. Money is often used for current consumption. Capital is the finance deployed in the business operations, so that one can generate more wealth and a steady cash flow.
The most common form of dead capital in India is purchase of gold or a plot of land at a distant unknown area that the owner will never visit under normal circumstances.
issuing bonds
hedge against inflation.
the case of any financial institutions, the loans that are given out to their customers are assets in the books of banks and deposits that they take from various sources are their liabilities.
The bank parts a portion of all its deposits in Government bonds. This is known as the statutory liquidity ratio (SLR).
Capital expenditure is good for the person and the society as it enhances the productivity of economic systems leading to increased wages and employment.
treat savings as the first expense of the family
becomes his reward for delaying his gratification and spending the time to develop tools that enhanced his productivity.
Therefore, people who borrow at lower interest rates gain more than people who save money in banks and Government bonds.
8% while the new ones will pay only 7%. Then the face value of the existing bonds will go up by one rupee to adjust for the drop in interest rates.
capital gains on bond funds are taxable unless the retail investor holds the funds for at least three years.
none of them came from a wealthy background and some of them rose out of utter penury. Warren Buffett George Soros
Peter Lynch John Templeton Seth Klarman
IGHF coined by the great Jessie Livermore
one needs to have the knowledge and the right temperament to invest in stock markets.
limited liability companies
Money Market Funds 2. Bond Funds 3. Equity Funds 4. Balanced Funds
