Silver Bond

| For God so loved the world, that he gave his only begotten Son [Jesus], that whosoever believeth in him should not perish, but have everlasting life. John 3:16
Silver Bullion
| For God so loved the world, that he gave his only begotten Son [Jesus], that whosoever believeth in him should not perish, but have everlasting life. John 3:16

A silver bond is a financial contract in which one party makes a loan (in currency or metal like silver) to an issuer (usually with high quality credit rating) and is repaid in silver. As a bond, the borrowed amount must be repaid at fixed intervals, usually from annually to monthly. It can be a good investment for both parties.

A basic example of a silver bond is where one party takes a loan of 11 ounces of silver and repays 1 ounce each month, for a total of 12 ounces. This is an interest rate of 16% (before bullion fluctuations), or a coupon rate of 9.1% (total return on bond). If the value of the silver goes down in this time, it is good news for the borrower - a lower effective interest rate, and if it goes up, it is good news for the lender - a higher effective interest rate.

If a lender is very optimisitic on silver, or the metal backing the bond, and the borrower is very reliable, the lender may not even require an interest rate. Simply, "I give you x ounces of silver now, and you return those x ounces at these fixed intervals." This is 'betting long' through a silver bond. If the value of a silver ounce is $30 now, a loan of 12 ounces of silver paid back as 12 ounces in one year at $40 per ounce will give a total profit of $120 even without interest!

Use an amortization schedule to determine monthly silver payment. The advantage of using silver a bond backing are its reliability as a long-term store of value, standard as a global currency, and its reasonable price as a medium of exchange. In some cases, the bonds can be traded or sold as forms of equity. Try to decide if holding or borrowing on (issuing) a silver bond is a good option for you.

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