Economies of Scale

government bonds: a fixed, guaranteed return for cash you don't need right now

Buy a bond

Pay cash now, to ANY country's own government -- not just the one your company is located in -- and get your principal back plus a fixed, guaranteed return once the bond's own term ends. Unlike a loan's own floating rate, a bond's rate is locked in the moment you buy it: later changes to a country's economy never touch a bond you already hold.

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Bond rates by country

A country with a weaker current State of the Economy offers a higher rate -- the mirror image of how a stronger economy makes a LOAN cheaper (see "Loans"), a weaker one makes a BOND more attractive, the same sovereign-risk-premium reasoning a real government facing a downturn has to pay investors more to hold its debt. A government's own credit rating moves the rate the same way on top of that: a badly run treasury has to pay more to be lent to. Each government can only borrow so much in total, so a country with no room left stops issuing bonds however good the rate looks.

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