What does it mean for the state to issue national bonds

That is, the state borrows money from the people, with interest!

The reason why the state issues treasury bonds is mainly to regulate the amount of money in circulation.

Generally speaking, there are two purposes for the issuance of treasury bonds, one is to raise funds for infrastructure construction and stimulate domestic demand. Another use is open market operations.

means aimed at regulating the amount of money on the market for Western countries.

The second is more significant, when there is too much money in the market, ** through the issuance of treasury bonds to collect funds in the market to prevent inflation and regulate interest rates.

2. Major international treasury bond issuance.

The treasury bond market is divided into two levels, one is the treasury bond issuance market, also known as the primary market.

The second is the treasury bond circulation market, also known as the secondary market.

The primary market is like the wholesale market, and the secondary market is like the retail market. Whether the primary market is smooth or not is crucial to the issuance of treasury bonds. Generally speaking, there are four ways to issue treasury bonds.

Since the reform and opening up, people are getting richer and richer, and there is more money and rice leftover, so they will think about investing, so there are **, do, philately, art collection, etc., and there are various investment methods, and so on. Among the various investment methods, treasury bonds can be said to be unique and favored by investors. In the minds of the common people, the national bonds are issued by the state, and the state has a lot of money, and there will never be any borrowing without repayment.

Investing in government bonds is not only less risky, but also more profitable than bank savings. Therefore, the national debt is known"Gilts"。

The reason why the state issues treasury bonds is mainly to regulate the amount of money in circulation. ** Raise funds for infrastructure construction to boost domestic demand. The purpose of open market operations is to regulate the amount of money in the market, and for Western countries, the second is of greater significance, when there is too much money in the market, to collect funds in the market through the issuance of government bonds to prevent inflation and adjust the expected annualized interest rate.

Generally speaking, the issuance of treasury bonds has the following purposes:

1. Raise military spending.

In times of war, military expenditures were enormous, and in the absence of other means of financing, they were raised through the issuance of war bonds. The issuance of war treasury bonds is a common method used by all countries in wartime, and it is also the first origin of treasury bonds.

2. Balance fiscal revenue and expenditure.

To balance fiscal revenues and expenditures, we can adopt the methods of increasing tax revenues, issuing more currency, or issuing treasury bonds. Compared with the above three methods, increasing tax revenue is a practice taken from the people for the people, although it is a good method, but there is a certain limit to increasing tax revenue, if the tax is too heavy and exceeds the ability of enterprises and individuals to bear, it will not be conducive to the development of production, and will affect future tax revenue. The issuance of additional currency is the most convenient option, but it is the least desirable because the issuance of additional currency to cover the fiscal deficit will lead to severe inflation, which will have the most severe impact on the economy.

In the case that it is difficult to raise taxes and it is not possible to increase the issuance of currency, it is still a feasible measure to make up for the fiscal deficit by issuing treasury bonds. **Through the issuance of bonds, the idle funds of units and individuals can be absorbed, and the country can tide over the period of financial difficulties. However, the issuance of deficit government bonds must be moderate, otherwise it will also cause serious deflation.

3. Raise construction funds.

In order to carry out the construction of infrastructure and public facilities, a large amount of medium- and long-term funds are needed for this, and through the issuance of medium- and long-term government bonds, a part of the short-term funds can be converted into medium- and long-term funds for the construction of large-scale national projects to promote economic development.

4. Issuance of borrowed treasury bonds.

In the peak period of debt repayment, in order to solve the problem of debt repayment, the state issues loan and exchange treasury bonds to repay the old debts that are due, "which can reduce and disperse the country's debt repayment burden."

The issuance of national bonds by the state means the following: 1) maintaining a fiscal balance, 2) military spending, 3) raising funds for large-scale infrastructure and livelihood projects, and 4) rotating national bonds.

1. Maintain a balance between fiscal revenue and expenditure.

The primary purpose of the state's issuance of treasury bonds is to maintain a balance between fiscal revenue and expenditure, and under certain circumstances, an appropriate fiscal expansion policy is conducive to the stable development of the economy.

At the same time, if there is too much money in the market, the issuance of treasury bonds will help to withdraw money from individuals or institutions, which is conducive to regulating inflation.

2. Military spending.

In turbulent times, one of the main purposes of issuing Treasury bonds is to sustain military spending, and the U.S. Treasury debt is a typical example, during the wars in Afghanistan and Iraq, trillions of U.S. Treasury bonds were issued to maintain huge military spending.

3. Raise funds for large-scale infrastructure and livelihood projects.

When the state invests in the construction of large-scale infrastructure and people's livelihood projects, the investment cycle is long and the demand for funds is large, and through the issuance of medium- and long-term treasury bonds, the whole people are mobilized to solve investment problems, such as the construction of the Three Gorges Water Conservancy Project and the construction of the Beijing-Guangzhou Railway.

4. Rotation of treasury bonds.

After the maturity of the current treasury bonds, in order to be able to effectively convert, new treasury bonds are often issued in advance, so that the maturity of the treasury bonds can be effectively extended without affecting fiscal revenue and expenditure.

The advantages of buying treasury bonds are: 1. security, 2. strong liquidity, 3. high interest rates, 4. convenience of buying and selling, and 5. high and stable returns.

1. Security. A high level of security, the treasury bond is guaranteed by the credibility of the **, which is extremely high and almost risky. The investment threshold is low, which is very suitable for ordinary investors to invest.

2. Strong liquidity. Listed Treasury bonds are highly liquid because they are listed on exchanges and have a lot of investors.

As long as the ** exchange is open, investors can entrust trading at any time. Therefore, investors who do not plan to hold it for a long time are better to invest in listed treasury bonds to ensure a smooth disposal.

3. High interest rates. Treasury bonds have a higher interest rate compared to bank deposits, and for many people who don't know how to manage their finances, keeping money in the bank is the only way.

We might as well try to buy treasury bonds, which not only have a higher interest rate than bank fixed deposits, but also have a higher interest rate on early withdrawal of treasury bonds than on early bank fixed deposits.

4. Convenient for buying and selling. **The sales department has opened self-service entrustment. Therefore, the investment in listed treasury bonds can be directly entrusted through **, computer, etc.

There is no need to go to the bank or counter in person to deposit money or buy unlisted treasury bonds, which is convenient and time-saving, and there are many outlets for the sale of treasury bonds, which is convenient for purchasing and exchanging treasury bonds, and the procedures are simple.

5. High and stable returns. All listed Treasury bonds have high returns compared to bank deposits.

This high profitability is mainly reflected in two aspects: first, high interest rates. The yield at the time of issuance and listing of treasury bonds is higher than the interest rate on bank deposits in the same period.

Second, while enjoying the convenience of withdrawing (selling) demand deposits at any time, their yields are much higher than the deposit interest rate. <>

1. Balance fiscal revenue and expenditure. Increasing tax revenues, issuing more currency, and issuing government bonds are common methods for balancing fiscal revenues and expenditures. However, increasing taxes will increase the tax burden on enterprises and individuals, and the issuance of additional currency will risk causing inflation.

Therefore, when it is not feasible to raise taxes and issue additional currency, the state will balance the fiscal balance by issuing government bonds, and make up for the fiscal deficit with idle funds.

2. Raise construction funds. Large-scale infrastructure and public facilities construction projects in the country usually require a large amount of capital and a long implementation period, and the state can raise funds for the projects through the issuance of medium- and long-term treasury bonds to reduce the financial pressure.

3. Repay the maturing national debt. When the issued treasury bonds mature, if the financial funds are more tight than Li Xiao's, then new bonds can be issued, and the new bond funds raised will be used to repay the principal and interest of the old mature bonds.

4. Raise military spending. This is a less common type of trigger purpose, and it is common to issue government bonds to raise military spending in the event of a war in the country. It is also known as a war national debt.

1. Procurement of military spending.

Military expenditures during the war were enormous, and in the absence of other means of financing, they were raised by issuing war bonds. The issuance of war treasury bonds is a common way for all countries to use in wartime, and it is also the original origin of treasury bonds.

2. Balance fiscal revenue and expenditure.

Generally speaking, the balance of fiscal revenue and expenditure can be carried out by raising taxes, issuing additional currency, or issuing government bonds. Compared with the above three methods, the increase in taxes depends on the private and the private. While this is a good approach, there is a certain vertical limit to increasing taxes.

If the tax is too heavy and exceeds the ability of enterprises and individuals, it will not be conducive to the development of production and affect future tax revenue. The issuance of additional currency is the most convenient method, but this method is the most undesirable, because the method of issuing additional currency to cover the fiscal deficit will lead to severe monetary inflation, which will have the greatest impact on the economic economy. If it is difficult to raise taxes and it is impossible to increase the issuance of currency, it is still a feasible measure to adopt the method of issuing treasury bonds to make up for the fiscal deficit.

**Through the issuance of bonds, the idle funds of units and individuals can be absorbed, helping the country to tide over the period of financial difficulties. However, the issuance of deficit government bonds must be moderate. Otherwise, it will cause a serious tightening of the currency.

3. Raise funds.