A Fabulous Debt: Robin Wigglesworth on How Bonds Built the Modern World

00:00:31 Andrew Keen: Hello, everybody. It's Sunday, 09/27/2026. Yesterday, we did our weekly tech show, and we talked about an interesting conversation between, Nicholas Thompson, Azeem Azhar about whether we're living through an AI bubble. Many billions of dollars, involved in that one. If there is a bubble, we're all gonna lose our shirts, so to speak. One man who knows all about losing one shirt, so to speak, is my guest today. Robin Wigglesworth is, a leading financial journalist. He's editor of the excellently named, Financial Times, Alphaville, financial blog. It's a kind of geek anorak part of the FT. And he's also the author of an intriguing new book, a fascinating new book, a fabulous new book. It's called, appropriately enough, A Fabulous Debt, the epic story of how bonds built the modern world. Robin is joining us appropriately from New York, although he normally lives in, Oslo in Norway. Robin, apologies for such a long winded, introduction. But as I said, yesterday, we talked about the potential of there being an AI bubble, which is mostly financed, I think, privately through the stock market. Are stock market bubbles relatively insignificant compared to bond bubbles? Is there even such a thing as a bond bubble?

00:02:10 Robin Wigglesworth: Oh, there definitely is something, something like a bond bubble. I agree that stock market bubbles are actually, most of the time, reasonably inconsequential. And in fact, they're maybe sometimes even welcome. We occasionally do need people to dream more than be careful and to take leave of the senses and kind of throw money at the hot new thing because that's typically quite often when the way we see big leaps, big, big progress. But it is more dangerous when it's fueled more by credit, by lending, by debt, and specifically by bonds than anything else. If you think about the dot-com bubble, that was for the stock market, a major event. The stock market lost half its value in the United States from peak to trough in 2000 to 2002, 2003. But economically, it was not a major event whatsoever. In fact, it's one of the shortest, shallow recessions in US history. But when the bond market breaks bad, so in the 1870s, 1873 onwards in 2008 and very close in 2020, it tends to be very, very painful for the world.

00:03:23 Andrew Keen: Well, that time has come, Robin, for us to define bond and not James Bond, but these financial things we call bonds. What are they, and how can we compare and contrast the bond with a stock?

00:03:38 Robin Wigglesworth: Well, a stock is just a sliver of ownership in a company like Apple or Boeing or IBM or Tesla. A bond is a tradable loan. So it's a loan to that company or that country that you can also trade or buy and sell just like a stock.

00:03:56 Andrew Keen: Wow. Right. Look. It sounds inevitable, unavoidable, natural, but I know in your book is in part a history of bonds. So there was a point in history where there was no such thing as a bond. Is that fair?

00:04:11 Robin Wigglesworth: Yes. Well, credit is actually a lot older than most people think that, you know, even back in ancient Mesopotamia four thousand years ago, there was actually quite a vibrant system of debt. I mean, vibrant. It was surprisingly complex, but not very efficient and quite cruel and capricious at times. So people have always been lending to each other, whether they're lending silver or barley or seashells, and it's pretty anything that has value. But the bond in its sort of proper form, was invented by accident by the Venetians in 1171 because of war. Essentially, they needed to finance a big war with their liege, Constantinople, the capital of, the Byzantine Empire. And Venice was, extremely rich. It was the commercial center of the Mediterranean at the time. But they needed so much money that they couldn't just borrow it from the local bankers, the men with their banky tables sitting in the Rialto Square in Venice. And, they essentially forced everybody to everybody in the city to lend the government some money, proportional to their wealth. It was kind of a proportional involuntary war tax. But to soften the blow, they, paid 5% a year until they'd won the war, they thought, and they made the receipts tradable. So you could actually take that receipt and head down to the Rialto Square in Central Venice and sell it to somebody if you didn't want to hold that loan, and you just wanted the cash. And somebody else might actually quite want that 5% income stream, so they would be willing to buy it.

00:05:47 Andrew Keen: Why, Robin, did it take us? Maybe we're speaking about Western civilization. I'm assuming there's a parallel history of bond like products, in China and other civilizations. But why did it take so long to invent? I mean, Venice — what, the eleventh century [ed.: 1171 falls in the twelfth century] might seem a long time ago, but it's not in human history. Why didn't the Greeks, for example, invent the tradable loan?

00:06:21 Robin Wigglesworth: No. It's a great question, actually. And there is, unfortunately, to my immense annoyance, no great answer. So the Mesopotamians would put down their loans on clay tablets. And most of the time, they were made out to a specific person like I, Robin Wigglesworth, owe Andrew Keene a thousand pounds of silver or a kilo of barley, let's say. And but quite often, they would make the lender out to just be a merchant, a tamkārum [ed.: Akkadian for merchant]. And thereby, you could come make it tradable. So we don't know if the Mesopotamians traded them, but it's almost certain that they did. Because quite often these clay tablets, which we have found in cities like Ur in modern-day Iraq, indicate they did trade them. So it's probably always been the case that there's been some tradable loan in some form. But the reason why I think this Italian [prestiti], it was called, which is just the plural for prestito, or loan, is because you can see that actually taking off. That was something that was the Venetians at first hated it, but actually proved super valuable as they could use it for collateral, for trade. It kind of became de facto money, paper money before this really existed in Europe. So it's super valuable. Milan, Pisa, Genoa, Rome, they all copied this, and it spread from Italy to France, to Germany, to Spain, and eventually to the Netherlands. So you can see that kind of intellectual genealogy from those first prestiti in Venice to the present day.

00:07:53 Andrew Keen: I bet that gave you a good excuse, Robin, to go to Venice and Milan and Rome, do a little bit of research.

00:07:59 Robin Wigglesworth: Sad. I have been to Venice before, but only as a feckless student. I've not been there since writing this book. I was planning to go, but there are so many great fabulous histories written, and I've seen pictures. And I've been actually in the Rialto, so I didn't need to go back there to do any primary research. But I am planning, if my book does well, to do a victory tour there.

00:08:22 Andrew Keen: Well, I hope I can come with you. How much is the history of bonds or these tradable loans? How much is its birth and development and more and more central feature of our economy? How much is it bound up with the birth and history of capitalism itself? Do you have to have a bond market to have a capitalist economy?

00:08:46 Robin Wigglesworth: You don't have to because there have been societies that have been de facto capitalist without having a bond market, but they definitely go together. It was really the Dutch that took this Italian invention and transformed it into a proper market, a bond market rather than just selling a few bonds here and there. There you had all the cities of Amsterdam and Antwerp and states and individual waterworks that would pay for the dykes and turn into this, you know, frankly, quite remarkably complex bond market. And the Dutch really were the ones that I'd say invented modern capitalism. They also invented later on after the bond the first stock market in Amsterdam, and the first stock was the Dutch East India Company. So they definitely come together. Because if you think the Dutch East India Company is a great example of both how ingenious the Dutch were, how embedded they were in capitalism, and why the bond actually is maybe the unsung hero of this or villain depending on your perspective. But the Dutch East India Company only sold shares once, but it built a massive worldwide empire for the Dutch. You know, that was quite cruel and capricious as well, but it didn't sell stock to finance it. It sold bonds. It sold stock once and then a few small share sales afterwards. But the way it financed its expeditions, the way it financed its armies, its ships, that was through the sale of bonds.

00:10:15 Andrew Keen: Yeah. I looked up to prepare for this interview, Robin, I looked up dyke building on the Internet —

00:10:15 Robin Wigglesworth: Yeah.

00:10:21 Andrew Keen: And it sent me to some rather unfortunate websites. So I wouldn't advise anyone to do research online on dyke building. In all seriousness, though, bonds and I'm speaking as a complete financial idiot. Bonds seemed so much smarter in investment than stock. When you talked about the Dutch developing the bond market, taking the Italian idea, and making it real, was this in some ways a consequence of the ups and particularly the downs of the Dutch stock market, the tulip mania, of course, which is always seen as the ultimate example of irrational economic exuberance?

00:11:05 Robin Wigglesworth: Yes. And somewhat accidentally, but, the bond has almost always been structured and has worked most efficiently and most powerfully when it's safe or is seen as safe at least. So that's why the stock market's always been where the riskiest stuff, happens, essentially, the wildest stuff. Just because if you own a company, essentially, you know, the upside is unlimited and your downside is zero. The stock becomes worthless. The bond market, at best, you'll just get repaid. So it just doesn't tend itself to that kind of wild form of speculation. But there have been instances of insane, wild, out of control bond market speculation, And it has proven just as destructive, if not more so, than when we have seen things like the tulip mania or the South Sea bubble or the Mississippi Company bubble or even the dot-com bubble, for example, that we talked about.

00:12:07 Andrew Keen: So when does a bond become a scam? What happens can anyone sell a bond? I mean, I take the idea that a government bond has some value because governments just don't go away and usually don't collapse and somehow represent national wealth. But how do you establish a bond, and who determines whether it's viable, trustworthy, or not?

00:12:33 Robin Wigglesworth: Well, the government bond can get wiped out. You can actually buy some long defaulted Tsarist Russian bonds from for before 1917 that are collectors' items because they look very pretty bonds. Because they were kind of doubled as money for a long time, they were incredibly ornately decorated. The beautiful artwork, some of them. But there have been, just as we've seen in the stock market, outrageous scams. And my favorite one that is in my book, Fabulous Debt, is, when a Scottish adventurer mercenary called Gregor MacGregor, he fought in the Napoleonic Wars, bit of a rascal, wasn't cut out for all ordinary soldiering, moved to Latin America, to try his fortune as a mercenary there. He fought, with Simón Bolívar in Venezuela. He married his Bolívar's cousin. He fought around all around Caribbean. He ended up in Honduras where he met the local king who granted him the title of cacique of a verdant land called Poyais on the coast, where, you know, there was gold and honey and fertile plains and, mahogany woods. And he went to London and had songs sung about this beautiful, magical place and its capital, Saint Joseph, that he said was incredible. He also then sold several bonds on the London Stock Exchange, raising hundreds of thousands of pounds, quite a fortune back then, to basically help develop this incredibly full potential country but sadly lacking European settlers as he saw it. And he managed to get people to even to move to this beautiful land. They up sticks. They sold their land, mostly Scottish people because he was descendant of Rob Roy MacGregor, a famous Scottish, outlaw, rebel. And, unfortunately, it was a giant figment. We don't know whether it was outright scam. He was I mean, he was definitely lying, but he might have just been an incredible fantasist. But it was definitely untrue. Poyais did not exist. There was no country capital called Saint Joseph. It was a swampy hellhole. Some of the people when they discovered this who'd up uprooted their life, they committed suicide. Many other people perished from famine and malaria, and only a handful made it back to London to share the tale. So that's, you know, the man who invented the entire country to sell bonds is one of the most epic scams in the bond market's history, but there have been others, over the years.

00:15:12 Andrew Keen: Yeah. No jokes about the susceptibility of the Scottish. I do love the name Gregor MacGregor. I don't think I'd buy any land or otherwise from someone called Gregor MacGregor. But coming back to him, why was he selling bonds and not stock? What would be the difference? I mean, everyone in you know this better than I do, Robin. Everyone in America is always selling you something or other, a stock in there's the old joke about, you know, selling you beachfront property in Florida. Why would MacGregor pull off the bond fraud versus the stock fraud?

00:15:47 Robin Wigglesworth: Well, mostly because that's where all the action was. It's, you know, it's like the old Dillinger quote [ed.: the line is usually attributed to bank robber Willie Sutton], like, why do you rob banks? Because that's where the money is. And at the time, the money was in the bond market, not the stock market. So there were some stocks and it did this bubble. So if we zoom back, so England financed its war against Napoleon by selling an ungodly amount of consols, consolidated annuities. This was kind of the treasury market of Britain before the treasury market existed. It was kind of the risk free rate of the world. And after they won that war, all those bonds that were often sold that were perpetual bonds, so they didn't mature at a specific day, They just they existed forever until Britain decided to pay them back. They had been sold at, let's say, 80p on the pound. They suddenly became worth a 100p on the pound because England had won. So suddenly, all these investors had made out like bandits from buying consols to help finance the war effort. They were looking around for new things to buy. So Prussia so Nathan Mayer Rothschild, the famous banker, he started getting other countries to issue bonds in London. So Prussia was one of the first ones. Then Italy, some of the Italian states, then Spain, Russia. And eventually, you know, the returns on these bonds were so conservative or so low that British people had made so much money, from these bonds. Well, they went over their skis, and they started investing in the bonds sold by newly independent countries in Latin America, like Venezuela, Brazil, Argentina. So there was this, basically, this massive bond bubble of now what we would call an emerging market bond bubble. But at the time, it was just it was almost like venture capital. People were investing in these hot new countries that were emerging. And in that mania, a country like Poyais doesn't sound so outlandish. People didn't have proper maps. People didn't really know about this, but they knew there were new countries. America had been born in people's living memory. So it didn't sound so incredible, and it made perfect sense for MacGregor to sell bonds on the London Stock Exchange because there were millions of pounds worth of bonds being sold all the time there then.

00:18:00 Andrew Keen: Yeah. It sounds like it should be part of a novel, Latin American magical fictional —

00:18:00 Robin Wigglesworth: Yes.

00:18:00 Andrew Keen: — literature, Márquez, or a Herzog movie about dragging opera houses over mountains in, in Brazil. [ed.: In Herzog's Fitzcarraldo (1982), set in Peru, a steamship is hauled over a hill to fund an opera house.] This might be a bit of a chicken and egg question, Robin, and I know a lot of the questions about finance are. But did the emerging bond market, as it became more and more central and states began financing wars, raising capital to fight wars, and build one kind of infrastructure or another, did that cause the emergence of the modern state, or is it the other way around, or is it a bit of both?

00:18:47 Robin Wigglesworth: No. I mean, the it's a cop out to say it was a bit of both. It was it is a chicken and egg situation. I think I decided to time the birth of the bond market with Venice in 1171. But there you can make an plausible argument that Venice was just a city state. And the Dutch that issued bonds, well, they were mostly, individual parts or towns again of the Netherlands. And quite often, other bond sales were whereby the royal families. So the king of France would issue bonds, not necessarily France as a nation state. And the real first true sovereign bond, as people call it, government bond, was the UK. It was actually how they founded the Bank of England, the what would become Britain's central bank. But, essentially, you can see this fascinating trend, and I didn't actually appreciate this before writing the book, A Fabulous Debt. But, in the nineteenth century, you can kinda see that Britain has benefited from the fact that it isn't a fickle royal family who's issuing the bonds. It's parliament with controls of power of the purse. And to encourage people to buy consols, they are releasing financial numbers for the government. They are actually exercising a little bit of transparency, remarkable transparency for the era. And thereby, Dutch investors, German investors, French investors actually prefer investing in British bonds over other countries' bonds. So Britain became stronger because it was able to borrow more cheaply than other countries, thanks to being more accountable, more democratic, more transparent. And in the nineteenth century after the Napoleonic Wars when Rothschild starts bringing all these other countries to the bond market, well, he is cajoling them to do the same. He's encouraging them to open up the books a little bit, to maybe make the issuer, the Estates General rather than the royal family or the king of Prussia or whatever, as a way to entice British investors. He said, look, if you want to borrow as cheap as possible, then you have to do what British investors now expect. And in a small way, you can kind of see this causing a bit of a feedback loop. The countries that are open, transparent, and reasonably well governed, at least for the time, they borrow more cheaply, and they therefore become more prosperous. And that, again, encourages other countries to do the same, and it spreads a little by that way.

00:21:13 Andrew Keen: And in a sense, could one argue that it was a kind of Pandora's box? Because, of course, these, quote, unquote, liberal open countries used a lot of these this capital to colonize the world. You mentioned the Dutch East India Company, British East India Company, of course, and the colonial history of the UK, the colonization of much of Asia, Africa, and, of course, we've already mentioned Latin America. So there is a dark side to this history of bonds, isn't there, Robin?

00:21:48 Robin Wigglesworth: Yes. And, look, it's inescapable, and it shouldn't be ignored that bonds, like most social technologies or financial technologies, it's a tool. And we humans are very bad at using tools for we use them in excess, but we also use them for good purposes and bad purposes. Bonds have financed wars of liberation and they've financed wars of conquest. They have financed slavery. They have financed plantations. Slave-driven plantations. They have financed hospitals and vaccines as well. So anything that's good and bad, you don't have to scratch too far to find some bond somewhere, in the background. But I just see this more as a sad lamentable part of human history rather than, than a sign of the tool being wrong. It's like the old quote, from the crooked timber of mankind and never a straight thing was made. And so it is for the bond market as well.

00:22:49 Andrew Keen: Yeah. That's from Immanuel Kant. I'm not sure he knew much about bonds. And, of course, there's that other famous quote, guns don't kill people. People do. So I guess you could say the same about bonds. You — we've talked a lot about Europe, Venice, Byzantium, England, France, Holland. I'm gonna mention the United States. I know that there are some curious figures in your book, Americans who one might not expect to come up in a book, on the global financial system. Lewis Tappan, for example, an American missionary. On the other hand, Abraham Lincoln comes up. He comes up, it seems, these days in every book. Tell me about how bonds came to the Americas. Did the founding fathers, the initial war of the so called war of liberation, the war against the British, was that funded by bonds?

00:23:46 Robin Wigglesworth: To a large extent, yes. So all the individual colonies or states as they would become, they issued bonds, to their own people and to the Dutch and other countries to finance that war. They all defaulted, and Alexander Hamilton famously assumed responsibility as part of the federal government. It made all those debts federal debts.

00:24:07 Andrew Keen: Is that the guy they did the musical about?

00:24:09 Robin Wigglesworth: Exactly. So, there are some great lines in the musical that actually ring quite true, and they're quite evocative. Like, he said that this provided a financial enema to the American economy after independence, and it's very true that these new treasury bonds, these federal government bonds that he issued to pay for these state debts, they actually proved incredibly valuable to the American economy then because they were treated like money in a country that was incredibly short of coins, essentially, of silver and gold and other things that people could treat as money that held back the economy after the war. And, you know, you can see I mean, these Alexander Hamilton also probably owned slaves even though he was an abolitionist. Many of the founding fathers did this. But you can see this movement of which, Hamilton was a part of as well of the abolitionist movement that they were hugely influential in the US for many reasons. But not least, they actually do have fascinating little cameos in the history of the bond market as well, which, you know, I will admit is not the most important part here, but at least it was quite delightful for me when I was researching the book.

00:25:19 Andrew Keen: And what about, you mentioned slavery and founding fathers. Jefferson, the most controversial of all the founders, who also was instrumental. We did a show a few months ago on the Louisiana Purchase. Was —

00:25:32 Robin Wigglesworth: Yes.

00:25:32 Andrew Keen: — Louisiana Purchase financed by bonds?

00:25:36 Robin Wigglesworth: It was entirely financed by bonds. The United States had no money to pay for this, and it was thanks to Hamilton restoring America's credit, but essentially making a credible borrower among overseas investors that allowed it to do so. What was it's kind of fascinating. It was actually a British merchant bank called the Baring Brothers, that organized the financing. So even though the UK was technically in war was at war with France at the time, and the Louisiana Purchase was essentially giving Napoleon finance the finances to keep fighting, there was a British, bank that arranged it all. And it ended up, I think, proving one of those rare and I'm gonna sound like one of those characters from The Office, but, win-win-win situation, where Britain actually did manage by you know, France got dislodged from the Western Hemisphere because of this, which actually was fine with Britain at the time. Napoleon got the money he needed to fight a little bit longer. America radically expanded, its reach, gained control of the Mississippi, which was hugely important. And Barings, the bank that arranged it all, well, they made out like bandits. They made probably, if in inflation adjusted terms, one of the biggest investment banking fees in the history of mankind.

00:27:03 Andrew Keen: Barings' story didn't end so well, did it?

00:27:06 Robin Wigglesworth: No. No. They flailed around. They lent money to Argentina in another one of these emerging market crises and eventually got undone by a rogue trader. It's like so many of these organizations that the sons and the grandsons and they're always sons. Right? They don't generally have the talents of their forebears.

00:27:28 Andrew Keen: Yeah. And I'm not sure your win-win-win would include not everyone won. Of course, the indigenous peoples who, quote, unquote acquired in this deal didn't make off like bandits. But that's, another story. What about Lincoln? What's his role? Did he finance the Civil War, with bonds? Did both sides finance? Can you I mean, do you have wars where particularly civil wars where both sides are being financed by the same markets?

00:27:59 Robin Wigglesworth: Ish. So the South sold bonds as well. Famously, it sold cotton bonds where it would pay the interest in cotton. And some British investors bought those as kind of a bet on the South potentially winning. But the North did control all the big money centers, so Boston, Philadelphia, and New York. And Abraham Lincoln, was quite financially adept. He was a very clever man. And but he basically let his treasury secretary handle all that, a guy called Salmon Chase. He was not very competent. So he, in turn, in practice, enlisted a private banker called Jay Cooke to arrange all that financing. And Jay Cooke did, frankly, a phenomenal job. And, frankly, that was a I'm not a Civil War historian by any stretch, not even an amateur one. But from my reading and how it was presented in the South and by Ulysses S. Grant, A large reason why the North won was the fact that Jay Cooke proved such a, a wizard at selling bonds and being able to finance the North's war efforts far more adeptly than the South was able to.

00:29:08 Andrew Keen: So let's talk some numbers. I know you've suggested that the entire is it the global bond market's worth about a $174 trillion, which — I don't even know there was $174 trillion in the world? The American national debt a few months ago hit $40 trillion. Is that national debt mostly owed on bonds?

00:29:33 Robin Wigglesworth: Overwhelmingly, national debt is owned by bonds. So, I mean, unfortunately, the data gets really quite murky and iffy in some cases. But broadly speaking, the amount of bonds out there in the world is actually close to $200 trillion now. It's grown since the that first draft of the book was finished. And a major chunk of that is in the form of bonds, and a lot of that is in government bonds. So I think the last numbers I saw was that all global debts, everything, like, every bank loan, every bond, everything is around 370 trillion. So of that 200,000,000,000,000 is bonds, and of that, around 130 trillion is government bonds. It is overwhelmingly where governments finance themselves.

00:30:22 Andrew Keen: Robin, you're talking to me from Hudson Street in Lower Manhattan, not too far from Wall Street. How much is the history of Wall Street, the history even of the City of London? You've lived in the City of London. You worked for the FT, so you know that very well too. How much is the emergence of these places — [unclear], I guess, as Frankfurt — too, bound up with the history of the bond market. Are they essentially the same histories?

00:30:54 Robin Wigglesworth: Yes. And I think this is I mean, I hate to say that I'm a bond truther, but I do feel that the way that people think of Wall Street and the City of London as of stock markets is quite reductive and, in fact, almost inaccurate. The City of London, its two big massive growth periods. So that was in the — early nineteenth century and Nathan Mayer Rothschild and some of the other banking houses then. That was built on the back of bonds and Britain's role as the biggest bond center of the entire world then. It became the banker to the world, we say, but, really, it was the bond market. And that again was repeated again when the City had its renaissance from the sixties and seventies onwards. Again, that was built on something called Eurodollars and Eurobonds. But that was kind of a resurrection of the old stateless, somewhat opaque and murky global bond market that Rothschild had first birthed. And same thing with the New York Stock Exchange. The New York Stock Exchange literally was a bond market for a long time. It only traded bonds. It was there were no stocks in America back then. So it started as a bond, market. In fact, it was a bond market crisis in 1792, where Alexander Hamilton had to step in to, prevent a calamity that caused the brokers and the traders of bonds on the streets of New York to come together under a buttonwood tree and basically come up with some rules for themselves. And that Buttonwood Agreement is kind of the genesis document for the New York Stock Exchange. They first moved to a Tontine Coffee House, it's called, and that is now today's New York Stock Exchange. And for a long time, the most of the trading on the London Stock Exchange and the New York Stock Exchange was actually in the form of bonds. It's actually really only in the past hundred years or so that has changed.

00:32:54 Andrew Keen: And in the history of bonds, a hundred years is not a very long time.

00:32:58 Robin Wigglesworth: No.

00:33:02 Andrew Keen: What about the impact of digital? You're a financial geek. Your last book was Trillions, on index funds. We're not gonna talk index funds today and changing finance. Have innovators in Silicon Valley and elsewhere come up with digital crypto versions of bonds or have bonds or analog bonds or began as analog bonds in the very analog Venice? Have they remained as analog as they were seven, eight hundred years ago?

00:33:38 Robin Wigglesworth: No. And this is I mean, I always joke that bonds are really the original decentralized finance, the original DeFi.

00:33:46 Andrew Keen: The network product.

00:33:48 Robin Wigglesworth: Yes. Exactly. Like, rather than borrowing from one bank or three banks, you're really borrowing indirectly from thousands, maybe millions of people. So it is a decentralized system. But bonds have been, for a long part of its history, remarkably analog. If you'd basically picked up the Doge of Venice, in twelfth century Venice, and transported them to Amsterdam in the sixteen hundreds or taken Alexander Hamilton to London a century later, he would have recognized a lot. But I think as computers and technology kind of invaded society in every aspect in the sixties and seventies onwards, finance was changed quite radically and the bond market as well. So bonds were still traded largely on the phone, and that has continued up until this present day. It's only really recently that the bond market is undergoing its true electronic revolution, and they started to trade just like the stock market. But computers allowed people to do all sorts of clever or maybe too clever things, and get more creative. So suddenly you saw this massive explosion of financial innovation for better or worse, but you saw, securitization. The idea that you can take any sort of a loan or anything cash flow, really, something that pays a regular amount of money, you can turn that into a tradable bond. So mortgages, you can take lots of mortgages, package them up, wrap them in a bow, and sell it as a bond.

00:35:24 Andrew Keen: And that's why how you get to 2008, of course.

00:35:27 Robin Wigglesworth: Yes. Exactly. And it's a valuable I would argue it's actually a valuable financial technology, but, god, we humans abuse our technologies, and securitization is definitely one of the ones that has been taken almost to the breaking point or beyond.

00:35:45 Andrew Keen: Yeah. You mentioned the Doge. One wonders whether Elon Musk wrote your book — or read your book — before coming up with his term. You talked about bond crises, which are, in many ways, are much more dangerous than stock market bubbles. You mentioned 1873. We did a show on that recently with another economic historian, which, of course, created a global recession right up almost until the First World War. Was there a bond crisis, in the late twenties? Was the Great Depression a depression in part of the bonds, or was it more of a stock market depression? I know that 2008 was more of a bond crisis, but, how do we compare and contrast? Or when you have a stock market crash or crisis, is it almost inevitably also a bond market one too?

00:36:41 Robin Wigglesworth: No. It's a fascinating subject and one I haven't made my mind up myself. I mean, I definitely don't think it was a stock market crisis. I mean, the stock market drop in 1929, the Great Crash, is obviously incredibly evocative and was incredibly disruptive and caused a lot of economic misery as well in addition to the financial misery. But it wasn't really the cause of the depression. There are many other things, and I'd say the bond market played just as big a role as the stock market crash. There were a lot of early generation mortgage backed securities, for example, sold. So the skylines of Chicago, New York were transformed at the time, and that was largely paid for by bond sales. And a lot of that basically got obliterated. And because of the losses, that kind of just compounds the losses from the stock market, and it just ripples across economy. There was no deposit insurance. There was no basically, there were no guardrails to prevent what is unfortunately, these crises do come occasionally. But back then, there was nothing to prevent a crisis from becoming a catastrophic calamity. And I think that's really the real cause for the Great Depression. It wasn't per se a stock market crash or a bond market crash, though I'd argue they both played equally large roles. It's more that we didn't hadn't really almost invented, the guardrails to the same extent, the regulation of investment, securities, investment funds, it's things to make banks safer. And the authorities responded very badly. And then also, every other country then responded with protectionism and insularity and xenophobia, and things just spiraled. So it was kind of a toxic broth of everything. And bonds were in the mix, but I don't think personally at least of the Great Depression as a bond market crisis or one that was caused by it or in particularly, exacerbated by it either.

00:38:48 Andrew Keen: So and, presumably, the Second World War was the bond market or bond traders' wet dreams, so to speak?

00:38:56 Robin Wigglesworth: Well, to an extent, wars always require vast amounts of money, vast amounts of bond issuance. So the Liberty Loan Program of World War I is just fascinating and colorful and interesting. World War II put that on steroids. And the thing is that is usually good for bond traders, but, of course, in a war of the sort of that scale and importance, everything gets subsumed to the importance of the war effort. So essentially what the Federal Reserve and the government did then, working as one, there was no independent central banking then. They essentially just said we will cap interest rates. We are gonna cap interest rates below inflation. And we're going to basically encourage banks or even force banks to lend all the time to us. So it was basically the nationalization of America's financial system to help finance the war effort. So, bond investors did not have a great time, during World War II or indeed its aftermath.

00:40:02 Andrew Keen: If you make, if your book, Robin, gets picked up by Hollywood, they can't call it The Bond because that movie's already been made. It was a Charlie Chaplin movie about liberty bonds, which, adds to the sort of the mystery and the ironies of the history of bonds, don't they? Because didn't he finance the film with bonds, and it was also a film designed to promote the sale of bonds?

00:40:33 Robin Wigglesworth: Well, he didn't finance it directly with bonds. He financed it himself, and Charlie Chaplin actually owned a lot of bonds. He was incredibly financially sophisticated. There's a great story in Lords of Finance by Liaquat Ahamed, who's been one of your guests, about how Charlie Chaplin heckled, Winston Churchill over a dinner about his decision to go back on the gold standard, which I thought was delightful. But he did finance this film. It was released in both the UK and the US, and he played a pivotal role in getting the public to buy bonds in both countries, during World War I. The film is not, I'd say, one of his most artistically impressive works for the era. It's quite blunt, as blunt as that mallet, you can see there. But, essentially, it basically says that there are all sorts of different bonds, types of bonds. The bonds of lib the bonds of, matrimony, the bonds of friendship, the bonds of marriage. But the most important is the war bond. And it rather unsubtly says that this is important to beat the Kaiser. And the final scene shows Charlie Chaplin, walking up to a somebody dressed as the German Kaiser at the time and beating him over the head with a that large mallet called Liberty Bonds. So, it was quite a telling thing. But luckily, I think it's out of copyright now. So you can watch it freely. And if there's anybody in Hollywood watching, we can still steal that title back.

00:42:06 Andrew Keen: And, of course, Chaplin followed it up with The Great Dictator, which was another way of bashing another German leader on the head. Finally, Robin, we began with the fear that we're living through an AI bubble.

00:42:24 Robin Wigglesworth: Mhmm.

00:42:24 Andrew Keen: What about a bond bubble? You noted that 2008 was the last one. It almost brought the entire global economy down, whatever that means. You also noted after the Great Depression, that the international system was like a dike, I guess, was made more secure. Does it worry you, the size of the US debt, the size of this market? I mean, if there was another bond crisis, would everything go down?

00:42:57 Robin Wigglesworth: There were many facets to it. I am both more relaxed than most people I know, but more worried than I used to be, if that makes sense. There was a giant bond bubble in that bond yields and bond prices were very high [ed.: when bond prices are high, yields are low] when interest rates were low and the economy was kinda trapped in this post financial crisis hangover almost. And ever since then, basically since 2022, bond markets have had quite a rough time. So prices have sold off and interest rates have gone up. And that's kind of what I think we're seeing now in the US treasury market, the US government bond market that interest rates are heading up because people don't really want to hold bonds as much. And that's because of inflation caused by the war on Iran. It's because of all sorts of different factors. There are so many things that get baked into bond yields. What I do worry about when it comes to the AI in particular is that, like we talked about equity market bubbles, stock market bubbles are not really that dangerous most of the time. Because it's kind of the stock market doing what it is supposed to do. It is supposed to be a venue for speculation, and you cannot have somebody making money without occasionally losing money as well. Can't just always go up. It has to go down. And most people, if you buy a stock, you might not be happy when it drop loses half its value, but you can't say that is something you never expected. The bond market is different. And right now, some of these tech companies are issuing an astonishing amount of bonds to finance their data centers. They used to finance it all with all the cash they were making from their other businesses like Facebook and YouTube and Amazon and things like that. Now they are borrowing a lot of money. I think it's close to 500 billion already this year, and there's more coming. These are still extremely profitable companies, extremely big profitable companies, so I'm not worried yet. But the scale of what we can see coming down the pipe in terms of debt, like, how many bonds are planning to sell and how much of this is what accountants call off balance sheet. So if I sell a bond and I'm a public company, I have to report it. It's publicly traded. All the data's out there. All the information, everybody can look it up. But they're increasingly getting financially creative, inventive in how they structure this stuff. That reminds me a little bit about 2008. Not in that, like, oh, this is another financial crisis coming, but in that, I think it's unhelpful that this is obscuring the true scale of the borrowing. So is this a disaster waiting to happen? No. Not yet. But I do think that the trend lines are now definitely pointing in a, suboptimal direction. Put it that way.

00:45:54 Andrew Keen: Yeah. And it ties with an interesting piece I read today on the coming AI meltdown by Robert Kuttner. So it's worth reminding ourselves that all these enormously, controversial, data centers are being funded not by the public, although, I guess, indirectly through some of the money invested in AI start ups, but mostly through the bonds issued by companies like, Google, and Nvidia. So interesting. Well, fascinating, conversation, a fabulous conversation about a fabulous debt by my guest, Robin Wigglesworth. The epic story of how bonds built maybe in some ways undermine the modern world. Robin, congratulations on the book, and thank you, so much for enlightening us about a subject that most people find very, very confusing.

00:46:51 Robin Wigglesworth: Yes. Well, it confuses me sometimes as well, but it's fun to learn about new things, I feel. It keeps me sharp, I think, hopefully. But thanks for having me on, Andrew. I really loved it.