🩻 Bonds == Good (If You Have Enough Money)

Sovereign wealth funds buy bonds to control the money flow

In 1720, a Dutch tulip trader named Hendrik van der Zee did something radical: He bought bonds.

Not because he loved bureaucracy or enjoyed watching paint dry. Because he’d just survived the first modern financial collapse by shorting tulip bulbs and realized something unsettling: Wealth isn’t destroyed in crashes. It simply changes hands.

Hendrik’s secret? He’d noticed that the rich didn’t flee to gold or land during panics. They fled to time.

Specifically, bonds are contracts that turn minutes into money.

Here’s how he explained it to his drinking buddies:

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The Parable of the Broken Pendulum

Imagine two clockmakers in 18th-century Geneva.

Pierre, the first, builds ornate timepieces for kings. Gold filigree, diamond-studded gears. His workshop overlooks Lake Léman, and his clients include Voltaire’s mistress and a disgraced bishop who pays in barrels of wine.

Jacques, the second, repairs pendulum clocks for fishermen. His tools are rusted, his clients reek of herring, and his greatest ambition is to die without owing the tavern keeper more than three francs.

When plague strikes Geneva, Pierre’s patrons vanish. His clocks, too delicate to transport, gather dust. Jacques, meanwhile, works dawn to dusk. Fishermen need their clocks to sail at high tide. The plague doesn’t stop the moon.

Pierre starves. Jacques buys Pierre’s workshop at auction for a cask of salt cod.

Moral: Complexity fails. Necessity endures.

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Bonds Are the Pendulums of Finance

The market’s a manic pendulum. Stocks swing between greed and fear. Bonds? They’re the weights that keep the damn thing from flying off the wall and braining everyone in the room.

But here’s what no one tells you: Bonds aren’t “safe.” They’re leverage.

In 1987, while CNBC screamed about Black Monday, the Chicago Mercantile Exchange did something peculiar: They traded more bond futures in one hour than in the prior decade. Why? Because the smart money wasn’t buying stocks cheap—it was renting time until the dumb money capitulated.

The playbook hasn’t changed. When stocks crash:

1. Retail investors pray.

2. Hedge funds sell your panic to algorithms.

3. Sovereign wealth funds buy bonds to control the clock.

You know what’s scarier than losing 30% in a week? Watching someone else turn your 30% loss into their 5% annual yield.

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The Arithmetic of Arrogance

Warren Buffett once joked that gold “gets dug out of the ground, then we melt it down and bury it again.” Bonds are the opposite: They’re loaned into existence, then repaid with interest extracted from the future.

But here’s the rub: The bigger your pile, the more you resemble Pierre—the clockmaker who thought art mattered more than tide charts.

A Vanderbilt heir once asked me why he should “waste” 10% of his portfolio on bonds. I showed him a 1929 ledger from his family’s trust.

On October 28th, the day before Black Tuesday, the Vanderbilts liquidated equities to buy utility bonds. By November, those bonds financed their acquisition of Midwest power grids—assets that paid dividends through the Depression.

“Genius!” he said.

“No,” I replied. “Your great-grandfather just knew that when the pendulum swings, you don’t catch it. You steal the weights.”

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How to Disappear a Fortune

The ultra-rich don’t “invest” in bonds. They use them to erase themselves from the market’s narrative.

Example: A tech founder you’ve never heard of once parked 70% of his exit cash in municipal bonds. Not for the tax break. To disappear.

While rivals chased SPACs and crypto, he quietly funded a lab studying fusion energy. The bonds? Collateral to borrow against without spooking the SEC. Ten years later, he owns patents that make lithium-ion batteries look like steam engines.

His secret wasn’t vision. It was duration—the bond term for “how long you can ignore idiots.”

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Epilogue: Why Your Wealth Manager Hates This Essay

Because bonds are boring.

Boring doesn’t justify 1% fees. Boring doesn’t sell ESG ETFs. Boring doesn’t trend on X.

But boring does turn crises into coupons. And coupons, my friends, are how the silent class clips tickets while the world burns.

So go ahead—chase the next Bitcoin. I’ll be in the corner, calculating how many milliseconds of global debt I can buy with your FOMO.

Tick. Tock.

—Jack

PS Hendrik van der Zee’s descendants now run a hedge fund specializing in tidal energy futures. The fishermen? They still hate herring.

PS2 Wait till I tell you how hedge funds operate.