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

Andrew Keen (0:00)

Hello, my name is Andrew Keen. Welcome to Keen On America, the daily interview show about the United States.

Hello, everybody. It's Sunday, September the 27th, 2026 Yesterday, we did our weekly tech show, and we talked about an interesting conversation between Nicholas Thompson and Azim 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 going to 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?

Robin Wigglesworth (2:09)

Oh, there definitely is something like a bond bubble. I agree that stock market bubbles are actually, most of the time, reasonably inconsequential, and in fact, are maybe sometimes even welcome. We occasionally do need people to dream more than to be careful and to take leave of the censors and kind of throw money at the hot new thing because that's typically quite often when the way we see big leaps, 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.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 2003 But economically, it was not a major event whatsoever. In fact, it's one of the shortest, shallowest recessions in US history. But when the bond market breaks bad, so in the 18th century, it's 1873 onwards, in 2008 and very close in 2020, it tends to be very, very painful for the world.

Andrew Keen (3:21)

Well, that time has come, Robin, for us to define bond, 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?

Robin Wigglesworth (3:36)

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.

Andrew Keen (3:54)

Wow. 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 whether there was no such thing as a bond. Is that fair?

Robin Wigglesworth (4:09)

Yes. Well, credit is actually a lot older than most people think. That even back in ancient Mesopotamia 4,000 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. I think it's pretty anything that has value. But the bond in its proper form was invented by accident by the Venetians in 1171 because of war. Essentially, they needed to finance a big war with the Liege Constantinople, the capital of the Byzantine Empire. 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.

They essentially forced 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.