The Meb Faber Show · Friday, September 11, 2026
The origins of the modern bond market can be traced back to Venice in 1171, where a forced war loan on citizens evolved into a tradable instrument. This innovation by the Doge of Venice allowed the city-state to finance a war fleet and fundamentally changed how governments could raise capital.
“Well, so it was in Venice in the 12th century, you know, almost a millennium ago now. 1171 is the OG bond market. It's the Rialto Square. It was the first place that bonds were traded.”
“So what they did, the Doge of Venice decided, well, we're going to impose a war tax, a proportional war tax on everybody in the country, or in the city really. So the wealth of people pay more than the poor people. But, you know, we're going to treat it like a loan. We're going to give you 5% a year on your money back then and we'll pay you back then. We'll pay you 5% in the meantime.”
“So basically it was a tradable, forced loan to the government. The government took this money, built a massive war fleet, sailed against Constantinople, and then suffered from the plague.”