What do banks do with the money when people buy bonds? Is it possible that they finance the war with it?

Answer 1

They do the same thing with all of the money you give them including savings and checking accounts. They invest it and try to get a much better return on it than they give you. If they can get 15% or more off of your money while they give you 5%, they will make a pretty penny, especially if you consider how many people give them their money.

Answer 2

If you are referring to U S government bonds, the answer is yes. The banks send the money to the U S government and the government uses it to finance the war and other wasteful projects.

However, the amount of money the government gets from selling bonds through banks to individuals is just a drop in the bucket of the money they need. Where they get the real money is from selling bonds to Japan and China.

Answer 3

America, in the past, has sold "War Bonds" to finance wars. Many bonds are sold on the secondary bond market and most often finance businesses, public works, and government projects.