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There are two different kinds of bonds, you described the couponless bonds, but most bonds pay a coupon. We are responsible for paying interest on those bonds bi-yearly. It's an important part of the trade dynamic because the bonds can be traded for USD and produce USD for the older. If there is no international trade there's no reason for them to hold our bonds.
So just to help your example most people are looking for the cashflow. They give the US $1,000 and they want the $40 a year. They can then use the 40$ a year to exchange for goods and services without having to shuffle around much money. Since banks, countries and industrys are tied to this income the threat of default is truly a global wrecking ball.
Ah, ok, I appreciate the correction!
Doing my best trying to remember my course work from almost two decades ago, looks like I missed an important detail.
... and that detail makes the situation... even worse, wonderful.
You we're pretty much right on the money. I think the Zero Coupon bonds are more of a hedgefund favorites. Your average investor is going to be holding the couponed version in their 401k.
Oh goodie, thats wonderful news for the 401k havers, rofl.
Yeah, that’s why I called my senator because this isn’t really the same as Nancy Pelosi making her self rich on Google calls. This is robbing every single investor in the world. Stealing straight out of grandma’s retirement account.