Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: CusterInvestor who wrote (156824)	9/12/2011 8:35:36 AM
From: ChanceIs	Read Replies (1) \| Respond to of 206140

RE: Over 100% All I could figure was that they were "Original Discount Bonds" as are all sub one year duration Government instruments in the US. Longer US debt is often referred to as "coupon" debt. OID pays no interest, vice coupon (interest payment - usually semi-annual) on the longer bonds. The OID originates sub par. For example, the government accepts $0.95 on the buck when sold originally - a yield of 5%. If you can buy such a bond in the open market for say $45, then when the government pays it off at $1.00 a year later (in the case of Greece it might be something like $0.20) you get a yield exceeding 100%. Since Bernanke can print money, US short term debt will always pay $1.00, albeit $1.00 with the buying power of say $0.50. Once upon a time you could redeem that bond for gold.