"By issuing bonds at high interest rates and lending them to developing countries in the third world at low interest rates, the United States is obviously using its own money to supplement those developing countries in the third world.

"Therefore, the move of the United States to buy people's hearts and minds quickly won a wave of international praise, and international public opinion successfully returned to the side of the United States, which also allowed the United States to successfully survive that serious diplomatic crisis!"

"Because the United States borrowed the 10-year treasury bonds to successfully counterattack, in the world financial circle, the 10-year treasury bonds are also called 'diplomatic bonds'!"

"The United States is really 'atmospheric', and it is estimated that only Americans can do such a thing as spending money to buy fame!" Qiao Tianyu scoffed at this.

Although Qiao Tianyu does not approve of the United States' practice of buying people's hearts, and does not think there is anything clever, Qiao Tianyu also has to admit that the United States is really rich!

You know, 2 trillion dollars in the 80s, calculated at comparable prices, if put in the mid-90s, at least four or five trillion dollars is not worth it!

As the saying goes, "money can make the devil grind", let alone those third world developing countries that are in a period of social transition and are waiting to be fed?

However, putting aside the Americans' practice of buying people's hearts with money, Qiao Tianyu has never gotten Wu Minghao's point?

Doesn't it mean that we should discuss a plan to deal with the United States and Britain by "striking first," and what does this have to do with the "diplomatic bonds" of the United States?

"Of course it does, and it's a huge relationship!" Wu Minghao then explained.

"As we all know, the debt crisis that swept the world in the eighties, coupled with the impact of a series of events such as the bursting of the economic bubble in Japan, the drastic changes in Eastern Europe, and the collapse of the Soviet Union, has caused severe inflation to break out around the world in the past decade. ”

"Even in the United States, Russia, China and other large countries, the inflation rate of all countries in the world continues to remain high, and inflation has brought great disasters to the world's financial circle while frantically devouring the property of people in various countries. ”

"Especially for the uniquely designed 'one-time repayment of principal and interest' treasury bonds like 'diplomatic bonds', it is a fatal blow!"

"Please wait a minute!" Hearing this, Qiao Tianyu suddenly stopped Wu Minghao and asked in confusion, "You said that the 'diplomatic bond' is a one-time repayment of principal and interest, how is it possible?"

"Haha, Tianyu, you are really a financial expert, and you have found the problem at a glance!" Wu Minghao laughed heartily.

Well, let's briefly popularize the knowledge of US Treasury bonds here.

Generally speaking, U.S. Treasury bonds are bond products issued by the U.S. Treasury Department and guaranteed by the U.S. national creditworthiness, which are also known as U.S. Treasury bonds.

According to the repayment period of national bonds, U.S. Treasury bonds can be divided into three types: short-term treasury bonds, medium-term treasury bonds, and long-term treasury bonds.

Under normal circumstances, those with a repayment period of less than one year are called short-term treasury bonds, those with a maturity of more than one year and less than 10 years are called medium-term treasury bonds, and those with a maturity of more than 10 years are called long-term treasury bonds.

Strictly speaking, Treasury bonds are essentially a bond, which is a certificate of bond that the United States** borrows money from investors and then issues it to investors.

Therefore, as long as it is a bond, it must face the problem of repaying the money, which is called "repayment of principal and interest" in finance.

In other words, when the repayment period of the Treasury bond is up, the United States** must repay the principal plus interest to investors.

However, for Treasury bonds of different maturities, the U.S. Treasury adopts different repayment methods.

For example, short-term government bonds with a repayment period of less than one year are generally made in a lump sum repayment of principal and interest.

Take a simple chestnut.

For example, on January 1, 1994, the U.S. Treasury issued a one-year Treasury bond with a face value of $100 each, which means that the Treasury bond has a one-year maturity on December 31, 1994.

However, when the U.S. Treasury issued the Treasury on January 1, 1994, the Treasury bond was not issued at a price of $100, but at a value lower than $100 (the price of the Treasury bond is generally determined by buyers' bidding).

For example, if the issue price is $90, then an investor can buy a Treasury bond with a face value of $100 for $90.

Then, on December 31, 1994, when the repayment of the bond expired, investors could take the Treasury and claim $100 of the face value of the Treasury from the U.S. Treasury.

The face value of the treasury bond is $100 minus the issue price of the treasury bond of 90 yuan, and the $10 obtained is the income from holding the bond.

This is how the "one-time debt service" of short-term U.S. Treasury bonds is repaid.

However, for long-term government bonds, the repayment method is completely different, and the method of "regular payment of bond interest" is generally adopted.

For example, a long-term Treasury bond with a maturity of 30 years, issued on January 1, 1994 and matured for repayment on December 31, 2023, has a face value of $100 per Treasury bond and a coupon rate of 5%.

When the U.S. Treasury issued the bonds on January 1, 1994, it sold them to investors at a face value of $100 per bond.

Subsequently, on a fixed date each year, investors can hold the Treasury and claim 5% of the $100, or $5 in earnings, from the U.S. Treasury until 2023.

Finally, after the repayment period of the Treasury expires on December 31, 2023, investors will take the Treasury and ask the U.S. Treasury for the principal amount of the Treasury bond, which is $100 of the face value of the Treasury bond.

Of course, in practice, for the sake of fairness, the coupon rate of long-term treasury bonds is generally not a fixed interest rate, but a floating interest rate that can be adjusted according to the speed of economic development and economic factors such as inflation.

So why is there such a big difference in the way short-term and long-term Treasuries are repaid?

It is because the maturity of short-term treasury bonds is relatively short, and economic factors such as the speed of economic development and inflation are predictable in the short term, and the fluctuations are not large, so it is easier to use the repayment method of "one-time repayment of principal and interest" for short-term treasury bonds.

However, because of the long maturity of long-term treasury bonds, it is difficult to accurately predict economic factors such as economic development speed and inflation rate during the field period, and the fluctuation range may be very large, so it is more fair to adopt the method of "regular issuance of bonds" and better protect the interests of investors.

Let's take the simplest example.

For example, a 10-year "diplomatic bond" is issued in a lump sum repayment of principal and interest, with an issue price of US$50 and a maturity of US$100 after 10 years, without any interest paid in between.