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Comment by fleitz | Hacker News Reader

As a side note a 2 year Greek T-bill pays 26%, at that rate Greece would be better off phoning up Capital One for a VISA.

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Inflation in Greece is currently sitting at 4.5%, so the T-bills are essentially offering a real 8.5%/year ROI. How on Earth is that affordable to them? I get that they need money now, but they can't expect to be in a better position to repay in 2 years.

Also, what happens if (when) Greece defaults? Do the T-bills become worthless, or are they considered a different kind of debt than other national debts?

How on Earth is that affordable to them? I get that they need money now, but they can't expect to be in a better position to repay in 2 years.

They aren't actually paying that. Since the EU/ECB/IMF gave them all that money they have a nest egg and don't have to go to the market and sell more bonds.

AFAIK the 26% is from secondary sales, people who bought a bond before and now, in order to sell it on, have to offer a high rate.

However if the EU/ECB/IMF money runs dry, and they need to go back to the bond market, then this is the rate they would pay. As you said, that's impossible. So if the EU/ECB/IMF money runs dry, they'll default.

Does anybody know how an individual investor could actually buy one of these?

well, us mere mortals will have to stick to international treasury ETFs like BWX or fear plays like good old GLD/VIX.

even if you could directly invest in greek bonds, you probably would not want to do this...

Keep in mind that there is no chance in hell that a 2 year bond will actually pay that, they'll default before then, but if you really want to, get one from a primary dealer.

http://www.pdma.gr/(S(fcxze5rfyjyze2555hw43555))/ODDHX/Stati...

Treasury bonds are actually really easy for a retail investor to buy.

They called Capital One in 2008 but they're still on hold. It's a race to get through to Card Sales before the phones get disconnected.

Although, since at the moment greece borrows from emergency sources, one can't be sure how representative the price is (up or down)

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