[Toddsterpatriot]

In the meantime, he's getting a 35% "discount" on his European taxes, too -- since the 4% he's earning is being reported on his tax return in Euros, not dollars (even if he never exchanges these dollars into Euros this year).

The $400 annual payment is worth 260 Euros. This is an incentive to buy the "discounted" bond? LOL!

It gets really complex,

A 4% coupon is a 4% coupon. Not that complex.

[Alberta's Child]

The $400 annual payment is worth 260 Euros. This is an incentive to buy the "discounted" bond? LOL!

It's REPORTED as income of 260 Euros. If it never gets converted from dollars to Euros, it's still $400 to the bond holder (at least for now).

Remember -- a European investor today is not making decisions based on the assumption that the U.S. dollar is (or ever will be) completely worthless . . . he's betting that the U.S. dollar is going to go up, down, up, down, etc. over different intervals in the future. And he's making investment decisions accordingly.