I bought these 30-year bonds for $1,000 each only 3 years ago. These bonds pay 6% interest every year. Right now, everyone is scared about the economy, and I can sell each bond for $1,432. If people were going to buy a bond today, the best rate they could get is 3.5%. Because that’s the best rate, and I’m sitting on a 6% bond, I can charge $1,432 for each.”
