Buying the schatz at these levels is a Deutsche mark trade
Give your money to the German government for two years and they’ll repay the exact same amount in two years.
Yet that might be an incredible deal.
Buying German debt at these levels isn’t just about safely getting your money back — it’s a euro breakup trade. If you’re in Greece or anywhere else in the periphery, you are rightfully worried that your financial assets could be forcibly converted to a new currency.
It’s an outlying scenario but it’s a possibility. As it becomes more likely, the schatz may fall significantly into negative territory.
The question you need to ask is: if the euro does break up, how much more valuable will Deutsche marks be compared to peseta or lira?
You can look at the schatz paying zero interest, or you can see it as a free call option.