You’re not wrong, but government bonds actually have a somewhat different role in the modern financial system. Specifically, they are used as collateral in the

You’re not wrong, but government bonds actually have a somewhat different role in the modern financial system. Specifically, they are used as collateral in the interbank lending market, which means they have exchange value above and beyond the discounted cash flow of the bond itself. Which is basically how negative yielding bonds could even exist.