As such, the bonds are currently worth 10,000/1.) Suppose the U. Simple Supply and Demand would tell us that an excess supply would cause the price to drop, right? However, where would present value fit into this? Would the excess supply of bonds prices to drop below their calculated current "Present Value" and thus cause them to sell at Discount? Also, how would an excess supply of bonds change the interest rate in the economy? I am assuming the U.04^30 or 3083. Gov't issues US Bonds with a Face Value of 10,000.S. 1.S.. gov't doesn't step in to change the money supply or buy back the bonds at a cheaper price. Ok, so I was wondering the following about Bonds. 2.S.S.) Now, suppose China comes out tomorrow and decides to sell all of the U.187 dollars, right? (I am, for simplicity, assuming that there are no coupon payments on the bonds). The interest rate in the economy is currently 4% and the bonds are redeemable