I’m proceeding on the assumption that you are familiar with the $134 billion of U.S. government bonds that the Italians seized this week in an alleged smuggling plot. If not, the links in the article I’m linking to will give you the requisite background.
Anyway, Karl Denninger does a super job thinking through all of the angles. In the process he comes up with some interesting thoughts. For example:
So let’s assume that the certificates are real, as German media seems to believe and which, by the way, makes logical sense given what they were and the sheer impossibility of cashing a fake $500 million bond.
Ok, who has $130 billion in bearer bonds? Remember, bearer instruments haven’t been issued by the Treasury since 1982, when they became illegal to issue, at least to US institutions and residents (there was an exception carved out for Treasury instruments issued to non-US residents in 1985 – a time of high deficits) The answer to that question: it is rather unlikely that there remains $130 billion of legitimate US Bearer issuance outstanding anywhere – to anyone.
Mr. Holmes would be initially puzzled by such a caper. On the one hand we have the impossibility of the bonds being real, because there simply isn’t $130 billion of issues remaining outstanding. On the other hand we have the impossibility of negotiating a fake $500 million bearer instrument, making the exercise of counterfeiting one expensive and futile.
This leaves us with more questions than answers at this point.
He has an answer of sorts for the question, so take a look at his whole post. There may be more to this than meets the eye. At least it makes for great conspiracy theories.