Well, shit…..

William Pesek of Bloomberg tells us that:

Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.
The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale.

(The original news report may be read here. Additional coverage by the same source can be read here.)

Indeed. On the other hand, they may be forgeries. And who, after all, would want hundreds of billions of dollars of worthless bonds?

The trillions of dollars of debt the U.S. will issue in the next couple of years needs buyers. Attracting them will require making sure that existing ones aren't losing faith in the U.S.'s ability to control the dollar.

The dollar is, for better or worse, the core of our world economy and it's best to keep it stable. News that's more fitting for international spy novels than the financial pages won't help that effort. It is incumbent upon the U.S. Treasury to get to the bottom of this tale and keep markets informed.

Assuming the bonds are legitimate, the next question hones in on who could or would have this kind of largess to dump? The list is short:

Other than the U.S., China or Japan, no other nation could theoretically move those amounts. In the absence of clear explanations coming from the Treasury, conspiracy theories are filling the void.

Given the lack of hard and sure answers, I suppose the conjectures flooding the void where the truth ought to reside could be considered as nothing better than conspiracy theories. Yet are they "conspiracy theories" as that term is normally understood when they refer to actual conspiracies in action?

Update (6.19.2009):

Yesterday, the US Treasury declared the bonds fakes (see this, this and this).

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