Update: Karl Denninger is not convinced yet, and makes some good points about unanswered questions (these may have a rational explanation, like Treasury being wayy too overworked to deal with it right now).

It was fun to speculate about the $134b in “US Fed Bonds” while it lasted. But the fun’s over. First Cannonfire.com made a convincing argument about why they think the bonds are fake. They noted that the bonds appear to read “US Fed Bond” and apparently there are some glaring holes in the validity argument:

  1. There’s no such thing as a US Fed Bond, Treasury issues debt.
  2. Most of the bonds were dated 1934, which makes the $134b seem a wee bit ridiculous
  3. The “Japanese” men arrested may be well-known Filipino con-artists (read the article for more)

Even after this and other evidence indicating fakeness appeared, the blogosphere asked, “Why hasn’t the Treasury spoken yet then?!” Well, they just spoke. See this Bloomberg piece:

“They’re clearly fakes,” said Stephen Meyerhardt, a spokesman for the U.S. Bureau of the Public Debt in Washington. “That’s beyond the fact that the face value is far beyond what’s out there.”

Today, Treasury securities are issued electronically. The U.S. started converting all of its marketable debt from paper to electronic form in the 1980s.