Zero Hedge: An Open Letter to the Secretary of the Department of the United States Treasury
Zero Hedge (an awesome finance blog which manages to avoid the usual pretentiousness through heavy sarcasm and humor) has posted a note outlining the potential scenarios regarding the recent discovery of a briefcase containing $134 Billion (yes, with a “B”) in U.S. Treasury bearer bonds.
Bearer bonds are different from normal Treasury notes in that they entitle whoever is holding them to trade them, receive coupons, etc. Since 1982, the Treasury has only issued their securities in “book entry” form, meaning the Treasury maintains a list of holders electronically. This change was made because of the immense number of outstanding notes which made maintaining records of holders and paying coupons in a timely fashion very difficult.
Since the change, bearer bonds only make up about 1% of all outstanding Treasury debt. Thus, $134B is no small number – especially to be found all together, neatly, in one briefcase (hidden in the lining of the case).
Zero Hedge theorizes the potential cases here: either the bonds are amazing forgeries or the Treasury has been lying to the public about the true outstanding amount…
Zero Hedge: An Open Letter To The Secretary Of The Department Of The United States Treasury
Tags: bearer bonds, counterfeit, Japan, Treasury Bonds, U.S. Treasury, Zero Hedge
