Just imagine – a cache of clever fakes is discovered, notionally valued at $134 billion. Blogs from your mom's bedroom to Bloomberg immediately light up, claiming that the entire asset-class is now prone to suspicion in every trade, every portfolio, making a price-drop nailed on.
The result? In June 2009, when four Japanese "businessmen" were caught in Italy with a suitcase full of fake US bonds, the price of T-bonds first dipped (gasp!), then rose (oh...), pushing yields down below where the fun had started on the 16th.
Nothing to see, in short. So how about the $6 trillion found in February 2012, again by Italian police, and again in fake US government bonds? Now that's a real stab at shaking a market, fully 42% of the official total outstanding, itself swollen to $14 trillion thanks to the real thing of Uncle Sam's promises.
No giggling about how anyone could tell the difference! Surely with forgeries so easy and plentiful, plunging Treasury bonds would plunge the world into crisis. Because no market can bear such a question mark hanging over it, right?
But no – not unless you think Presidents' Day was rushed out to close bond markets the next morning. (All-too convenient. And directly linked to the White House, too...) Because once again, Treasury debt prices blinked no more, nor less than usual. And all at prices so much higher from 2009, the 10-year yielded less than 2.0% both before and after.
So let's try again, shall we?
"You don’t need to be a conspiracy theorist to find this worrying," declared Reuters' finance blogger Felix Salmon last weekend, linking to two conspiracy theories in five words. "A 1kg gold bar, certified as 99.98% pure by XRF (X-ray fluorescence) tests, turns out to have been drilled out and largely replaced with tungsten..."