Update: The picture on the right is of the seized "bonds", via Italian site Adnkronos.

They look an awful lot like the bonds pictured in this story, about an age-old scam designed to confused seniors into buying fake bonds.

That being said, there was a period when the Treasury did issue high-denomination bonds up to $500 million.

Original post: This is a totally crazy story.

Asia Times: Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

The question now is whether the bonds are real or counterfeit

Karl Denninger, who discovered the story, notes that either way, this is wild:

If they're real, what government (the only entity that would have such a cache) is trying to unload them?

If they're fake, this is arguably the biggest counterfeiting operation ever, by a factor of many times. I've seen news about various counterfeiting operations over the years that have made me chuckle, but this one, if that's what it is, is absolutely jaw-dropping.

The cute part of this is that if the certificates are real Italy just got a hell of a bonanza - their money laundering laws provide for a statutory 40% penalty for failure to declare instruments and cash in excess of $10,000 Euros, which means they'd garner a close-to-$40 billion dollar windfall.

We're leaning towards counterfeit on this one. Either way, we wanna know more!