Thursday, January 16, 2014

The Day I was Offered a Trillion Dollars for a Bond

First, let me clarify a couple things relating to the title. I was actually offered $20 trillion, not one trillion dollars, and this was United States dollars, not Zimbabwe dollars or any other currency.

A few years ago, a woman called me up and said that she was referred to me by a friend because I collect, buy, and sell antique stocks and bonds. (Full disclosure: my business is She told me that she called because she was interested in some old bonds.

The first question she asked was "Do you have any pink ladies?"

I thought to myself, "WTF?" but I said, "Pardon?"

She then said, "You know. Bonds issued by the Mexican government in 1894. The Series A bonds yielding 5% for 100 pesos."

I told her "No, sorry I didn't have that particular bond; but I would be on the lookout for one."

She then asked, "Do you have any White Doves or Orange Doves?"

I thought that maybe I should tell her I have a dog, but then I thought better of it and said, "No, sorry."

She then went on to ask me if I had any Purple Ladies, Founders, Grandmasters, 1899 Sterling Doves, or Double Doves, and I responded no, no, no, no and no. (I didn't let on that I didn't know what the heck she was talking about.)

Then she got to the juicy part. She said, "What I am really looking for is a 1904 Blue Dove. My buyer can pay 20T/5T for the bond, with 5T for commissions."

This piqued my interest. 20T or $20 thousand for a bond sounded great. I have a few historical stocks and bonds that sell for a few thousand, but if I could sell a bond for $20,000, even if I had to pay her a $5,000 commission, netting me $15,000, that sounded great. I started thinking about my collector friends who might have one of the bonds for sale.

I said, "Can you describe these bonds in more detail?"

She said, "These are the $1,000 Series A 1904 Estados Unidos Mexicanos bono del la Deuda del 4% Oro. In other words, the United States of Mexico Gold bond of 1904."

I said that I would look into my inventory, and see if I have one of these.

Then it started getting strange. She started babbling a bunch of acronym, such as LOI, PPP, POL, POP, and TTM. (I later found out that TTM means Table Top Meeting, whatever that means. She then said, "The transaction would clear through either Euroclear, Cetip, Clelick, or Tela Ram. You would also need to provide a certificate of authentication, a letter from your attorney and a letter from your accountant. We also need a photocopy of your drivers license and your passport. Once we have all that, we can schedule a TTM."

I thought to myself, "Yeah, right," but I said, "What do you need all that for?"

"In order to pay you your twenty trillion, the buyer needs to have to have all that," she replied.

So I thought, "What?!!! Either that's a major slip of the tongue or she's crazy." But I said, "What? You mean twenty thousand don't you?"

And she said, "No. The buyer will pay $20 trillion to you and an additional $5 trillion to cover all commissions."

So I said (forget what I thought - you can easily guess), "Who's the buyer? There are no trillionaires out there."

"The Mexican Government," was her response.

Then I said, "Wait. The entire GDP of Mexico isn't even a trillion dollars." (Note: At that time, it wasn't even a trillion. It is now well over a trillion. Not that this makes any difference.)

Her only response was, "They have the money and they are willing to pay it."

At that point, I just wanted to get off the phone. I said, "Look, I only sell authentic documents. If I find this bond, I'll sell it to you for $20,000, and I won't provide any other stuff."

"But then you would miss out on your $20 trillion."

I said, "That's fine. You can have the $19 trillion and change for yourself."

I never did come up with the bond, and I never heard from her again.

What this led to was one of the wildest speculation bubbles in antique bonds, with prices of some of these collectible Mexico bonds which would normally sell for a few hundred dollars, or maybe a few thousand for the rare ones, ended up selling for several hundreds of thousands.

I've seen these bubble in the past with old German government bonds, old Chinese government and railroad bonds, and even old U.S. railroad bonds. One of these days, I will write about the guy who wanted me to meet him in a shopping center parking lot at 10pm at night to pay me several thousand dollars in cash for an antique railroad bond, but that story is for another time.

The moral of this story is if anyone offers to pay you a trillion dollars for anything, be suspicious.

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