Krugman has this to say about it:
For those not familiar with how financial markets work, US Treasuries are the ultimate safe asset, used as collateral for everything. Even a hint that some Treasuries might not be honored could bring everything to a screeching halt
Musk and Trump are both in the habit of stiffing people they owe money. If markets even suspect that this habit will extend to Treasuries, God help us
Why would he even say this? Usually there’s a pretty clear motivation to his lies but this one just seems suicidal
It’s yet another barganing chip he is trying to create. Somebody with these things doesn’t do what he wants, he just declares the ones they have are fake. Person, country… as others have pointed out, this will tank the value of them as well, and probably trigger inflation. Both of which in a way reduce the federal debt so he can claim he did that. It just also causes a lot of much bigger issues.
“I have reduced the US’s debt by X” claims are one potential option. It could also be any other number of things.