Imagine you are a cashier and you have a drawer with ten $100 bills.

A customer comes in and says, "Here's $100 can I exchange that for your $100"   

You look at his bill, it looks the same as your bill.  So you give him $100 and put his bill on the bottom of your pile of $100.

This happens all day until all of your original $100 bills are gone, and have been replaced with the identical $100 bills.


You leave work with the handful of $100 bills, and you go to the bank.  You try to deposit the bills, but the bank says, "Sorry, these aren't real."


That's what Mt Gox has, basically...  A stack of worthless bitcoins that were already spent.