Posted on 06/16/2009 10:51:12 AM PDT by HDCochran
So far as I can tell the only Bloomberg among all US MSM have published any news reports on the $135 billion of US bearer bonds being smuggled by two Japanese businessmen from Italy into Switzerland. This story has raised many interesting and important questions, to which there have been no answers yet. But there is another interesting and important question I haven't seen discussed. Why, when major European and Japanese media have reported it, have none of the US MSM done so? I can think of only two reasons: 1) the story is now known to be only an 'urban legend' or 2) the US government has requested, as a matter of national security, that the story be withheld. Has anyone found any refutation of the original story? If not, this is a really big story.
It has been pointed out that no one would cash a bond for $500 million without confirming it was not counterfeit; so counterfeit bonds are just a red herring. Only a sovereign government could/would trade in $135 billion worth. So, who in the US government since 1982 issued them? To whom? For what? It was, at best legal but covert; at worst, illegal. See? Really big.
Glenn beck covered it yesterday [monday 6/14]. he also had a comment from treasury. ... treasury said they wouldn’t comment on an ongoing investigation....
The market tickers had some good articles on it and there were threads devoted to it on here :)
Logically then, the bonds are real. Only states have such instruments, and if Japanese were carrying them, then I deduce they are Japanese holdings. (Why would a nation trust third nation personnel to transport them? They would give them to top treasury/intelligence agency couriers to transport.)
I deduce from all this that Japan is getting rid of dollars. The story disappearing tells me that our own govt. has prevailed upon foreign govts. to spike the story, in order not to start a stampede out of dollars that could crash the global economy.
Just my dos centavos worth.
I think they are real.
Trying to do something with fake bonds in Switzerland is about the same as walking into the Louvre with a crayon drawing by a three year old and trying to convince them it was a Rembrandt.
The only nations with that much US debt are Japan and China.
Good links already posted by Daisyjane69, esp. market-ticker by Denninger:
Nope, but the financial blogs have been all over it for days.
http://market-ticker.denninger.net/archives/1114-Smuggling-Or-Counterfeit-Printing.html
http://market-ticker.denninger.net/archives/1119-The-Saga-Of-The-Bearer-Bonds.html
http://zerohedge.blogspot.com/2009/06/open-letter-to-secretary-of-department.html
http://www.jrdeputyaccountant.com/2009/06/more-on-bearer-bonds-illicit-issue-from.html
http://www.jrdeputyaccountant.com/search?updated-max=2009-06-14T11%3A46%3A00-07%3A00&max-results=10
3 posted on 06/16/2009 1:34:47 AM PDT by Daisyjane69
I was wondering if they were too and someone pointed out that was enough money to buy all the gold the IMF had for sale but then someone else said nonsense so???
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The Saga Of The Bearer Bonds
It just gets more and more odd after my original report, with the latest coming from a German newspaper (translation courtesy of Google):
Hit for the Zöllner: The contraband securities valued at 134 billion U.S. dollars are apparently real. Die italienische Finanzpolizei hatte zwei Japaner ertappt, die im doppelten Boden eines Koffers milliardenschwere Anleihen in die Schweiz schaffen wollten. The Italian financial police had two Japanese caught in the false bottom suitcase billion-dollar bonds in Switzerland wanted to create. Von dem Fund profitiert das hochverschuldete Italien.
Note that this has received very little coverage in the so-called “mainstream US media” - but it is everywhere in Europe and Asia.
Japan, for its part, oddly said the following as soon as this story started to hit the press:
“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”
Uh huh. And the Japanese said in December of 1941 that all was well too. Anyone remember what happened on the morning of the 7th?
Let’s apply a little “Occam’s Razor” to this entire story.
You’re not going to walk into a bank with $130 billion in bearer bonds and cash them. Nor are you going to sell a bond with a $500 million face value to someone without them authenticating it. They will be authenticated before you get one dime out of them - no matter who you think you’re going to “give” them to.
So if they’re fakes and you’re “just screwing around”, there is no reason to hide them. Nor is there any particular reason to have authentic and recent original bank documents in your luggage with them, as has been reported.
Next, unless someone knew you were smuggling them, why would you be subject to that sort of search? What made the people involved “interesting” to the authorities? This doesn’t sound like a random stop to me; how many people are carrying $130 billion in bearer bonds at any given point in time? No, someone was tipped off that this was happening. Now why would you bother to stop them here, prior to their attempted delivery of such instruments, if they were fake?
Think about this: You know someone is smuggling a load of drugs. You can either bust them immediately or you can tail them and bust them when they show up at the “meet” to exchange the dope for the money. If you do the former the guys with the money get away, having committed no crime. But if you do the latter, you get to bust both the courier and the purchaser - two times the effectiveness for the price of one, and double the seizure value, since you get to seize the cash too!
So let’s assume that the certificates are real, as German media seems to believe and which, by the way, makes logical sense given what they were and the sheer impossibility of cashing a fake $500 million bond.
Ok, who has $130 billion in bearer bonds? Remember, bearer instruments haven’t been issued by the Treasury since 1982, when they became illegal to issue, at least to US institutions and residents (there was an exception carved out for Treasury instruments issued to non-US residents in 1985 - a time of high deficits) The answer to that question: it is rather unlikely that there remains $130 billion of legitimate US Bearer issuance outstanding anywhere - to anyone.
Mr. Holmes would be initially puzzled by such a caper. On the one hand we have the impossibility of the bonds being real, because there simply isn’t $130 billion of issues remaining outstanding. On the other hand we have the impossibility of negotiating a fake $500 million bearer instrument, making the exercise of counterfeiting one expensive and futile.
This leaves us with more questions than answers at this point.
Or does it?
As Mr. Holmes is famously rumored to have said, “once you eliminate the impossible, whatever remains, however implausible, must be the truth.”
So what remains? Let’s run a theory here - one of the few possible remaining options, given the exclusion of what we know not to be true...
Are we willing to assume that all the “issue” of Treasury bonds has been done “above board” as required by law. If Treasury has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn’t want reported over the last, oh, say 10 or 20 years, then the following is about to occur:
Who could have possibly been complicit in such a scheme? I can come up with only two nations (and only nations could be involved due to size): The Japanese and Chinese. Since the two individuals who were arrested were reported to be Japanese nationals......
There are tremendous implications in an event like this, again, assuming the bonds are real.
The owner is going to want them back, of course. But Italy is going to keep a third as their statutory penalty for non-declaration on the border. Oops. That’s great for Italy, but it blows bananas for the actual owner.
Of course Italy (or the US!) could declare them “fake” and as a consequence simply burn them. If they are in fact real, that’s an even bigger problem. See, Bearer Bonds are issued without registration - they are as anonymous as a $100 bill in terms of who owns them. That’s one of their “features”, and why they were often used for various clandestine money operations. So if they are real and are destroyed, the owner is out of luck - their money is gone just as it is if you burn a $100 bill in an ashtray.
How much is $130 billion in this context? About 1/5th or so of what Japan legitimately owns of US Treasury debt. How would you like to take an instantaneous (and permanent!) 20% haircut on your securities? That’s what I thought.
To add some balance here, there have been stories about fake bearer bonds coming out of North Korea and other places for years. But the idiocy of attempting to pass a $500 million certificate belies this possibility - who in the name of God would take such a thing and give you anything for it without authenticating it first? While bearer instrument are “anonymous” in terms of who owns them, their authenticity is easily verified as they ARE serialized instruments.
I remain puzzled, and am not advancing the above theory as fact.
It is, however, one of the few explanations that actually fits the facts, and for that reason, I think we need some answers. If in fact previous administrations were issuing “off-book” Treasury debt in this fashion to sovereigns then implications are truly explosive as such issues are blatant and outrageous unlawful acts and would expose everyone involved to severe criminal penalties.
Let’s hope we get those answers, and this isn’t one of those “funny things” that just disappears into the night.
http://market-ticker.denninger.net/archives/1119-The-Saga-Of-The-Bearer-Bonds.html
This economy will self-destruct in five months.....
I have to wonder - what was the end-game supposed to be?
From what another freeper said-—
The bonds were fake and intended to be used as collateral on a trading account. A few accounts with different companies. 132 billion would never have been passed. But when you need to print up 5 billion you print up 132 and select the best ones
That’s my story and I’m sticking to it at least until next Friday
Curious that this kind of info doesn't move the DOW. I keep seeing this. 1 year ago a sneeze, a slight breeze would spin the DOW around like a dry leaf. Now GM and Chrysler go bankrupt, foreign gummints clearly dumping dollars and the DOW is rock steady. Curious.
I read that there were four = Russia and UK too.
Japanese hold about 935 billion in our bonds. 135 billion was only about 15% of what they hold.
Maybe they are counterfeit. From what I’ve read, North Vietnam was the origin of the counterfeit 100 dollar bills that resulted in our currency changes. Supposedly the NV had the presses and plates. All they needed was the rag paper. The solution was to “erase” one dollar bills and reprint them. All of them had different serial numbers. The fed’s equipment for screening out counterfeit bills couldn’t spot the NV fakes.
So why not counterfeit bearer bonds? No one is going to walk into a bank and cash them. They’ll be deposited. I suspect the bank wouldn’t be able to verfiy them either.
As an aside, in a recent class, the instructor had some deactivated claymore mines. When they were originally found, the squad contacted the Army. They were told that the military’s inventory was correct. They were not missing any claymores. The squad was directed to remove the plastic explosive and deface the numbers on the case. Problem solved.
If something’s a big enough embarrassment ... it won’t be. Get the point?
After all that, I’d still bet on North Korea being involved.
The Bank of England and the US Fed work together on everything, or at least they used to. I can't imagine the Brits doing this. As for the Russians, why do it this way? I'm sure they have numerous long standing secure rat lines into Switzerland. That is too much money to entrust to a couple of unescorted yahoos.
Personally, I think the bonds are fake. This presents an entire set of new problems.
Yes I get the point was thinking they would hush it up or make up a story and we would never hear about it again it hardly had a mention until people started passing it around on forums as it is then finally it was picked up. Then there was all kinds of nonsense spouted about it so yes I get the picture.
The story hit the London papers this morning:
http://www.timesonline.co.uk/tol/news/world/europe/article6507161.ece
It’s gotten peoples attention, and I don’t think it’s going away soon. Especially if the bonds are real.
If you look at demand for US bonds, you will see that it has been tapering off. As much as the Chinese and Japanese say they believe in the strength of the dollar, their actions show otherwise (call for international currency, weak demand for bonds, etc.). People can see what path we as a nation are on with the socialist in charge. But unlike Iran where the people are demanding change, we sit on our butts watching the US fail. I can’t blame them for trying to dump the bonds. And yes, I don’t see them as being fake because it would be very difficult to try to dump that huge $$ in fake bonds.
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