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Bonds Worth $134.5 Billion Are Seized In Italy

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I'm fascinated by this tale, but I keep thinking of that £11m 'ruby' (Star of Wigan?) some potless Northern builder got us all intrigued by a month ago...

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Guest Skinty

A big question that no one seems to be asking (or maybe I am missing something here).

If the two Japanese men had continued on their merry way. what would they have done with all those bonds?

Why were such a large amount of bonds being smuggled in one go to one country?

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A big question that no one seems to be asking (or maybe I am missing something here).

If the two Japanese men had continued on their merry way. what would they have done with all those bonds?

Why were such a large amount of bonds being smuggled in one go to one country?

Max Keiser reckoned in his latest podcast that the bonds might have been going to a large international banking organisation HQed in Switzerland to help shore up their balance sheet for an audit.

His take is that bonds could be clandestinely transported around the world and presented to auditors to 'prove' that any given bank had enough Tier 2 capital, should the need arise. Apparently there is no cross checking done that the various banks aren't all presenting the same assets to auditors.

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A big question that no one seems to be asking (or maybe I am missing something here).

If the two Japanese men had continued on their merry way. what would they have done with all those bonds?

Why were such a large amount of bonds being smuggled in one go to one country?

Do a swap for all those fillings the Swiss having been living off for 54 years

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Max Keiser reckoned in his latest podcast that the bonds might have been going to a large international banking organisation HQed in Switzerland to help shore up their balance sheet for an audit.

His take is that bonds could be clandestinely transported around the world and presented to auditors to 'prove' that any given bank had enough Tier 2 capital, should the need arise. Apparently there is no cross checking done that the various banks aren't all presenting the same assets to auditors.

From http://classics.mit.edu/Thucydides/pelopwar.6.sixth.html

Meanwhile the three ships that had been sent on came from Egesta to the Athenians at Rhegium, with the news that so far from there being the sums promised, all that could be produced was thirty talents. The generals were not a little disheartened at being thus disappointed at the outset, and by the refusal to join in the expedition of the Rhegians, the people they had first tried to gain and had had had most reason to count upon, from their relationship to the Leontines and constant friendship for Athens. If Nicias was prepared for the news from Egesta, his two colleagues were taken completely by surprise.

The Egestaeans had had recourse to the following stratagem, when the first envoys from Athens came to inspect their resources.

They took the envoys in question to the temple of Aphrodite at Eryx and showed them the treasures deposited there: bowls, wine-ladles, censers, and a large number of other pieces of plate, which from being in silver gave an impression of wealth quite out of proportion to their really small value. They also privately entertained the ships' crews, and collected all the cups of gold and silver that they could find in Egesta itself or could borrow in the neighbouring Phoenician and Hellenic towns, and each brought them to the banquets as their own; and as all used pretty nearly the same, and everywhere a great quantity of plate was shown, the effect was most dazzling upon the Athenian sailors, and made them talk loudly of the riches they had seen when they got back to Athens. The dupes in question- who had in their turn persuaded the rest- when the news got abroad that there was not the money supposed at Egesta, were much blamed by the soldiers.

They retired to their private jets and printed some more bonds would be the modern version.

Edited by Tom Peters

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Guest sillybear2
Max Keiser reckoned in his latest podcast that the bonds might have been going to a large international banking organisation HQed in Switzerland to help shore up their balance sheet for an audit.

I like it, makes sense, back in the old Wild West whenever the bank inspector came around to call to check their capital adequacy they used to fill buckets up with sand and sprinkle a few nickels on top, or they used to cart the same reserves around ahead of time so they were always in the right bank for when the inspector called.

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Guest มร หล&#3
I like it, makes sense, back in the old Wild West whenever the bank inspector came around to call to check their capital adequacy they used to fill buckets up with sand and sprinkle a few nickels on top, or they used to cart the same reserves around ahead of time so they were always in the right bank for when the inspector called.

It's all been bu!!sh!t from day one, hasn't it?

Don't know why anyone's worrying.

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The US mainstream media won't touch this one. You have to ask why?

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It's all been bu!!sh!t from day one, hasn't it?

Don't know why anyone's worrying.

It is almost certainly a case of counterfeiting.

I guess that the two Japanese businessmen were probably duped, perhaps by the "Mafia", into buying these bonds for real money. They thought that they would make a huge profit if they could transport them to Switzerland, which of course the people who sold them couldnt do, as they would be "arrested" by the authorities.

The victims, being from Japan, that has a currency with about 100 Yen to the dollar, would probably have been confused a bit by the amount of bonds they were being offered. Most westerners, would probably have realised that the stated values were far too big to be believable. But there are always some suckers out there.

Or at least that is my theory.

It is the only explanation that makes any sense to me. All this other stuff about the bonds being real, and transported through that haven of safety known as Italy, is just all a load of baloney.

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Guest sillybear2
It's all been bu!!sh!t from day one, hasn't it?

Exactly, but banks used to issue their own notes back then, and there was no Federal Reserve or depository insurance so when there was a run it payed to panic first, the Fed didn't come around to wipe their ar$es. At least such caution lead to a degree of due diligence on the part of customers, people used to avoid banks offering high rates of interest, that indicated their desperation for funds.

So much has changed since then of course :rolleyes:

Edited by sillybear2

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Max Keiser reckoned in his latest podcast that the bonds might have been going to a large international banking organisation HQed in Switzerland to help shore up their balance sheet for an audit.

His take is that bonds could be clandestinely transported around the world and presented to auditors to 'prove' that any given bank had enough Tier 2 capital, should the need arise. Apparently there is no cross checking done that the various banks aren't all presenting the same assets to auditors.

Except that Tier 2 Capital is about the LIABILITIES of a bank, not the ASSETS.

So apart from that minor detail this is plausible.

:lol::lol::lol:

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Except that Tier 2 Capital is about the LIABILITIES of a bank, not the ASSETS.

So apart from that minor detail this is plausible.

:lol::lol::lol:

Well, I'm no expert but from investopedia:

Tier 2 capital

A term used to describe the capital adequacy of a bank. Tier II capital is secondary bank capital that includes items such as undisclosed reserves, general loss reserves, subordinated term debt, and more.

Plus the Tier 2 was from memory. Basically he reckoned that the bonds were to be used to present to auditors for banks that were a little lacking in actual reserves.

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Is this a major story or what? What's going on?

Could this spark the dollar's collapse?

The mainstream media are keeping remarkably quiet for something that is quite extraordinary whichever way you want to cut it.

If real, this means a sovereign nation is trying to dump massive quantities of bonds.

If fake, it means that forgers have the capacity to fake immense sums of money - I can't imagine anyone cashing these in ($135.5bn) without extensive checks first.

So is Keiser on the right track when he opines they are to be used to con auditors?

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Latest development in this story.

This must be one of the biggest $ smuggling cases in history. Karl Denninger has stated (on ticker-forum yesterday) that the mystery rests on what happens with the suspects:

Ok, if they're fakes why aren't the couriers in custody for counterfeiting - a serious offense virtually everywhere? Hmmm...

The latest on the suspects:

The Japanese Bond Smugglers Are Missing

Joe Weisenthal|Jun. 17, 2009, 4:45 PM

PrintTags: U.S. Government, Japan, Scandals, Debt

At least the Japanese press is sitll interested in story of the two Japanese men caught with ome $134.5 billion in (presumably fake) US bearer bonds.

We can't read Japanese, and Google Translate isn't particularly helpful, but a reader informs us that the gist of this story is that a newspaper sent a reporter to Como, Italy and found that the men had been released, with their whereabouts unknown.

Now, the easiest, most-benign explanation for this whole thing is that it's just a counterfeiting scheme. Fine, but then why do you let them go without tracking their whereabouts.

http://www.businessinsider.com/the-japanes...-missing-2009-6

If this is true, the whole thing is really starting to stink. If the bonds are fake, why have the suspects vanished? Why is the whole story absent from the US news?

Denninger posted this on ticker forum a few days ago:

The WORST possible explanation is that these bonds are REAL and were issued as a means of deficit spending beyond legal authority.

Why? Because then the entire premise of how much debt we are in, and the soundness of the Treausry complex is instantaneously called into question.

Such a revelation would likely lead to an immediate loss of the nation's "AAA" credit rating and MIGHT lead to an immediate shutdown of foreign Treasury buying.

What I do know is that the two obvious explanations - they're raw forgeries, and they're remnants from previous issues - are both highly unlikely to be true.

The former because you could never turn them into money (in which case you wasted your time and trouble on making them for nothing) and the latter because there aren't that many outstanding - by nearly a factor of 100.

Therefore, one must search for other possible answers, no matter how insane they sound at first blush.

It sounds like the US will have no choice but to say these are fake, no matter what the truth is.

:ph34r:

Edited by MOP

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I am not normally I person who believes in conspiracies, although they do happen!... however what were to happen if lots of fake notes and bonds were to be found all at once?

Surely the countriy involved would be able to say " right we don't know how much real money is about so we are bringing out a new currency and all those old dollars are now worthless!"

Overnight the US defaults and blames forgers!...or is this too far?

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Overnight the US defaults and blames forgers!...or is this too far?

Surely a small % of total money involved is enough to buy off anybody, it you can save huge amounts

by helping somebody to make the right call or help them in other ways to see your viewpoint then

it doesn't matter what really happened. Even if it did happen, if that makes sense.

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The bonds are real, this means either :

  • A G8 Government is in it up to their eyeballs and doesnt want the rest of the world to know.
  • They are past issued bonds which have never been redeemed, if so why have two Japanese Men, trying to smuggle them.

or

The Bonds are fake, which begs the question :

  • How did the counterfeiters know what the genuine bonds looked like ?
  • The bonds would be checked before any funds were released as would lead to an arrest
  • It was toy money and the Japanese Men, were just clowning around for fun
  • It was a test of Italys border controls with Switzeland, an Operation in Effectiveness

I think the reason we have not heard much in the media, is there is nothing to report yet. This isnt just a few quid, we can print in the Telegraph. If genuine and Italy seize the bonds, then the Dollar is going to tank.

Great Crash 3

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Denninger posted this on ticker forum a few days ago:

"The former because you could never turn them into money (in which case you wasted your time and trouble on making them for nothing)"

<Puts on supervillain hat>

... unless you've also intercepted/subverted the verification channels :ph34r:

How is it done I wonder? Fax? Phone call?

Edit: some Hollywood scriptwriter is surely dreaming up a treatment right now :lol:

Edited by huw

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UPDATE via Bloomberg:

U.S. Says Bonds Seized in Italy Are ‘Clearly Fakes’ (Correct)

Share | Email | Print | A A A

By Vincent Del Giudice

(Corrects amount outstanding in fourth paragraph.)

June 18 (Bloomberg) -- U.S. government bonds found in the false bottom of a suitcase carried by two Japanese travelers attempting to cross into Switzerland are fake, a Treasury spokesman said.

“They’re clearly fakes,†Stephen Meyerhardt, a spokesman for the U.S. Bureau of the Public Debt in Washington, said yesterday. “That’s beyond the fact that the face value is far beyond what’s out there.â€

Italy’s financial police last week said they asked the U.S. Securities and Exchange Commission to authenticate the seized bonds, with a face value of $134 billion. Colonel Rodolfo Mecarelli of the Guardia di Finanza in Como, Italy, said the securities, seized in Chiasso, Italy, were probably forgeries.

Meyerhardt said Treasury records show an estimated $105.4 million in bearer bonds have yet to be surrendered. Most matured more than five years ago, he said. The Treasury stopped issuing bearer bonds in 1982, Meyerhardt said.

Had the notes been genuine, the pair would have been the U.S. government’s fourth-biggest creditor, ahead of the U.K. with $128 billion of U.S. debt and just behind Russia, which is owed $138 billion.

According to the Italian authorities, the seized notes included 249 securities with a face value of $500 million each and 10 additional bonds with a value of more than $1 billion, as well as securities purported to be “Kennedy†bonds. Meyerhardt said no such securities exist.

Nowadays, Treasury securities are issued electronically. The U.S. started converting all of its marketable debt from paper to electronic form in the 1980s.

To contact the reporters on this story: Vincent Del Giudice in Washington at vdelgiudice@bloomberg.net

Last Updated: June 18, 2009 09:11 EDT

http://www.bloomberg.com/apps/news?pid=new...id=adc1HD7mWY4A

Thats that then I suppose, they are "fake" :unsure:

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The fact that theres 249 of them get s me thinking that a print run of 250 is a nice round number and 1 left over to QC the rest of them whenever they might do the next batch.

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Latest update

Not sure how reliable this source is though, maybe they made the bit in bold up.

(Turner Radio Network) -- Two Japanese men arrested by Italian Police while trying to smuggle $134 Billion in U.S. Treasury Bonds out of Italy into Switzerland concealed in suitcases, are employees of the Finance Ministry of Japan.

Turner Radio Network has now confirmed the two men arrested by Italy were trying to secretly dump Bonds that were previously being held by the nation of Japan. The men arrested have told Italian police they were ordered to move the Bonds by the government of Japan because the Japanese government has lost faith in the ability of the U.S. government to repay its debts.

Despite assurances from Japanese Finance Minister Kaoru Yosano about Japan's "absolutely unshakable†confidence in the credibility of the U.S. dollar, it is now confirmed based upon the serial numbers of the Bonds, that the $134 Billion is part of the $686 billion of U.S. debt officially held by Japan.

COMMENTARY:

The implications of this situation are monstrous: An ally of the United States has been caught trying to secretly unload U.S. government debt. This is unmistakable proof that the United States government is headed into economic collapse because nations around the world have now officially lost faith in its ability to repay.

The fact that $134 Billion in Bonds was intercepted by Italian Police was confirmed two days ago by Bloomberg Business news (here). Today's erevelation by TRN that the men arrested were employees of the Japan Finance Ministry is a huge development which will cause sudden and dramatic reaction worldwide.

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