2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy

[Peter Lemkin]

Italian/Swiss Border: GDP Of Indiana State ($134 Billion)Found In Briefcase
By Philip Palij
June 17, 2009 - 6:46pm ET
http://www.ourfuture.org/blog-entry/2009...-briefcase
I came across a story on the Japan Today Website "2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy".

My dormant righteous anal rectitude piqued I tried to put that figure into human terms and figure out what it all means.

First from Japan Today

2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy

Thursday 11th June, 06:18 AM JST

ROME —

Two Japanese nationals were detained by Italian financial police last week after trying to enter Switzerland with $134 billion worth of undeclared U.S. bonds, mostly Treasury bonds, an Italian daily said Wednesday. The Japanese consulate general in Milan confirmed that the detention had taken place and said it was trying to confirm with Italian authorities whether the two were indeed Japanese nationals and their identities.

According to the report in il Giornale, two unidentified Japanese in their 50s concealed the bonds, including 249 U.S. Treasury bonds each worth $500 million, in a suitcase with a false bottom that was searched by the Italian authorities June 3 when they were in Chiasso, at the border with Switzerland, about 50 kilometers north of Milan. The daily did not say on what charges they have been detained, but the two may have been detained on suspicion of attempting to take a large amount of securities out of Italy without declaring it because the paper said they had not declared the bonds.


After a few moments reflection on the appearance of this new wormhole in the financial firmament and in a mood of anything but sombre reflection I made the following observations....
Suitcase with a false bottom..... Hmmmm.....
$134 Billion...... Hmmmm........
Swiss - Italian Border. Porus. Normaly a gold lamee streaker with his hair on fire could get through. Hmmm.......
$500 Million Denomination. Who exactly would be interested in or indeed capable of handling bonds of this size. Hmmmm......
If its a government don't they have diplomatic bags for this sort of thing. Hmmmmm.....
Perhaps some nameles autonomous government department somewhere in a nameless state might be being audited soon and want to get their errant goodies back home. Who knows? don't you just love speculation? :-)

A fellow observer and fan of the growing Wall St and Fed surreal financialists movement alluded to a ringside seat at the mad hatters tea-party

It seems that almost daily, I see something weirder than the day before. This would be weird if it was $1B but $134B? Bizarre. Just how deep does this rabbit hole go?

It's very strange that this is one of those stories where there is essentially just one big weird unbelievable fact, and then the story goes cold. There is no explanation, and no more details are forthcoming.

"These aren't the bonds you're looking for."
"These aren't the bonds we're looking for."

"We're free to go."
"You're free to go."

"Move along."
"Move along."

Now I have a difficult time imagining what US$134,000,000,000, actually means in terms of the US Economy so I had a look at the Bureau of Economic Analysis (BEA) and found enlightenment.

In coming up with the figures the BEA summarizes the output from all industries in this picklist,



Its an impressive list: What would happen happen if the entire population of Indiana its corporations, government (maybe the same thing but I digress) Judiciary, cattle and livestock resident in the fine state of Indiana turned up with their GDP divided equaly among them and wanted to cross the border?

Can you see where I an going with this Financial Surrealists movement thing?

I sat back and watched carefully for a follow up. Sure enough it did appear in the financial blogosphere a few days later. Leaving the mainstrem press a study of studied silence. This wonderingly written piece from J.S Kim speculates further and I share with you now.


Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery

Here’s yet another huge financial story that has been virtually blacked out by the US financial media. Although on the surface, this story appears to be a non-event, if we consider some of the released facts about this case, you will understand why I consider it to be a huge story. On June 8th, the Asia News reported the following story:

“Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollars each. Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.”

Here are just a few fascinating facts about this case (at least they are being reported as “facts” at this current time):

(1) Though the smugglers have been identified in the press as “Japanese nationals” there has yet to be any confirmation if the smugglers were indeed Japanese or of some other ethnicity. How difficult is it to confirm the ethnicity of the smugglers and why is this information being kept secret?

(2) According to a brief Bloomberg article regarding this story, the seized bearer bonds allegedly were dated as of 1934. Since bearer bonds in denominations of $500 million did not exist in 1934, the bonds were deduced as fake, though the Italian police are still waiting for a declaration regarding the bonds’ authenticity from the SEC. There is something truly “off” about this declaration. How can the quality of the forged bearer bonds be so meticulous that they “are indistinguishable from the real ones”, yet the people involved in the alleged forgery so ill-informed as to not date the bearer bonds with a more recent year that would not immediately identify them as fraudulent? How hard would it have been to date the bearer bonds with a more recent year? An equivalent analogy would be if an expert art forger meticulously re-created a Picasso oil canvas and then erroneously signed the work with the wrong artist’s name. This story just does not add up.

(3) The Bloomberg story also reported that there is no known existence of the alleged 10 Kennedy bonds that were discovered in the smuggler’s suitcases, each with a denomination of $1 billion. Again, this discovery defies any logical explanation. Why would expert counterfeiters make 249 bearer bonds with denominations of $500 million apiece, each indistinguishable from the real thing, and then instead of just making 20 more such bonds, decide to make 10 bonds in denominations of $1 billion a piece in a bearer bond design that has never existed? Were the alleged counterfeiters just too lazy to confirm if Kennedy bearer bonds were ever a legitimately issued security? Again, this story makes no sense.

(4) On March 30, 2009, the US Treasury Department announced that USD $134.5 billion remained in its Troubled Asset Relief Program [TARP]. The stated amount of seized bearer bonds was $134.5 billion. Coincidence?

(5) The two well-dressed Japanese men opted to travel to Chiasso on a local train normally full of Italian manual laborers commuting to Switzerland. If they were really intent on successfully smuggling these bonds, counterfeit or real, why would they not take more care to select a travel route in which it was literally impossible for them not to stick out like two sore thumbs? Again, this part of the story defies all logic.

(6) The bearer bonds were discovered in a hidden briefcase compartment after a customs inspection. Again, if the bonds were indeed authentic and owned by a nation state, they could have been transported in a diplomatic pouch exempt from customs searches that would have guaranteed transport without detection.
Thus, all of the above irreconcilable and illogical points, other than the coincidence of the amount of the bearer bonds exactly matching the remaining TARP fund amount declared on March 30th, seem to indicate that not only were the seized bearer bonds counterfeit, but also that the smugglers were intent on being caught.
Before I continue, let’s review the purpose of bearer bonds.

Here is the Wikipedia definition of bearer bonds:

“A bearer bond is a debt security issued by a business entity, such as a corporation, or by a government. It differs from the more common types of investment securities in that it is unregistered – no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the paper on which the bond is issued owns the instrument. This is useful for investors who wish to retain anonymity. The downside is that in the event of loss or theft, bearer bonds are extremely difficult to recover.”

If you recall the Michael Mann movie “Heat”, starring Robert DeNiro and Al Pacino, during a daring daytime armored car robbery, the criminals specifically targeted millions of dollars of bearer bonds for theft precisely because of the above qualities of bearer bonds that make them very difficult to trace. Again, due to the properties of bearer bonds, it seems highly unlikely that $134.5 billion of bearer bonds would be transported, if they were real, by two men with no security, since theft almost guarantees that they would be lost forever.

Thus far, about the only piece of information that appears to be reliable as reported by various news sources regarding this huge mystery is the remarkable authenticity of the 249 seized bearer bonds in denominations of USD $500 million. If any of the other facts, as they are being reported, are remotely accurate, then the bearer bonds were likely counterfeit. Still, the interesting part of this story, at least to me, is that the smugglers seemed intent on being caught with the counterfeit bonds. This leads me back to my previous question. What possible reason would the smugglers have for wanting to be caught? One of the quickest ways to sabotage and usher in the death of a currency is to raise legitimate questions about its ability to withstand counterfeiting efforts. Prove that counterfeiting is not only possible but highly likely, and the world’s confidence in the sabotaged currency will undoubtedly plummet.

In fact, this very tactic was applied during World War II when the Nazis launched Operation Bernhard in an attempt to crash the British economy by producing, by 1945, 132 million expertly counterfeited British pounds, a figure that represented roughly 15% of all real British pounds in circulation at the time. The counterfeit pounds were produced by expert printers and engravers supervised by an SS officer named Bernhard Krueger. As well, historical evidence exists that the Allies considered launching a counter-counterfeit plan against the Nazis as well. During this time, it was also alleged that the Bank of Italy counterfeited their own money by issuing the same securities twice with identical registered numbers and codes in order. The purpose of this counterfeiting was to secretly expand monetary supply without public transparency or accountability. Perhaps then, this $134.5.billion bearer bond mystery was an attempt of a nation state to shake the world’s confidence in the position of the US dollar as the world’s reserve currency.

There should be little debate that the world’s emerging economies in Russia, Brazil, China and certain Gulf Nations are at economic war today with the world’s Western nations and their economic allies. The currency war being fought today is sure to get much uglier in the foreseeable future, in both open tactics as well as secretly executed tactics. Currently, if the currency war were the world series of poker, the US and the UK would be holding a pair of 2s and relying on nothing but bluffs to keep the rest of the world at bay. Conversely, the Chinese and other emerging nations with large surpluses would be holding straight or royal flushes, and likely quietly maneuvering to go “all in” at some point.

Given that the discovery of $134.5 billion of bearer bonds in the suitcases of two Japanese nationals in Chiasso, Italy on the border of Switzerland qualifies as one of the largest smuggling operations in history, and given the various implications of such an act and the possible players involved, the silence regarding this huge story is simply stunning. It is not a huge story, per se, because of the counterfeiting operation, because accusations and revelations of massive money counterfeiting operations have occured in the past. It is a huge story, rather, due to all the inconsistencies of the story and the potential explanations that could explain these inconsistencies. The larger story at hand is, who are the players (nations) involved, and what was the intention of this likely counterfeiting operation? Maybe the future will reveal the answers to these questions. But maybe not.

Please if anybody gets an update, or idea, of what is going on this let me know. Thanks to the citizens of Indiana for all their hard work in making this comparison possible.

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Notes

Anal retentive - From Wikipedia

The term anal-retentive (or anally retentive, anal retentive), commonly abbreviated to "anal", is used conversationally to describe a person with such attention to detail that the obsession becomes an annoyance to others, and can be carried out to the detriment of the anal-retentive person. The term derives from Freudian psychoanalysis.

Rectitude - Straightness.

Rightness of principle or practice; exact conformity to truth, or to the rules prescribed for moral conduct, either by divine or human laws; uprightness of mind; uprightness; integrity; honesty; justice.

Surrealism

Surrealist works feature the element of surprise, unexpected juxtapositions and non sequitur; however, many Surrealist artists and writers regard their work as an expression of the philosophical movement first and foremost, with the works being an artifact. Leader André Breton was explicit in his assertion that Surrealism was above all a revolutionary movement.