Karl Denninger's onto this too. He has an interesting and very plausible take on it. Short version: They are genuine but, since there are no longer that amount of legitimate (ie on-balance sheet) US bearer bonds in existence, illegitimate (ie off-balance sheet to hide their issuance). - Now who's that calling for an audit of the Fed???
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 suitcasebillion-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.
Peter Presland
".....there is something far worse than Nazism, and that is the hubris of the Anglo-American fraternities, whose routine is to incite indigenous monsters to war, and steer the pandemonium to further their imperial aims" Guido Preparata. Preface to 'Conjuring Hitler'[size=12][size=12] "Never believe anything until it has been officially denied" Claud Cockburn
If there are Charlie, I suspect it would be the M-fund side of things, Marquat and his nice little "earner". That they are Japanese involved further strengthens this idea.
The shadow is a moral problem that challenges the whole ego-personality, for no one can become conscious of the shadow without considerable moral effort. To become conscious of it involves recognizing the dark aspects of the personality as present and real. This act is the essential condition for any kind of self-knowledge.
14-06-2009, 11:12 AM (This post was last modified: 14-06-2009, 11:33 AM by Peter Lemkin.)
Peter Presland Wrote:Karl Denninger's onto this too. He has an interesting and very plausible take on it. Short version: They are genuine but, since there are no longer that amount of legitimate (ie on-balance sheet) US bearer bonds in existence, illegitimate (ie off-balance sheet to hide their issuance). - Now who's that calling for an audit of the Fed???
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 suitcasebillion-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.
War is said to be 'politics by other means' and increasingly it seems to me warfare of both external and internal varieties utilize financial instruments, as much as armies et al. Strange, but no surpise, that there is little coverage in the MSM in the USA - as the MSM is reporting and censoring for those in power [the elites, not the 'elected']. Someone doesn't want this story told.....it thus bears much watching! [It's 'Deep'] Is there no mention yet on who these two Japanese persons are? They obviously didn't own a raman stand!.... The analysis/speculations above seem to me very interesting and perhaps closing-in on the truth. I'd not be surprised, however, if this storywas one of those 'funny things' that just 'died'.
"Let me issue and control a nation's money and I care not who writes the laws. - Mayer Rothschild
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass
Curiouser and curiouser said Alice.
Bloomberg are saying that the date of issue for the bonds was 1934. http://www.bloomberg.com/apps/news?pid=n...JXAA1ahZyo
And the amounts seized in Italy match the amounts of available funds in TARP.
Is Japan worried about the US Dollar and cashing in now? Do they know some thing others do not.
Who tipped off the Italians who get a 1/3 or more of the total as a fine for smuggling currency? Did these guys want to be caught riding a workers train in their Armani suits and briefcases? Why not fly straight into Switzerland. They have airports I hear. Why not use diplomatic pouches if it was government level? And they have been released. Why? No customs or immigration laws broken?
Very interesting indeed Magda. I liked the way the Italian "Bill" said the bonds were "probably" forgeries. For decades there have been some very strage goings on in regard to gold certificates dated to 1934 that are said (or at least whispered to be) related to the disappearance of a large quantity of gold bullion and jewelry from China following the invasion of Manchuria by the Japanese in 1931. I was told by a family member seeking the return of this treasure that this hoard was shipped to the US and, according to the family member anyway, has never been returned or relinquished by the US. All enquiries please to Citibank (or as it was then, FNCB, First National City Bank).
I direct your attention in this regard to an odd little story on the International Association for Crytpologic Research - and I can assure you that this story has considerable legs.
Having said all that I am mildly suspicious that Bloomberg appear to be playing down the Kennedy Bonds angle originally presented by other media. Deflection perhaps?
The shadow is a moral problem that challenges the whole ego-personality, for no one can become conscious of the shadow without considerable moral effort. To become conscious of it involves recognizing the dark aspects of the personality as present and real. This act is the essential condition for any kind of self-knowledge.
Via a poster on Karl Denninger's Market Ticker site:
Quote:1934 MORGENTHAU TREASURY BONDS
A problem that has been most prevalent in the Far East recently surfaced in London when officers from the City of London Fraud Squad seized fake $US Treasury Bonds with a nominal value in excess of $2.5 trillion.
On the first occasion $2.5 trillion worth of these bonds was seized from a safe keeping vault of a bank in the City of London in an assortment of 44 boxes, files and envelopes. Among the haul were a number of counterfeit Chinese Railway Bonds dating from the early part of the 1900’s.
Although genuine Chinese Bonds have a collector's value of about £20 each, the faked US Treasury Bonds are well known to the US Secret Service and other law enforcement agencies, in Hong Kong, Singapore, the Philippines, and Canada. Attempts have been made by fraudsters to use them as collateral for loans or to obtain money from naïve investors.
On the second occasion a number of people were arrested in the City of London after presenting billions of dollars worth of these bonds to a financial institution attempting to obtain “facilities”. Two women have been charged.
The story usually given by the fraudsters is that these bonds were printed by the CIA and given to Chiang Kai Sheck who opposed Chinese Communism in the 1930’s. However, so the story goes, some were lost and were then found in caves/crashed aircraft/sunken submarines (take your pick) by illiterate natives who passed them on to city slickers in exchange for a few trinkets. The fraudsters have even attached details of a B17 bomber, its tail number and details of the crew which perished in a crash in the rainforests of some distant tropical island.
Investors in the Far East have parted with huge sums of money to buy these bonds at 1¢ in the dollar. In June 2001 a US resident shot his wife and two children then turned the gun on himself after finding that these bonds, which he tried to encash at the US Bureau of Public Debt, were complete fakes.
Invariably the bonds are contained in what looks like a metal box with a serial number and a key number. The seal of the United States is usually embossed on to box lid. Once opened, the box will contain the bonds (which have a peculiar creosote aroma), sometimes large and heavy yellow metal coins in denominations of anything from $100m - $1bn, a negative film roll and a supporting documents such as an international certificate of immunity.
Although the Treasury Bonds are well presented, the fraudsters did not realise that the various Federal Reserve Banks have codes attached to them as follows:-
Some of the treasury notes have the incorrect seal code for the Federal Reserve Bank purporting to have issued the note. How did this happen? Quite simply, the fraudsters cut and pasted images of current $US currency into the bonds and they didn’t look too closely or they didn’t understand what the codes meant. On occasion, if you know where to look, you can see the remnants of the currency that they have tried to hide or cut in the process.
If you are presented with documents of this nature, the US Secret Service at the US Embassy would be delighted to hear about it and will assist in any way that they can.
For other examples of this high profile crime please see the following web pages:-
"It means this War was never political at all, the politics was all theatre, all just to keep the people distracted...."
"Proverbs for Paranoids 4: You hide, They seek."
"They are in Love. Fuck the War." Gravity's Rainbow, Thomas Pynchon
"Ccollanan Pachacamac ricuy auccacunac yahuarniy hichascancuta." The last words of the last Inka, Tupac Amaru, led to the gallows by men of god & dogs of war
14-06-2009, 07:51 PM (This post was last modified: 14-06-2009, 08:29 PM by Peter Lemkin.)
Magda Hassan Wrote:Curiouser and curiouser said Alice.
Bloomberg are saying that the date of issue for the bonds was 1934. http://www.bloomberg.com/apps/news?pid=n...JXAA1ahZyo
And the amounts seized in Italy match the amounts of available funds in TARP.
Is Japan worried about the US Dollar and cashing in now? Do they know some thing others do not.
Who tipped off the Italians who get a 1/3 or more of the total as a fine for smuggling currency? Did these guys want to be caught riding a workers train in their Armani suits and briefcases? Why not fly straight into Switzerland. They have airports I hear. Why not use diplomatic pouches if it was government level? And they have been released. Why? No customs or immigration laws broken?
And most interesting of all still no MSM coverage.
Wow! That was REALLY a large amount of money in 1934!!!!
The entry into Switzerland via Italy by train?!.....something doesn't fit and is not 'kosher' here....correction - many things!
"At the same time, Japan’s Kyodo news agency has reported that the resignation of Japan’s Interior Minister Kunio Hatoyama might also be related to the Ponte Chiasso affair. Officially the minister quit as a result of a row over who should head the state-owned Japan Post, but some sources have suggested that such a scenario is not very plausible since Mr Hatoyama was Prime Minister Taro Aso’s main ally in his rise to the prime minister’s office, and is especially unconvincing since the ruling coalition government has to face elections in just two weeks time. Indeed there are many reasons to connect the Ponte Chiasso incident to the minister’s resignation."
Anyone into coincidences? http://www.reuters.com/article/reutersEd....
U.S. TIC data show that during the 12 months ending January 2007, Japanese investors bought just $18.2 billion in Treasury coupons, or approximately $1.5 billion a month, a sharp contrast from the 12 months ending January 2005 when Japanese investors purchased $134.5 billion of U.S. government debt, McCarthy noted.
and, as has been already noted above.....
The Treasury Department said it has about $134.5 billion left in its financial-rescue fund.
"Let me issue and control a nation's money and I care not who writes the laws. - Mayer Rothschild
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass
Quote:An Open Letter To The Secretary Of The Department Of The United States Treasury
Posted by Marla Singer at 1:25 AM
Dear Mr. Geithner:
No doubt you are already aware of the wild stories circulating in response to the news that two Japanese nationals were caught trying to smuggle some $134 billion in U.S. Government bearer bonds into Switzerland from Italy. Since the Secret Service seems a bit slow in addressing the issue (What's the problem? Haven't you hired an undersecretary of Secret Service motivation yet? Couldn't you get Agent Frank Horrigan out of retirement and send him on special assignment or something?) and the Italians change their story about the instruments almost as often as they change governments, we thought you might benefit from some of our analysis.
Obviously, with respect to authenticity, there are three options:
1. All the documents are fake.
2. Some of the documents are fake.
3. None of the documents are fake.
Taking these in order-
1. All the documents are fake. (Likely)
If all the documents are fake then the possibilities narrow to some degree:
Perhaps the work of a technically sophisticated but socially inept counterfeiting operation that is most likely attempting to dupe gullible private citizens or low-level managers. As of today an Italian Colonel in the Guardia di Finanza was complimenting the workmanship of the documents and speculating some of them might be authentic (at least to the European press). Leaving aside for a moment the rather dire career consequences such pronouncements might have, one assumes the Italians have some experience with forged documents. Admittedly, however, such expertise might not readily flow up to an officer politically focused enough to reach the rank of Colonel in any Italian organization. (I think I met one at a party in Miami once).
It would be a short-lived game once someone tried to pass one to an institution of any note. One assumes any bank large enough to accept such instruments into anything other than a safe-deposit box has best-practices methods to authenticate them, the key portion of which would be contacting the issuer (since the Fed doesn't issue/hasn't issued bonds like this, this would have to be the Treasury). Obviously, the Treasury would maintain specimen copies and make these available via facsimile transmission for a first-blush gut check. Still, Swiss institutions are highly unlikely to accept even authentic bearer instruments from a U.S. issuer without a very detailed provenience investigation. Further, even bearer bonds are serialized, meaning that it should be a trivial matter to establish if the securities these documents purport to be were actually issued. As technically sophisticated as such forgeries might be, absent access to authentic originals, details like issue dates and proper serial numbers would be hard to obtain.
Some support for this theory:
None of the coupons on the various documents appear to have been clipped. Since the Treasury has not issued bearer bonds since 1982 or 1985 (depending who at Treasury you ask) if these documents were authentic someone has taken a serious inflation beating on the deferred interest payments. (Turns out that high denomination instruments weren't printed after late 1969).
The Treasury claims that less than 1% of "marketable securities" are in bearer form. $134 billion in bearer bonds would imply some $13 trillion in marketable securities (assuming that class includes these bonds). This conflicts with the amount of "Total Marketable U.S. Treasury Securities Outstanding" for November 2008, as reported in Table B-87 of the 2009 "Economic Report of the President." That document lists total Marketable U.S. Treasury Securities Outstanding" as $5.82 trillion. All outstanding Treasury securities are listed in the same table as $10.66 trillion with "Unmarketable Securities" taking up $4.83 trillion. Note that in the category of "Marketable Securities" "Treasury Bonds" are listed at a "mere" $594.6 billion.
Even if we choose to discount the Treasury's offhand "1%" figure, it is difficult to imagine that a huge portion of the outstanding treasury securities would be in the form just a few, similar documents that somehow found their way into a single briefcase on the Swiss-Italian border.
High quality counterfeit "Federal Reserve Bonds" and the like are apparently common and seem to originate from Indonesia and other places where unrest has permitted high quality presses to fall into nefarious hands.
2. Some of the documents are fake. (Possible).
This would be quite possible if our two Ninja Smugglers were delivering a sample original document and a set of fake duplicates to show a buyer the quality of the forgeries. In this case you are still dealing with a technically competent counterfeiting operation, but now you have one with access to at least one of the originals. That begins to feel like a state sponsored operation, or, at the very least, a rather amazing theft story. One wonders why the theft of a $500 million bearer bond (the smallest possible denomination according to the Guardia di Finanza) would not be reported, but stranger things have happened behind the walls of an embarrassed bank.
The Treasury did in fact issue $500 million denominated instruments between 1955 and 1969, starting in early 1955 along with $100 million instruments. In fact, all of the Treasury bonds printed in the early 1950s were bearer instruments with coupons. Imagine processing half a million coupons and you start to understand why the larger denominations were attractive. The last were apparently printed in late 1969. It seems clear that $1 billion instruments were never issued. Those would appear to be forgeries.
Taking the "theft" example, having no hope of passing the document (provenience investigation) one could still maximize value by counterfeiting it and, as before, selling the result to foreign intelligence services, governments, or just gullible American/Japanese/French tourists in Italy/Switzerland.
It is also entirely possible that this is the work of a government. (Foreign or domestic). There is quite a great deal of precedent here The German Operation Bernhard, named for SS Major Bernhard Krüger, forged a huge number of small and medium denomination Bank of England pound notes during World War II, to provide their agents with currency, to pay for war material from foreign sources and to destabilize the British economy. At its peak the work was of such high quality that the Bank of England itself readily accepted the currency. Over GBP 100,000,000 was printed just in 1945. The Germans actually planned... wait for it... wait for it... to drop the currency from airplanes over England (apparently the very few helicopters that existed at the time had insufficient range) but the Luftwaffe, badly weakened by then, did not have the air power. Examples of the notes still occasionally turn up though the Bank of England invalidated several series of the relevant currency denominations in response to the counterfeits.
More recently, the origins of high quality forgeries of $100 notes, the "PN-14342" family, have been attributed to Iran (which printed its own currency on Intaglio presses prior to the revolution) North Korea, Russia and even the CIA (permitting it to evade congressional budget oversight).
Motives for foreign counterfeiting of such notes should be obvious. They are less so, perhaps, for high denomination bearer bonds. This is the hitch in this "fake" bit. That's a lot of bonds to have in the same place and one assumes even a Guardia di Finanza Cadet would notice if the serial numbers were all the same and not bother to pester the American Secret Service for authentication. Why print more than one serial number with such high denominations? Lot of work, that. Could it really be that no one noticed this? (Well, it is Italy, after all).
3. None of the documents are fake (unlikely).
For the purposes of amusement, and delving for a moment into (REALLY into) the realm of aluminum foil (Haven't you ever stopped to wonder who it was who pulled real tin-foil off the market and forced everyone to move to the aluminum variety? And why?) there is the (slim) possibility that you printed the damn things. That splits us into a number of alternatives:
Some foreign government (no corporate entity or individual has $134 billion laying around) has been holding the things to use as portable cash in emergencies. (This would explain the lack of coupon clipping- who cares about interest when you are just looking for portable wealth?) Or perhaps they haven't even been holding them for a long while, but exchanged them recently to facilitate their clandestine cross-border movement- perhaps even with the acquiescence/assistance of the Treasury. (After all, it would look pretty bad if that much U.S. debt was moved around openly). Here ya go [China (~$760 billion)/Japan (~$680 billion)/Russia (~$140 billion)] a bunch of bearer bonds we had laying around in the archives so you can smuggle the things into Switzerland.
Technically the difference between a valid and invalid Treasury bond is the willingness of the Treasury to accept it. Excellent deniability here. If anything at all happens you can just disavow the documents, reissue some other ones, or not, whatever. This would answer the question "how did anyone think that any bank would accept such large denominations?" The Treasury would validate the documents, of course. This would, however, not answer the question as to why two individuals traveling on Japanese passports would be attempting to slip into Switzerland in the best amateur hour smuggling operation since the guy who dropped two kilos of cocaine on the floor while standing at the immigration counter at JFK.
What might answer that question in this highly unlikely but entertaining scenario is the fact that this sort of rank incompetence is quite characteristic of the Japanese generally and Japanese Intelligence (Naikaku Jōhō Chōsashitsu) specifically. Hardly a month goes by without news of some executive with a case filled with brand new U.S. hundred dollar bills in Tokyo. At one point in 1998 a briefcase with $50 million in negotiable instruments was left in the Tokyo subway by an intoxicated bank executive.
Perhaps Japan wants to move capital offshore in preparation for general hostilities related to North Korea's increasingly evident mental deficiency.
We have heard a few reports that the individuals weren't arrested (though these aren't well sourced) and the Japanese consulate doesn't seem to know (or want to tell anyone) if they are actually Japanese nationals. (What's the hold up? You've got passports and passport numbers. Should be a matter of hours to get that figured out).
We would be remiss if we did not point out the (fanciful) possibility that this was the Treasury's doing entirely. Why?
Perhaps you intentionally orchestrated the discovery of the instruments which you will now rule counterfeit to cast doubt on similar instruments you would prefer not to redeem. (Play rough with us, China, see what happens).
Perhaps you were establishing credit with a foreign financial institution from which you could buy more Treasuries (hah) or otherwise buoy the market (S&P 500 futures are a popular theory for manipulation these days) without tipping the Treasury/Fed's hand in the process. (Credit Suisse and UBS both have enough AUM to conceal a "mere" $134 billion).
Perhaps you wanted an easy way to tip the debt crippled Italy 40% of $134 billion (the forfeiture fine for failing to declare) without congressional oversight. That buys a lot of Fiats. China or Japan will probably be blamed for the "incident" and no one will be surprised if it is hushed up. Instead everyone will assume that the remaining 60% went back to the original holder and Italy gets $53 billion without a lot of questions. Clever, Mr. Geithner, JamesTim Geithner.
Of course, any of these "they're real" options brings up a rather serious question:
Since these securities appear to have been off the books, and none of the Treasury disclosures about foreign or domestic holdings would seem to support this many bearer instruments (much less this many in the same place) how do we (does anyone) ever believe any statements about the size of outstanding U.S. debt again?
Whatever the case you have to admit that it is a sad state of affairs when, under your stewardship of the Department of the Treasury, an incident like this stirs up even the slightest suspicion rather than being immediately relegated to pages of "Treasury Debt of Honor," the latest Tom Clancy pulp to be found in the "thriller" section of one of LaGuardia's HMSHost owned bookstores.
We challenge you to do the right thing. That, of course, is to come out with a clear, concise statement ending the sort of speculation that, while currently confined to fringe financial blogs, has begun to creep into major outlets. (Handelsbaltt, for instance). Be careful, though. If someone suddenly notices that Italy has gone on a spending spree (Dodge Vipers for EVERYONE!) we hope you have a good lawyer. (Though, after the Turbo Tax Teflon, we suppose that's not really an issue).
"It means this War was never political at all, the politics was all theatre, all just to keep the people distracted...."
"Proverbs for Paranoids 4: You hide, They seek."
"They are in Love. Fuck the War." Gravity's Rainbow, Thomas Pynchon
"Ccollanan Pachacamac ricuy auccacunac yahuarniy hichascancuta." The last words of the last Inka, Tupac Amaru, led to the gallows by men of god & dogs of war
15-06-2009, 05:35 AM (This post was last modified: 15-06-2009, 06:22 AM by Peter Lemkin.)
Very interesting 'letter' and also made me fall off my chair laughing. Anyway this plays out is going to be very strange. The reticence to identify the nature of the two persons and verify if the instruments are real or not is very strange indeed!......One does start to wonder how much of this 'kind' of thing goes on that doesn't ever make the news [i.e. didn't get caught by an insider leak, as appears to be the case here]. It does increasingly seem like a chapter from Sushi in Financial Wonderland. Also, why the blackout from the MSM? If they were fake one would think they'd have rapidly been declared as such.....unless they were 'official fakes'....or real that they are going to claim are fake or...?!?!.....[Cheschire Cat Grin]. Proof 'real' life these days is stranger [and Deeper] than fiction. No one would read this kind of stuff, if you made it up!
"Let me issue and control a nation's money and I care not who writes the laws. - Mayer Rothschild
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass
Jan Klimkowski Wrote:Via a poster on Karl Denninger's Market Ticker site:
Quote:1934 MORGENTHAU TREASURY BONDS
A problem that has been most prevalent in the Far East recently surfaced in London when officers from the City of London Fraud Squad seized fake $US Treasury Bonds with a nominal value in excess of $2.5 trillion.
On the first occasion $2.5 trillion worth of these bonds was seized from a safe keeping vault of a bank in the City of London in an assortment of 44 boxes, files and envelopes. Among the haul were a number of counterfeit Chinese Railway Bonds dating from the early part of the 1900’s.
Although genuine Chinese Bonds have a collector's value of about £20 each, the faked US Treasury Bonds are well known to the US Secret Service and other law enforcement agencies, in Hong Kong, Singapore, the Philippines, and Canada. Attempts have been made by fraudsters to use them as collateral for loans or to obtain money from naïve investors.
On the second occasion a number of people were arrested in the City of London after presenting billions of dollars worth of these bonds to a financial institution attempting to obtain “facilities”. Two women have been charged.
The story usually given by the fraudsters is that these bonds were printed by the CIA and given to Chiang Kai Sheck who opposed Chinese Communism in the 1930’s. However, so the story goes, some were lost and were then found in caves/crashed aircraft/sunken submarines (take your pick) by illiterate natives who passed them on to city slickers in exchange for a few trinkets. The fraudsters have even attached details of a B17 bomber, its tail number and details of the crew which perished in a crash in the rainforests of some distant tropical island.
Investors in the Far East have parted with huge sums of money to buy these bonds at 1¢ in the dollar. In June 2001 a US resident shot his wife and two children then turned the gun on himself after finding that these bonds, which he tried to encash at the US Bureau of Public Debt, were complete fakes.
Invariably the bonds are contained in what looks like a metal box with a serial number and a key number. The seal of the United States is usually embossed on to box lid. Once opened, the box will contain the bonds (which have a peculiar creosote aroma), sometimes large and heavy yellow metal coins in denominations of anything from $100m - $1bn, a negative film roll and a supporting documents such as an international certificate of immunity.
Although the Treasury Bonds are well presented, the fraudsters did not realise that the various Federal Reserve Banks have codes attached to them as follows:-
Some of the treasury notes have the incorrect seal code for the Federal Reserve Bank purporting to have issued the note. How did this happen? Quite simply, the fraudsters cut and pasted images of current $US currency into the bonds and they didn’t look too closely or they didn’t understand what the codes meant. On occasion, if you know where to look, you can see the remnants of the currency that they have tried to hide or cut in the process.
If you are presented with documents of this nature, the US Secret Service at the US Embassy would be delighted to hear about it and will assist in any way that they can.
For other examples of this high profile crime please see the following web pages:-
Now why would this nice poster actually make a post about fraudsters using wrong Federal Reserve bank district codes and then post the accurate Fed Reserve banks codes?
Answers on a postcard addressed to the US Department of the Treasury Secret Service please.
Anyway, a nice, clean, authorized version of events the foregoing. Time for a trip down memory lane.
Methinks someone on Denninger's forum has US Treasury connections. I was also interested to note that attention was directed to Tony Wells website (the bottom link) for any number of "apparent" frauds of a similar nature. Which is odd, because a decade and more ago on a blackmarket website since lost to the Klingon empire, I believe I recall seeing a rather large singe diamond of pristine characteristics being offered for sale - ex Philippines by, Lordy, Tony Wells. I believe I even contacted Tony Wells at the time about this but alas, got no answer.
In those days (it was still the heady cybernet wild west days) there were a small number of black market websites around where interested parties could sellor buy, for example, any one of dozens of black market items --- gemstones, quantities of cash for "swapping" from one currency to another (the swap to take place inside a reputable and well known security companies bonded warehouse no less), gold bars ex South African mining companies (a tax dodge obviously), gold dust, silver bars, Colombian cartel emeralds, Russian Mafiya "trinkets", Yeltsin loot --- the list just goes on and on and on. One of the regular more innocent items for sale were shipping container of "Master Cartons" of (for example) Philip Morris and Red Morlboro fags available Free on Board at Rotterdam for relative peanuts. Curious, I even phoned BAT in London under my journalistic credentials and asked how many cigarettes a "Master Carton" contained. I had no idea of the consternation I would cause, but after a couple of phone discussions I realized that the fag manufacturers were the "guiding minds" behind this black market business.
And concerning the US Bureau of Public Debt referenced by the foregoing poster, there was a fairly senior officer of that entity who inhabited all these "black" boards. He kept some interesting company. Years later he was sacked for taking a bribe.
Quote:The fraudsters have even attached details of a B17 bomber, its tail number and details of the crew which perished in a crash in the rainforests of some distant tropical island.
Why not just come out and say the Philippines? After all that's the story that went around and around and around.
The Kennedy Bonds aspect is now almost well and truly lost and forgotten. Which was to be expected, I think. But moi is not going to let it slip away quite so easily. JFK and Sukarnoe were really on quite cordial terms don't you know. JFK got assassinated and then Sukarnoe overthrown, thanks to the CIA's Frank Wisner. And I do have copies of a purported agreement between JFK and Sukarnoe concerning the use of alleged Indonesian gold - that may well have had Philippine and Japanese fingerprints on it. This agreement is one of those that clearly are fake - but which, according to some, represent an echo of a far more secret agreement.
Sukarnoe's daughter, Megawati Sukarnoputri (long before she was elected Prime Minister) during a chance meeting at a hotel in Zurich told Peter Johnston that so far as she was aware the "Secret Treaty" certificates were genuine.
The shadow is a moral problem that challenges the whole ego-personality, for no one can become conscious of the shadow without considerable moral effort. To become conscious of it involves recognizing the dark aspects of the personality as present and real. This act is the essential condition for any kind of self-knowledge.
