Suitcase With $134 Billion Puts Dollar on Edge

[Teresa Heilevang]

I got this from a friend~~~

This may well turn out to be one of the biggest stories of the decade.
I've been watching it for about a week, since I was alerted by Jim Willie, the Golden Jackass. I highly recommend his web-site (pay) & articles.
Until today, there has been absolutely nothing in the "free press" US main-stream media. The Treasury Dept. has made no comment.


June 17 (Bloomberg) -- It’s a plot better suited for a John Le Carre novel.

Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.

Are these would-be smugglers agents of Kim Jong Il stashing North Korea’s cash in a Swiss vault? Bagmen for Nigerian Internet scammers? Was the money meant for terrorists looking to buy nuclear warheads? Is Japan dumping its dollars secretly? Are the bonds real or counterfeit?

The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale.

Read the rest of the story:
http://www.bloomberg.com/apps/news?pid=20601039&sid=a62_boqkurbI

[Rastus]

This is one of those "cloak and dagger" stories we should keep an eye on.  It has real implications for our economy.  When a currency is based upon people's faith in a government...well, things like this can start a breeze that portends later strong winds which can bring down a "house of cards".  It can be a wake up call for restoration....or ignored.

[Pathfinder]

This is one of those "cloak and dagger" stories we should keep an eye on.  It has real implications for our economy.  When a currency is based upon people's faith in a government...well, things like this can start a breeze that portends later strong winds which can bring down a "house of cards".  It can be a wake up call for restoration....or ignored.

Meanwhile, we hear "Pay no attention to the man behind that curtain" and "What curtain?", and finally "Here's the season finale of Real Housewives of New Jersey!".

[Rastus]

I can't find anything new on this story.  I would like to have more information....it feels like we aren't being told the entire story.

[runstowin]

These days $134 billion is chump change.

[Sponsor]

[Dharmaeye]

Most important, the total of Treasury paper "bearer" bonds outstanding is a mere $105 million, he said. The Treasury has been issuing bonds solely in electronic form since 1986, although a relative handful of investors never bothered to convert their bearer bonds to electronic form.


http://latimesblogs.latimes.com/money_co/2009/06/speculation-about-the-italian-smuggling-case-involving-134-billion-in-purported-us-treasury-bonds-may-have-been-fun-while.html

[Rastus]

Could be, but I'm still not exactly convinced.

Mafia blamed for $134bn fake Treasury bills
By FT reporters

Published: June 18 2009 19:52 | Last updated: June 18 2009 19:52

One summer afternoon, two “Japanese” men in their 50s on a slow train from Italy to Switzerland said they had nothing to declare at the frontier point of Chiasso.

But in a false bottom of one of their suitcases, Italian customs officers and ministry of finance police discovered a staggering $134bn (€97bn, £82bn) in US Treasury bills.

EDITOR’S CHOICE
Green energy tangled in web of shady deals - May-04Mafia link to Sicily wind farms probed - May-05Whether the men are really Japanese, as their passports declare, is unclear but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia.

Few details have been revealed beyond a June 4 statement by the Italian finance police announcing the seizure of 249 US Treasury bills, each of $500m, and 10 “Kennedy” bonds, used as intergovernment payments, of $1bn each. The men were apparently tailed by the Italian authorities.

The mystery deepened on Thursday as an Italian blog quoted Colonel Rodolfo Mecarelli of the Como provincial finance police as saying the two men had been released. The colonel and police headquarters in Rome both declined to respond to questions from the Financial Times.

“They are all fraudulent, it’s obvious. We don’t even have paper securities outstanding for that value,’’ said Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the US Treasury department. “This type of scam has been going on for years.’’

The Treasury has not issued physical Treasury bonds since the 1980s – they are handled electronically – though they still issue savings bonds in paper format.

In Washington a US Secret Service official said the agency, which is working with the Italian authorities, believed the bonds were fake.

Officials in Tokyo were nonplussed. Takeshi Akamatsu, a Japanese foreign ministry press secretary, said Italian authorities had confirmed that two men carrying Japanese passports had been questioned in the bond case but Tokyo had not been informed of their names or whereabouts.

“We don’t know where they are now,” Mr Akamatsu said.

Italian officials, while pointing out that hauls of counterfeit money and Treasury bills were not unusual, were stunned by the amount involved. Investigators are looking into the origin and destination of the fakes.

Italian prosecutors revealed last month that they had cracked a $1bn bond scam run by the Sicilian Mafia, with the alleged aid of corrupt officials in Venezuela’s central bank. Twenty people were arrested in four countries.

The fake bonds were to have been used as collateral to open credit lines with banks, Reuters news agency reported. The Venezuelan central bank denied the accusations.

[2HOW]

They have to say they are fake and blame someone. Or else it would be illegal, since these can not have been sold during the time frame indicated.

[Hazcat]

I don't understand the big deal.  After the recent SCOTUS ruling in the GM case, bonds are pretty worthless.

Now if they were union contracts............ 

[Teresa Heilevang]

As someone pointed out on Dharm link:
Why would anybody go through so much trouble? I can think of only two alternatives: The bonds are really fake and the plan was to get caught in order to make money on some big currency bets, or the bonds are real and the Treasury statement is part of an under-the-table deal to avoid embarrassment.
It could also be an attempt to cause panic in the bond market. If so, who is behind it?

I would put my $$ on the fact that as usual.. the government is neck deep in  corruption ( as usual)