$134.5 Billion's worth of bonds seized Options

[callmejoe]

http://market-ticker.denninger.net/archive...t-Printing.html

[ziknik]

Wow.

I bet they are real. Fakes could have been sent in the post with less risk of getting caught

[DrBubb]

Milan (AsiaNews) – 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 dollar each.

Those sound like Bearer Bonds - at least the Kennedy ones do.

We no longer issue those (nor does pretty much anyone else) for obvious reasons - they're essentially money and can be had in VERY large size, making them great vehicles for various illegal enterprises.

But folks: This is $134.5 billion dollars worth.
If they're real, what government (the only entity that would have such a cache) is trying to unload them?

Very big numbers !
Whose money? I reckon they are counterfeit. But who would buy them?

[callmejoe]

As Denninger said:

The cute part of this is that if the certificates are real Italy just got a hell of a bonanza - their money laundering laws provide for a statutory 40% penalty for failure to declare instruments and cash in excess of $10,000 Euros, which means they'd garner a close-to-$40 billion dollar windfall.

[callmejoe]

Someone suggested this could be a North Korean counterfeiting job. Sounds plausible.

[callmejoe]

Golly gosh, someone thinks they are real!

Italy will have a windfall.

http://market-ticker.denninger.net/archive...arer-Bonds.html

[Ret45]

Golly gosh, someone thinks they are real!

Italy will have a windfall.

http://market-ticker.denninger.net/archive...arer-Bonds.html

Let's assume for a second that they are real (as the article points out, how do you pass off a fake $500 m bond!). One scenario is that Barack calls Silvio and, after a man-to-man, they agree its best to keep this under wraps and some story is spun to the media to put the whole thing to bed. The other is that it blows up - apart from having fun watching the thing unfold, how do you trade this? short the dollar? short treasury bond futures?

edit: is this a black swan - cgnao where are you?

[callmejoe]

More on this topic
http://zerohedge.blogspot.com/2009/06/open...department.html

[nicejim]

Treasury Has $134.5 Billion Left in TARP
http://online.wsj.com/article/SB123828522318566241.html

Had?

[libspero]

Just an update..

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

If anyone is interested (sorry, no link)

[VictorBroom]

Some time ago but any relevance I wonder?
http://news.bbc.co.uk/1/hi/world/asia-pacific/1180171.stm

[callmejoe]

Now someone else has been caught in Italy trying to smuggle 15B euros of Japanese bonds into Switzerland.

http://translate.google.com/translate?u=ht...en&ie=UTF-8

[callmejoe]

Spokesman for Treasury's Bureau of Public Debt said that the $134.5B bonds are fake. "Based on the photos we've seen on the Web, they're not even close to looking like a Treasury security."

http://www.lloyds.com/CmsPhoenix/DowJonesA....aspx?id=433065

Guess nobody even bothered to fax them any of the documents to examine.

[callmejoe]

'Twas the mafia but why did they release the guys?
http://www.ft.com/cms/s/0/82091ec2-5c2f-11...144feabdc0.html

[callmejoe]

From Denninger
http://market-ticker.denninger.net/archive...s-More-Odd.html

The Bond Saga: It Gets More Odd

Well, just when you thought that the Bearer Bond story was finished, it
gets twisted yet again.

Remember, this was the claim:
“They’re clearly fakes,” said Stephen Meyerhardt, a spokesman for
the U.S. Bureau of the Public Debt in Washington.

Uh, Bloomberg..... how about an *accurate* quote
<http://www.reuters.com/article/companyNewsAndPR/idUSN1946360420090619>?

"*Based on the photograph we've seen online*, they are clearly fake.
And not even good fakes," said Stephen Meyerhardt, a spokesman for
the Treasury's Bureau of the Public Debt.

Online? You mean that the Treasury Department hasn't been sent a
high-resolution digital photo of what was seized? A week after the fact?

I don't believe you Stephen.

In the last two years, Italian authorities have seized some $800
million of U.S. bonds in the Como area in northern Italy.

Those would be real bonds, I assume? But I thought Stephen said....

He added that there is only $105 million in Treasury bearer bond
securities outstanding, so the $134 billion amount seized far
exceeds the universe of outstanding securites.

Wait a second...... $800 million in real bonds have been seized, but
there are only $105 million outstanding? There may be some confusion
here as to whether all these bonds are "bearer" instruments or not, but
even if not, a registered paper bond is worthless if stolen, as its
purchaser is known and before anyone is going to redeem it for you
they're going to verify not only its authenticity but that you're the
rightful owner.

Another U.S. official said the seized bonds were purported to be
issued during the Kennedy administration in the early 1960s, but the
certificates showed a picture of a space shuttle on it -- a
spacecraft that first flew in 1981. Some of the bonds were
purportedly issued in a $500 billion denomination that never existed.

If there's a picture of a shuttle on the bond with an issue during the
Kennedy Administration, its definitely fake of course. But... where are
the actual pictures of these seized bonds?

And are they still seized? That's an even better question; there appear
to be (at least) two different stories there too
<http://bellaciao.org/en/spip.php?article18905>:

*Under Italian law when law enforcement agencies seize fake bonds or
counterfeit money they are under the obligation to arrest the
bearers*. And in order to avoid misappropriation, the agency seizing
the material, in this case the financial police, must quickly
proceed to its destruction (i.e. incineration).

However, in case of real securities, after the securities holders
are identified, the financial police *must release them immediately
after issuing a statement of confiscation* and imposing a fine
valued in this case at € 38 billion (US$ 53.4 billion). *In this
case, why were the two men released right away without any fine
imposed*?

It doesn't end there:

If what Meyerhardt says is true, *some major financial institutions
have been deceived by the securities carried by the two Asian men.
This would be a bombshell and raise serious questions as to how many
bank assets are actually made up of securities that for Meyerhardt
are “clearly fakes.”*

If counterfeit securities of such high quality are in circulation
the world’s monetary system, let alone that of the United States, is
in danger. International trade and exchanges could come to a halt.

Hmmmm... sensationalist conclusion without foundation? Maybe.

Now for the somewhat-tin side of things - or maybe, a LOT of tin.
Warning - this "source" isn't someone I'd trust to bring me a cup of
coffee. Read and believe at your own risk
<http://turnerradionetwork.com/index.php?option=com_content&view=article&id=59:employees-of-japan-finance-ministry-arrested-in-italy-trying-tosmuggle-134-billion-in-us-treasuries-in-suitcases&catid=1:latest-news&Itemid=50>:

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

And attached to this post are a few pictures and a Youtube link, all but
one of which I've seen before. The close-up I have not, but
unfortunately the detail is insufficient for me to do anything more than
observe that it looks rather odd compared to what I've seen as
specimens, and does *NOT* match the apparent paper on the table
picture. Heh, whatever. IMHO Turner has nothing and may have been fed
a bunch of garbage (which he immediate regurgitated); certainly his
"pictures" and "video" are NOT a scoop.

It gets even more strange (back from the tin brigade - I think?) - this
time with a claim that the mafia (yes, the *real* one over in Sicily) is
involved
<http://www.ft.com/cms/s/0/82091ec2-5c2f-11de-aea3-00144feabdc0.html>,
and the bonds are fake:

Whether 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.

....

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.

What?

So let's see if we can try to sort out what we're "learning":

*
The bonds are declared fake by the Treasury, stating that there's
only $100 million outstanding and obviously $134 billion have to
be fake.
*
Italy claims to have seized $800 million in *real* US Bonds in the
last year.
*
The last legitimate issue of paper US Treasuries (that is publicly
admitted to) was in the early 1980s when bearer instruments were
outlawed. All are now stated to be electronic (just a serial
number and amount.)
*
The two gentlemen are allegedly Japanese, and there are various
stories about who they really are - from notorious counterfeiters
who have served hard time for previous offenses to
Japanese finance officials. /Most notably, there has been no
public statement from Italy about these gentlemen's actual
identities./
*
It appears from all reports that these two were detained but not
arrested, with some reports that they were not only released /but
took the allegedly-fake instruments with them, even though Italian
law precludes both your release _and_ return of your fake
instruments if you are caught with fake securities or currency. /

This is stuff out of a Tom Clancy novel, and the longer it goes on and
the more twisted the "explanations", the less sense it makes.

I find it incomprehensible that the Italian government released these
two if they were actually caught in a massive counterfeiting operation
with $134 billion in fake US Securities.

I find it equally incomprehensible that there was not an *immediate*
indictment out of a US Prosecutor coming from such an event and a demand
for extradition back to the United States.

And further, I find it equally incomprehensible that if the securities
are in fact *real*, and Treasury is lying, that Italy would not impose
the fine.

Only the latter scenario, however, covers what apparently *has happened*
- the two "couriers", whoever they are, have been released and,
according to some accounts, *they took the allegedly "fake" instruments
with them,* and there has been *no US indictment issued for
counterfeiting the instruments.*

Uh, can we have some truth here folks, because none of what is being
reported adds up and my BS detector is ringing off the hook.

[BHP Tinto]

Comment by

Paolo from Italy on 20 June 2009:

About the US bonds in Italy.

The big question, still, is what the apparent forgeries hoped to do with the paper.

Nothing, there isn't anything you can do with 249 bonds worth 500 million dollars each one and others worth 1 billion each one.
No one and NO BANK would take them without checking whether they're true.
This is the reason they're real bonds.
No one has ANY INTEREST to forge bonds of those amounts.
They're not fake. They're bonds given to foreign central banks only.

And Reuters says the were made by mafia for opening credit lines with Swiss banks !!! UTTERLY LUDICROUS

[callmejoe]

Of course they're real.

They let the couriers go with the goods. And no confiscation which probably means Uncle Sam must have had a word in Silvio's ear....

Italy will get a big kickback from this, one way or the other.

[notanewmeber]

These enormous sums suggest a nation-state’s involvement.

World War II witnessed such governmental shenanigans. The Academy Award-winning 2007 film "The Counterfeiters" tells the true story of Operation Bernhard, the Nazi scheme that forced Jewish graphic artists and printers to produce fake, yet undetectable, British pounds. While Hitler hoped to hammer the British money supply just as he bombed its territory, the ersatz pounds never achieved widespread circulation.

Treasury’s declaration that those briefcase bonds were artificial reassured those who feared that a legitimate nation (e.g. Japan or China) may have tried to unload a Matterhorn of dollars in Switzerland, perhaps to purchase gold and hedge against a coming inflationary tsunami.

http://www.timesherald.com/articles/2009/0...d7378059643.txt

[sid]

story makes it main stream with some very intersting comments

Is this the death of the dollar?

After two smugglers were stopped last week with what at first appeared to be $134bn in US state bonds, the tension and paranoia surrounding the fate of the dollar hit a new high
By Edmund Conway
Published: 7:32PM BST 20 Jun 2009

Border guards in Chiasso see plenty of smugglers and plenty of false-bottomed suitcases, but no one in the town, which straddles the Italian-Swiss frontier, had ever seen anything like this. Trussed up in front of the police in the train station were two Japanese men, and beside them a suitcase with a booty unlike any other. Concealed at the bottom of the bag were some rather incredible sheets of paper. The documents were apparently dollar-denominated US government bonds with a face value of a staggering $134bn (£81bn).

How on earth did these two men, who at first refused to identify themselves, come to be there, trying to ride the train into Switzerland carrying bonds worth more than the gross domestic product of Singapore? If the bonds were genuine, the pair would have been America's fourth-biggest creditor, ahead of the UK and just behind Russia. No sooner had the story leaked out from the Italian lakes region last week than it sparked a panoply of conspiracy tales. But one resounded more than any other: that the men were agents of the Japanese finance ministry, in the country for the G8 meeting, making a surreptitious journey into Switzerland to sell off one small chunk of the massive mountain of US bonds stacked up in the Japanese Treasury vaults.

full article

http://www.telegraph.co.uk/finance/economi...the-dollar.html

[nicejim]

How on earth did these two men, who at first refused to identify themselves...

I can't imagine that refusing to identify yourself when crossing borders is a sensible strategy. Wouldn't they need to be carrying passports?



Even a $1million note is not accepted on "face value"...
http://www.nbcaugusta.com/news/local/11852036.html