20-06-2009, 04:43 PM
(This post was last modified: 20-06-2009, 07:53 PM by Peter Lemkin.)
I can't believe there are STILL no real developments one can believe. They HAVE to be real. If they were counterfeit, they would have been definitively denounced and those transporting them arrested. The fact the G8 were meeting in Switzerland then and the Japanese FM the day after this broke said he had full faith in T Bonds is weird. There are also reports [semi-official] that don't match on the details - what few there are.....it smells of Deep Deep Poo! No one would 'buy' this stuff if it were a movie....or cheap novel, but it is 'real'. Could it have been to threaten confidence in and stop market in all US Bonds? At first they were said to be Fed Bonds - which are not supposed to exist. Days later they were T Bonds. No one has mentioned anything about the many bank documents that are said to authenticate them. They must have details, dates, names, serial numbers and more...so why the delay, hemming and equivocation, no comments, etc.?! Nothing fits - as in all deep political ops. :damnmate:
And as if all that wasn't strange enough, it turns out a little known reporting/intelligence group in the Vatican that reports mainly (ans some say also spies) on China scooped this story[and may be involved!?].....Calvi lives!?
Involved soverigns (maybe):
Japan
U.S.
Italy
Vatican
Switzerland
Unknown others....
Pass the tea, said Alice.....
How the Bearer Bonds Saga Could Bring Down the US
Contrarian Profits
Thu, 18 Jun 2009 03:40 UTC
Today's Notes reads more like a John le Carre novel than an investment newsletter. But bear with us. It tracks one of the most fascinating news stories you've never heard of. The news reports are maddeningly sketchy. And the mainstream media is doing a damn good job of not reporting the story.
But it's clear the arrests by Italian authorities of two "Japanese-looking" men allegedly attempting to smuggle $134.5 billion worth of US bearer bonds across the Swiss border is the biggest financial crime in history. And one with major implications for America's economic security.
For those of you who don't know, a report surfaced on Monday, June 8, on an obscure Vatican-sponsored news website, AsiaNews.it, that Italy's financial police (Guardia Italiana di Finanza) had "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."
According to the report, these securities included "249 US Federal Reserve bonds worth $500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar [sic] each."
If the report is true (it has been relayed by the Associated Press, Bloomberg, The Times and the Dow Jones news service), it means these two as-yet-to-be-identified men were carrying securities amounting to the GDP of New Zealand - or enough money to fund three Beijing Olympics - in non-negotiable bonds in their suitcase.
As Bloomberg put it, "If economies were for sale, the men could buy Slovakia and Croatia and have plenty left over for Mongolia or Cambodia."
The story is filled with bizarre and incongruous details. Enough, in fact, to make the mind of even the most determined news hound spin.
First, there's the obvious question of whether these billion and half-billion dollar notes are real or fake. According to the AsiaNews report, "Italian authorities have not yet determined whether they are real or fake but [...] 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."
The story has received a lot of coverage in Europe and Asia. But US media outlets have ignored it, despite the fact that it concerns either the biggest ever counterfeiting or the biggest ever smuggling of US bonds. (A third possibility is that the story itself is a fake. Even so, this would merit serious attention as it implies that someone or some state or state agency is interested in destabilizing the value of US debt at a time when it's most sensitive to destabilization, i.e., when America is issuing most of it.)
The story broke smack in the middle of heightened concerns over the stability of US bonds markets. Treasury Secretary Tim Geithner has just completed a trip to China, where he did his best to assuage Chinese fears that US fiscal and monetary policy is undermining the value of US government and agency debt. And the BRIC nations - Brazil, Russia, India and China - have recently stirred the pot by calling for a less dollar-centric global currency system.And following the report of the bond arrests, Japan - the second largest foreign holder of US debt after China - felt it necessary to come out with the following statement via its finance minister: "We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental. So our trust in U.S. Treasuries is absolutely unshakable." (As Karl Denninger points out on his blog, The Market Ticker, the Japanese said in December 1941 that all was well, too.)
According the Dow Jones Business News, "An official at Japan's Consulate General in Milan said Tuesday that Italy was still investigating the case, adding it wasn't confirmed that the two men are Japanese."So are the alleged smugglers/counterfeiters Japanese or aren't they? And if they aren't, why did the press reports say they were? According to Dow Jones, the Japanese have "sent a letter asking for further information to the Italian tax police as well as prosecutors." But why the delay?
A breaking report from Joe Weisenthal at The Business Insider, snatched from Japanese TV, says the "Japanese" bond smugglers are now missing. If this was a simple case of counterfeiting (albeit the biggest in history), it's highly unlikely the Italian and US authorities would have let the men carrying the bonds simply slip off into the night...
The amount seized should ring alarm bells. On March 30 2009, the Treasury Department announced that $134.5 billion remained in the TARP. The stated amount of seized bearer bonds was $134.5 billion.
According to JS Kim of investment research company SmartKnowledgeU, "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?
The bearer bonds were discovered in a hidden briefcase compartment after a customs inspection. As Kim also points out, "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."
Here at Notes we have two theories about the bond arrests, presuming the story is legit. (That is to say presuming the reporting on the story is legit. More on this later.) Both have serious implications for the US economy and all who depend on it for their livelihoods.
The first possibility, as we see it, is that the events in Italy are evidence of sophisticated economic espionage and an attempt by a (hostile) foreign power to undermine US economic power.
In other words, somebody wants to destabilize the US bond markets by spreading the word that US bonds can be forged, but that "the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones " (as the original report put it). Raising legitimate concerns about the ability to withstand counterfeiting efforts is a sure-fire way of sabotaging a currency.
It wouldn't be the first time that such a strategy has been used to destabilize an enemy power. During World War II, Hitler launched Operation Bernhard to crash the British war economy. By the end of the war, it had produced 132 million expertly counterfeited British pounds - a sum that represented about 15% of all British pounds in circulation at the time. The British ran a similar counterfeiting operation against the Nazis.
It seems careless, to say the least, to get caught with $134.5 billion dollars worth of securities by a regular inspection on a train. We've already ruled out that this wasn't an official state operation (otherwise the bonds would have traveled in a diplomatic pouch). So it's certainly odd that people sophisticated enough counterfeit or steal $134.5 billion worth of US government bonds couldn't think of a safer way to transport them.
The implication is the "Japanese" interlopers wanted to be caught. And they wanted the world to know that US bonds could be so expertly forged.
Who would want to destabilize US economic power? Who would have the technology and the know-how to print such convincing forgeries? Who is a declared enemy of the US? Who might have "Japanese" looking agents working for them? North Korea would have to top the list of suspects...
Also, there's the question of why the Italian authorities didn't allow the "Japanese" couriers to deliver their illicit cargo to its destination (and therefore also apprehend the intended recipient/s of the bonds). Surely, that would have been of interest to the Italian authorities, who seem to have been acting on a tip-off. (Unless you believe that the Italians are in the habit of searching false-bottomed suitcases of well-dressed Asians on their way to Switzerland.)
One explanation for this is that the Italians believe these bonds are real. Italian law prevents people importing or exporting more than €10,000 in cash. And the penalty for violating the law is 40% of the money seized. That would mean the jackpot of the Italian government - the fine for this particular haul would be €38 billion. This would go a long way to eliminate the country's public debt.
This brings us to our second theory. If the bonds turn out be real, it points to the possibility that the US Treasury may have been secretly issuing bonds to foreign nations to finance America's deficits. This has worse implications than the sabotage theory. Let us explain...
The bonds the Italian authorities seized earlier this month were bearer bonds. That means they are unregistered - whoever holds the physical piece of paper owns the instrument.
This is where the plot really thickens. Since the passing of the US Tax and Fiscal Responsibility Act in 1982, the US doesn't officially issue this kind of bond anymore. And according to the Treasury's own figures, the approximate amount of debt outstanding in bearer bonds as of May 2009 is just over $100 billion - roughly $34 billion less than the amount wound up in a false-bottomed suitcase on a train from Milan to Switzerland.
It seems the only way the bonds could be real is if the Treasury has been issuing bonds it doesn't want anyone to know about.
According to underground investor Karl Denninger at The Market Ticker, this is "one of the few explanations that actually fits the facts." And Denninger goes a step further. He writes:
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.
This wouldn't surprise us in the least. Right now the US government is on a $12.8 trillion spending spree. As we've said before, it's now the biggest player in the US economy. And it's destined to be this way for a long time to come.
Put simply, the government money, and a handful of chosen stock shoot up. (To find out which stocks are benefiting from this unprecedented spending splurge, read on here. )
This story has more holes than a Swiss cheese. We know from experience here at Notes (your co-editor spent two years working as an investigative reporter in his native Ireland) that there is rarely smoke without fire when it comes to news stories. But one aspect of this story still puzzles us... and it's a part of the story nobody to date has questioned: What was an obscure Vatican-sponsored news outfit doing breaking the largest financial crime story all time?
As far as we can tell, AsiaNews.it broke the story on June 8. Major news services followed on with their own reports much later. Bloomberg, for instance, only got to it yesterday. So how did AsiaNews.it, a website linked to the Ponticial Institute for Foreign Missions and funded by the Vatican scoop the major news agencies on the bond story?
AsiaNews.it's About Us page freely admits that it is an anti-Communist organ of the Roman Catholic Church, "nobly dedicated to China and her people." The organization's missionary zeal is not difficult to detect:
Since [Chinese] university students have internet access, we think that AsiaNews will help them to be familiar with the impact Christianity has on Asian and Chinese society. Already many Chinese intellectuals think China can be saved by Christianity, so as not to explode into a soulless market or a dictatorship that humiliates the individual.Whatever the truth behind the bearer bond arrests , we know it doesn't bode well for America's economic future. At best, it demonstrates that the US faces economic sabotage from an (as yet) unknown source. At worst, it's evidence of underhand behaviour by US authorities to finance the country's spiraling debt problem.
Even if the case can be put down to (a highly incompetent) nation trying to offload its dollar holdings, it underscores our argument here at Notes that investors need to closely watch US debt markets to determine the future of their investments.
This year, it's estimated that the US Treasury Department must raise $15 billion a day in debt just to keep the country afloat and Team Obama in pocket. It's our view that this is America's Achilles' heel.
The US economy has already been brought to its knees by too much private debt. We believe its public debt problem could one day deal the country a deathblow.
http://www.contrarianprofits.com/article...e-us/18081
And as if all that wasn't strange enough, it turns out a little known reporting/intelligence group in the Vatican that reports mainly (ans some say also spies) on China scooped this story[and may be involved!?].....Calvi lives!?
Involved soverigns (maybe):
Japan
U.S.
Italy
Vatican
Switzerland
Unknown others....
Pass the tea, said Alice.....
How the Bearer Bonds Saga Could Bring Down the US
Contrarian Profits
Thu, 18 Jun 2009 03:40 UTC
Today's Notes reads more like a John le Carre novel than an investment newsletter. But bear with us. It tracks one of the most fascinating news stories you've never heard of. The news reports are maddeningly sketchy. And the mainstream media is doing a damn good job of not reporting the story.
But it's clear the arrests by Italian authorities of two "Japanese-looking" men allegedly attempting to smuggle $134.5 billion worth of US bearer bonds across the Swiss border is the biggest financial crime in history. And one with major implications for America's economic security.
For those of you who don't know, a report surfaced on Monday, June 8, on an obscure Vatican-sponsored news website, AsiaNews.it, that Italy's financial police (Guardia Italiana di Finanza) had "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."
According to the report, these securities included "249 US Federal Reserve bonds worth $500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar [sic] each."
If the report is true (it has been relayed by the Associated Press, Bloomberg, The Times and the Dow Jones news service), it means these two as-yet-to-be-identified men were carrying securities amounting to the GDP of New Zealand - or enough money to fund three Beijing Olympics - in non-negotiable bonds in their suitcase.
As Bloomberg put it, "If economies were for sale, the men could buy Slovakia and Croatia and have plenty left over for Mongolia or Cambodia."
The story is filled with bizarre and incongruous details. Enough, in fact, to make the mind of even the most determined news hound spin.
First, there's the obvious question of whether these billion and half-billion dollar notes are real or fake. According to the AsiaNews report, "Italian authorities have not yet determined whether they are real or fake but [...] 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."
The story has received a lot of coverage in Europe and Asia. But US media outlets have ignored it, despite the fact that it concerns either the biggest ever counterfeiting or the biggest ever smuggling of US bonds. (A third possibility is that the story itself is a fake. Even so, this would merit serious attention as it implies that someone or some state or state agency is interested in destabilizing the value of US debt at a time when it's most sensitive to destabilization, i.e., when America is issuing most of it.)
The story broke smack in the middle of heightened concerns over the stability of US bonds markets. Treasury Secretary Tim Geithner has just completed a trip to China, where he did his best to assuage Chinese fears that US fiscal and monetary policy is undermining the value of US government and agency debt. And the BRIC nations - Brazil, Russia, India and China - have recently stirred the pot by calling for a less dollar-centric global currency system.And following the report of the bond arrests, Japan - the second largest foreign holder of US debt after China - felt it necessary to come out with the following statement via its finance minister: "We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental. So our trust in U.S. Treasuries is absolutely unshakable." (As Karl Denninger points out on his blog, The Market Ticker, the Japanese said in December 1941 that all was well, too.)
According the Dow Jones Business News, "An official at Japan's Consulate General in Milan said Tuesday that Italy was still investigating the case, adding it wasn't confirmed that the two men are Japanese."So are the alleged smugglers/counterfeiters Japanese or aren't they? And if they aren't, why did the press reports say they were? According to Dow Jones, the Japanese have "sent a letter asking for further information to the Italian tax police as well as prosecutors." But why the delay?
A breaking report from Joe Weisenthal at The Business Insider, snatched from Japanese TV, says the "Japanese" bond smugglers are now missing. If this was a simple case of counterfeiting (albeit the biggest in history), it's highly unlikely the Italian and US authorities would have let the men carrying the bonds simply slip off into the night...
The amount seized should ring alarm bells. On March 30 2009, the Treasury Department announced that $134.5 billion remained in the TARP. The stated amount of seized bearer bonds was $134.5 billion.
According to JS Kim of investment research company SmartKnowledgeU, "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?
The bearer bonds were discovered in a hidden briefcase compartment after a customs inspection. As Kim also points out, "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."
Here at Notes we have two theories about the bond arrests, presuming the story is legit. (That is to say presuming the reporting on the story is legit. More on this later.) Both have serious implications for the US economy and all who depend on it for their livelihoods.
The first possibility, as we see it, is that the events in Italy are evidence of sophisticated economic espionage and an attempt by a (hostile) foreign power to undermine US economic power.
In other words, somebody wants to destabilize the US bond markets by spreading the word that US bonds can be forged, but that "the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones " (as the original report put it). Raising legitimate concerns about the ability to withstand counterfeiting efforts is a sure-fire way of sabotaging a currency.
It wouldn't be the first time that such a strategy has been used to destabilize an enemy power. During World War II, Hitler launched Operation Bernhard to crash the British war economy. By the end of the war, it had produced 132 million expertly counterfeited British pounds - a sum that represented about 15% of all British pounds in circulation at the time. The British ran a similar counterfeiting operation against the Nazis.
It seems careless, to say the least, to get caught with $134.5 billion dollars worth of securities by a regular inspection on a train. We've already ruled out that this wasn't an official state operation (otherwise the bonds would have traveled in a diplomatic pouch). So it's certainly odd that people sophisticated enough counterfeit or steal $134.5 billion worth of US government bonds couldn't think of a safer way to transport them.
The implication is the "Japanese" interlopers wanted to be caught. And they wanted the world to know that US bonds could be so expertly forged.
Who would want to destabilize US economic power? Who would have the technology and the know-how to print such convincing forgeries? Who is a declared enemy of the US? Who might have "Japanese" looking agents working for them? North Korea would have to top the list of suspects...
Also, there's the question of why the Italian authorities didn't allow the "Japanese" couriers to deliver their illicit cargo to its destination (and therefore also apprehend the intended recipient/s of the bonds). Surely, that would have been of interest to the Italian authorities, who seem to have been acting on a tip-off. (Unless you believe that the Italians are in the habit of searching false-bottomed suitcases of well-dressed Asians on their way to Switzerland.)
One explanation for this is that the Italians believe these bonds are real. Italian law prevents people importing or exporting more than €10,000 in cash. And the penalty for violating the law is 40% of the money seized. That would mean the jackpot of the Italian government - the fine for this particular haul would be €38 billion. This would go a long way to eliminate the country's public debt.
This brings us to our second theory. If the bonds turn out be real, it points to the possibility that the US Treasury may have been secretly issuing bonds to foreign nations to finance America's deficits. This has worse implications than the sabotage theory. Let us explain...
The bonds the Italian authorities seized earlier this month were bearer bonds. That means they are unregistered - whoever holds the physical piece of paper owns the instrument.
This is where the plot really thickens. Since the passing of the US Tax and Fiscal Responsibility Act in 1982, the US doesn't officially issue this kind of bond anymore. And according to the Treasury's own figures, the approximate amount of debt outstanding in bearer bonds as of May 2009 is just over $100 billion - roughly $34 billion less than the amount wound up in a false-bottomed suitcase on a train from Milan to Switzerland.
It seems the only way the bonds could be real is if the Treasury has been issuing bonds it doesn't want anyone to know about.
According to underground investor Karl Denninger at The Market Ticker, this is "one of the few explanations that actually fits the facts." And Denninger goes a step further. He writes:
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.
This wouldn't surprise us in the least. Right now the US government is on a $12.8 trillion spending spree. As we've said before, it's now the biggest player in the US economy. And it's destined to be this way for a long time to come.
Put simply, the government money, and a handful of chosen stock shoot up. (To find out which stocks are benefiting from this unprecedented spending splurge, read on here. )
This story has more holes than a Swiss cheese. We know from experience here at Notes (your co-editor spent two years working as an investigative reporter in his native Ireland) that there is rarely smoke without fire when it comes to news stories. But one aspect of this story still puzzles us... and it's a part of the story nobody to date has questioned: What was an obscure Vatican-sponsored news outfit doing breaking the largest financial crime story all time?
As far as we can tell, AsiaNews.it broke the story on June 8. Major news services followed on with their own reports much later. Bloomberg, for instance, only got to it yesterday. So how did AsiaNews.it, a website linked to the Ponticial Institute for Foreign Missions and funded by the Vatican scoop the major news agencies on the bond story?
AsiaNews.it's About Us page freely admits that it is an anti-Communist organ of the Roman Catholic Church, "nobly dedicated to China and her people." The organization's missionary zeal is not difficult to detect:
Since [Chinese] university students have internet access, we think that AsiaNews will help them to be familiar with the impact Christianity has on Asian and Chinese society. Already many Chinese intellectuals think China can be saved by Christianity, so as not to explode into a soulless market or a dictatorship that humiliates the individual.Whatever the truth behind the bearer bond arrests , we know it doesn't bode well for America's economic future. At best, it demonstrates that the US faces economic sabotage from an (as yet) unknown source. At worst, it's evidence of underhand behaviour by US authorities to finance the country's spiraling debt problem.
Even if the case can be put down to (a highly incompetent) nation trying to offload its dollar holdings, it underscores our argument here at Notes that investors need to closely watch US debt markets to determine the future of their investments.
This year, it's estimated that the US Treasury Department must raise $15 billion a day in debt just to keep the country afloat and Team Obama in pocket. It's our view that this is America's Achilles' heel.
The US economy has already been brought to its knees by too much private debt. We believe its public debt problem could one day deal the country a deathblow.
http://www.contrarianprofits.com/article...e-us/18081
"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
"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