Billions in US bonds seized in smuggling operation
posted at 10:49 am on June 12, 2009 by Ed Morrissey
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For those who love a mystery, this story has more than one. Italian authorities seized more than $130 billion in bonds from two Japanese nationals as they presumably prepared to cross the border into Switzerland. No one can tell at the moment whether the bonds are genuine or counterfeit:
Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.
Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.
What caught the policemen’s attention were the billion dollar securities. Such a large denomination is not available in regular financial and banking markets. Only states handle such amounts of money.
First mystery: why has this gone almost completely unnoticed this week? Asia Times reported it first, and it was confirmed by the Italian news agency Adnkronos and Business Insider, the only American media outlet to take an interest so far. Adnkronos doesn’t include the story in its English-language service, however; I had to Babelfish the webpage to be sure it confirmed Asia Times. Wouldn’t the discovery of $134.5 billion in American bonds in a false bottom of a suitcase smuggled through Italy into Switzerland seem a bit newsworthy in the US?
Second mystery: Are the bonds real? If so, how did the two Japanese travelers get their hands on so much convertible cash? As the Asia Times report mentions, the denominations involved are usually used in state-to-state transactions. They would have had to steal them from a government — or perhaps a government gave them the bonds to convert in secret, covered by the Swiss insistence on secrecy in banking.
Third mystery: If the bonds are counterfeits, then how many more high-quality counterfeit US bonds are floating around Asia and Europe? Who is funding their creation, and why? Counterfeits on this scale would affect bond prices and weaken the dollar. North Korea has attempted low-rent counterfeiting of $100 bills, which the UN helped hide for a while, but this seems beyond their capabilities — and potentially a lot more destructive to the US. It would take quite a bit of support to counterfeit state-to-state bonds, almost certainly requiring some governmental involvement.
Hopefully, the press follows up on this case. I love a good mystery, but this one needs to get solved ASAP.
Update: Examiner blogger Craig Meister wonders whether the Japanese wanted to start dumping the dollar.
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The bonds actually issued by the government are barely real.
lorien1973 on June 12, 2009 at 10:52 AM
All of the ones printed after January 19th of this year.
Tommy_G on June 12, 2009 at 10:52 AM
Seriously, it’d be better if they ARE counterfeit.
Then again who can tell? It’s all Monopoly money at this point.
wildcat84 on June 12, 2009 at 10:52 AM
Some say it’s the Japanese that’s trying to get out of the dollar , before it crashes.
the_nile on June 12, 2009 at 10:54 AM
I’m not sure whether to laugh, or go buy gold and ammo.
forest on June 12, 2009 at 10:55 AM
guess we know where some of the TARP money went
offroadaz on June 12, 2009 at 10:55 AM
Stimulating!
“Just throw another $145 billion on the pile. At this point, who cares?”
Fallen Sparrow on June 12, 2009 at 10:56 AM
I wonder how much of Counterfeiting our money and bonds and whatever else by NoKo, Hezzbollah/Iran and others has hurt the Economy and flirted with inflation?
jp on June 12, 2009 at 10:56 AM
They are just ahead of the game. Those are what we will all be carrying instead of $20’s by next year.
Ferris on June 12, 2009 at 10:57 AM
Did they have a lot of tatoos?
Caiwyn on June 12, 2009 at 10:57 AM
I mean tattoos. I can’t spell today.
Caiwyn on June 12, 2009 at 10:58 AM
Ed, I really do hope that you haven’t spent too much time wondering why the US media isn’t reporting a story that is lacking in slacious details, celebrities, Mrs. Obama’s outfit, date night details or Sarah Palin.
myrenovations on June 12, 2009 at 10:58 AM
from the examiner.com
“Yet, this story … is also about the United States, and the fact that sovereign governments may be trying to dump US treasuries on the black market for fear that they soon will be worth very little.”
http://www.examiner.com/x-2888-World-News-Examiner~y2009m6d12-134-billion-in-US-bonds-found-in-Italy
dtestard on June 12, 2009 at 10:58 AM
Eh, what’s a billion? I spent that on lunch the other day.
(What we’ll be saying in 3 to 5 years)
Youngs98 on June 12, 2009 at 10:59 AM
Bilderbergers?
Soros?
Saudis?
Chinese?
SouthernGent on June 12, 2009 at 10:59 AM
Did the Japanese create or save these $130 billion in bonds?
ornery_independent on June 12, 2009 at 11:00 AM
A billion here, a billion there. Pretty soon, you’re talking real money.
/Dirksen
Fallen Sparrow on June 12, 2009 at 11:01 AM
The Obamanation is no doubt set to fire anyone looking into this matter.
Grafted on June 12, 2009 at 11:02 AM
Did these Japanese Nationalist not get the memo on Capping Executive Pay????
Getting the bonds to a Swiss Account??? Maybe someone in the Administration moving a retirement fund into a Swiss Account?
the Coondawg on June 12, 2009 at 11:02 AM
I would bet that if the “forged” bonds were sold on E-Bay, they would garner more worth then the real ones.
right2bright on June 12, 2009 at 11:03 AM
Rumor has it that the two Japanese nationals were merely smuggling pocket change found in White House couch cushions. You know…a quarter here, 138 billion in US bonds there…pretty soon you’re talking real money.
Flyover Country on June 12, 2009 at 11:03 AM
They must have been Japanese Jooooooooooooooz!
Those Rothchilds are everywhere.
Mr. Joe on June 12, 2009 at 11:03 AM
Bonds. Fake Bonds.
I’m sure SPECTRE is involved.
faraway on June 12, 2009 at 11:04 AM
We will never know. But good news — finding these bonds saved or created 172,500 more jobs!
Ferris on June 12, 2009 at 11:04 AM
It’s stories like these that preface how world wars began in history books.
Youngs98 on June 12, 2009 at 11:05 AM
Traveling checks , Bank of American Excess.
the_nile on June 12, 2009 at 11:05 AM
They said on the news here that if they are real, the Japanese dudes will owe $40 Billion in taxes. That is the ~amount of the last two stimulus packages in Italy.
Needless to say, I think Berlusconi is praying these puppies are real.
sarainitaly on June 12, 2009 at 11:06 AM
To borrow a line from Limbaugh, Obama is beating them to it.
shick on June 12, 2009 at 11:06 AM
This is good news. It means our bonds still must be worth something.
ILB on June 12, 2009 at 11:07 AM
I’m inclined to believe this.
Many economists have been warning of the hyperinflation of the dollar. Of note the Chinese have been using dollars to buy hard assets around the world, no doubt other nations holding large dollar reserves are looking to dump or at least diversify their holdings.
Rebar on June 12, 2009 at 11:08 AM
Aren’t U.S. bonds sort of like Confederate money now?
ExcessivelyDiverted on June 12, 2009 at 11:08 AM
I’d prefer that option but if this is so then why did the authorities have a problem with it and confiscate it?
shick on June 12, 2009 at 11:11 AM
The whole damn world, except U.S. voters, knows what’s happening to the U.S. dollar.
I wouldn’t even be surprised if some Obama czar handed these guys all these bonds, and that they’re handing them out like candy to anyone who will take them, for the purpose of hastening the crash of the U.S. dollar. I don’t know why Obama and his people want to crash the U.S. dollar, but it’s apparent at this point that they do. Everything they’ve done results in devaluing the dollar, so it has to be a major goal of theirs.
aero on June 12, 2009 at 11:12 AM
Who would want to buy them?
It would be like buying the most expensive smoke.
shick on June 12, 2009 at 11:13 AM
Is it Democrat fundraising season again, already?
RBMN on June 12, 2009 at 11:14 AM
In four years they will have the same intrinsic value.
jukin on June 12, 2009 at 11:15 AM
We need a bond czar.
lorien1973 on June 12, 2009 at 11:15 AM
I believe historically, the devaluization of a nations currency has often taken place before radical new government is put in place.
shick on June 12, 2009 at 11:16 AM
Buy both, in proportional amounts. You will need the gold, as that is the only thing that is going to hold it’s value.
The ammo you will need to protect your gold.
“Just the facts, ma’am.”
Yoop on June 12, 2009 at 11:17 AM
Follow the money.
There’s your first clue.
Daggett on June 12, 2009 at 11:17 AM
Doesn’t matter if they are real or fake. Dear Leader will just seize them and add them to the TARP funds. Hey ACORN, you’ve just inherited another $130 billion!
rbj on June 12, 2009 at 11:21 AM
Meanwhile, another reporter describes the recession as awesome, just awesome.
lorien1973 on June 12, 2009 at 11:22 AM
“Real or counterfeit? And which is worse?”
I dont often come to this site looking for a laugh. But Ed, that was damm funny….
Avatar72 on June 12, 2009 at 11:22 AM
Were these guys wearing “Full Tilt Poker” T-shirts?
faraway on June 12, 2009 at 11:23 AM
You left out the obvious, Obama himself.
Tommy_G on June 12, 2009 at 11:24 AM
So THAT’s where all those anonymous foreign donations to Obama’s campaign came from!
/smacks head…
ornery_independent on June 12, 2009 at 11:24 AM
That’s funny, I was wondering if it mattered to. You said it better. As usual.
Cindy Munford on June 12, 2009 at 11:28 AM
I never heard of Federal Reserve Bonds.
I never heard of Kennedy Bonds.
I would bet $5 this has something to do with N. Korea.
I would bet $5 these “Japanese” aren’t kosher.
JiangxiDad on June 12, 2009 at 11:30 AM
Very depressing.
Cindy Munford on June 12, 2009 at 11:30 AM
What is sad is that $134.5 Billion doesn’t even have the huge wallop that it should anymore. All this talk about trillions has made a billion dollars seem normal. Thank Porkulus and the rest of the massive deficit spending for readjusting the bar of perception.
Ferris on June 12, 2009 at 11:30 AM
I’ve got all my money tied up in ammo. When Obama’s economy tanks, ammo will be coin of the realm.
GarandFan on June 12, 2009 at 11:31 AM
They could have hired me for 1% to buy an oversized book and to put the bonds between the pages. Having a false bottom briefcase/luggage is a bullseye equivalent of saying “I’m too stupid to smuggle”
CMonster on June 12, 2009 at 11:31 AM
This is extremely scary in terms of potential inflation (hyper-inflation maybe?) If these are real and are traced back to Japanese govt, the question is why do they feel the need to surreptitiously dump $134 Bn? And what do they know that we don’t that makes them want to take this action?
Jper on June 12, 2009 at 11:32 AM
Maybe it was in regard to some poor Nigerian widow with 10 children who inherited the money but needed a helpful civilian’s help in getting it to her so that her kids could eat tonight.
JiangxiDad on June 12, 2009 at 11:34 AM
Heh. That was good!
hawksruleva on June 12, 2009 at 11:35 AM
I’m stunned that the most obvious question was omitted; for whom were these two guys working? The Chinese?
Tommy_G beat me to it.
Think Robert Mugabe for President of the United States.
Skandia Recluse on June 12, 2009 at 11:42 AM
Not that it matters but I think they are real. If they were counterfeit there would be no rush to get them in a Swiss bank account. If they were counterfeit they would be slowly deposited so as to not cause any alarm. Also some of it (I think 50 to 100 million)is mine because I keep getting overseas e-mails asking for my saving & checking account numbers so it can be deposited in my account. Wish I had a savings or checking account.
fourdeucer on June 12, 2009 at 11:45 AM
This amount could be about the combined yearly wages of the population of a state or large metropolis. Wall Street Journal and the rest of msm not interested.
Buddahpundit on June 12, 2009 at 11:46 AM
Hey, the financial guru Dave Ramsey says to not buy gold. Of course, he’s saying to invest in the stock market, too.
Right. Sure. You betcha.
MBuck on June 12, 2009 at 11:50 AM
These bonds represent more than the GDP of most countries of the world.
The only non state who could play on this level in cash, is the IMF, World Bank, and some Saudi type Oil folks.
Hard to beleive these are forgeries, as there are DIFFERENT bond types involved…. why go to the trouble of forging different types if you can forge ONE type really well… trying to forge different types means more opportunities to make a mistake and get caught…
Romeo13 on June 12, 2009 at 11:55 AM
Despite spot gold dropping some this week, premiums on bullion are still steady.
The fear I have is confiscation which has happened before and which this administration seems all too willing to entertain. I suspect the confiscation this week of legal online poker money as perhaps a trial balloon.
Beto Ochoa on June 12, 2009 at 11:58 AM
This story appeared last night on an insane ufo/conspiracy news site; they were also wondering why the media did not pick up on the story.
The bottom line? The only countries that supposedly have that much in US bonds are China and Russia.
There was also speculation if they are fake, they’re from North Korea.
shibumi on June 12, 2009 at 11:59 AM
Ed, I wouldn’t give the NK’s a pass on this one.
They do excellent engraving, the best the Secret Service has ever seen, by some accounts. And making fake bonds? Access to the proper ink, not that hard to do, and being able to replicate the paper, to include watermarks, also not all that difficult if you have the funds and the desire.
As for the Japanese “businessmen” who were caught trying to go into Switzerland, remember that the Japanese “mob,” the Yakuza, is pretty much a Chosen Soren operation these days, and has been for decades…Chosen Soren, Koreans living in Japan who were forced to take Japanese names during the Japanese occupation of Korea for nearly half of the 20th century. Even with Japanese names, they were never accepted into regular Japanese society, hence the Yakuza is the most beneficial career path to follow…and North Korea has had a close relationship with the Chosen Soren since the establishment of North Korea.
So, it might be very logical for a Japanese or two to be a bag man for the North Koreans. Most people, here and in Europe, have no concept as to the difference between a proper Japanese and a “burakumin” Japanese.
coldwarrior on June 12, 2009 at 12:00 PM
First that, then this:
I’m getting recession depression. From the link:
Look at the bright side of homelessness and starvation!
Loxodonta on June 12, 2009 at 12:01 PM
The bottom line? The only countries that supposedly have that much in US bonds are China and Russia.
shibumi on June 12, 2009 at 11:59 AM
Isn’t there some mystery about the Fed “lending” $2 trillion dollars out to unnamed beneficiaries as well? The third entity that has that much in US bonds is the United States government.
aero on June 12, 2009 at 12:02 PM
Where can I get in on this racket?
Tim Burton on June 12, 2009 at 12:04 PM
Yeah, I actually tried that when my work dried up. I told myself this was an opportunity to start fresh. I had been burned out on my work for some time anyway, and I felt uplifted by the prospect of changing careers and exploring something new. But getting a job in my own field is near-impossible enough. Changing careers really is impossible in this economy. I have interviewed half a dozen times for all kinds of jobs, some exactly in my wheel-house and some laterally related to what I used to do. Every time, there has been someone who is even more perfectly qualified than I am who gets the job. The further I get from an exact match to my previous career, the less likely I am to even get an interview. This is not an opportunity to improve one’s prospects and career contentment. It’s a lesson in the reality of needing to do work, any work, to keep your family from being out on the street.
aero on June 12, 2009 at 12:07 PM
Given the future value of US Bonds, they were probably just brining their own toilet paper on vacation.
jdfister on June 12, 2009 at 12:08 PM
Obamas secret stash was intercepted. It was clearly the jews who did this.
/Neonazi Wright mode off.
sonofdy on June 12, 2009 at 12:09 PM
This happens while the US government is having a fire sale on 30-year bonds. (The article is fuzzy about that; you have to read the face and purchase values, but that’s what they are.)
If this is counterfeiting; it’s simultaneously the most elaborate and most idiotic counterfeiting scheme in history.
OF COURSE the US government is back-dooring these things, because they can’t afford to publically state the pennies-on-the-dollar prices they’re selling them for.
They already tried the public auction earlier this year. Does nobody remember that? Now they’re having an ongoing public auction, and at the same time they’re selling these to every other government in the world, and telling them each country that its deal is “exclusive.”
Somebody blew this on purpose – probably after they found out how badly they were getting scammed.
(BTW, can anybody find the maturation date on these things? That’s another hugely important detail left out of the article.)
logis on June 12, 2009 at 12:11 PM
$134billion.
That’s pocket change these days.
MarkTheGreat on June 12, 2009 at 12:15 PM
That’s my bet. That seems the most likely scenario, another government cashing in its dollars before the crash.
petefrt on June 12, 2009 at 12:15 PM
Because you have to declare large amounts of currency when moving it across borders. Mostly so the states involved can tax it.
MarkTheGreat on June 12, 2009 at 12:19 PM
How long before the Obama administration starts blaming counterfeit bonds for inflation????
RedSoxNation on June 12, 2009 at 12:20 PM
While you were creating or saving 150,000 more jobs
JIMV on June 12, 2009 at 12:23 PM
I looked at the supernote problem some time ago, and I can say that they are not low quality. NoKo bought the same machines we use to make the paper, embed the special fibers, and even bought the color changing ink with just a slight change and then did a remix on that. What was astonishing is that they are caught not because of their low quality, but because the engraving is far better than the US can do. That is the distinguishing characteristic of the supernotes – and a warning about the limits of our engraving technology… they bought duplicate machines, equipment and processes and then went further with them than we have.
NoKo has been doing the same with other currencies, it is the supernote that is cited for being such high quality as to be actually better than the original.
Now, as to these bonds being a problem… well… maybe its just a ’stimulus’ we haven’t heard about yet. A special one using Japanese couriers going to Swiss banks to drop them off in accounts. Just how much money has been wasted in TARP that no one can keep track of? Ditto the ‘bailouts’. And the ’stimulus’. Lots of money floating around out there, and just how hard would it be for someone to do a bit of on the sly conversion to bonds? Just who is minding the store at Treasury? Oh… Geithner… Mr. ‘I can’t figure out how to pay my taxes’.
It is probably just standard corruption, but the ChiTown Machine works in mysterious ways, getting inept and corrupt people into places of power with no oversight and lots of money.
ajacksonian on June 12, 2009 at 12:27 PM
It’s a riddle, wrapped in a mystery, and trapped inside of an enema.
Mike Honcho on June 12, 2009 at 12:29 PM
That sounds right to me too. Also this:
So, in my mind, I’m suspecting China/Russia.
petefrt on June 12, 2009 at 12:29 PM
That’s right. I’ve traveled abroad, I should have thought of that. Then again, I don’t have tons of money to regularly think about it.
shick on June 12, 2009 at 12:30 PM
Gee….I can’t imagine who would gain from this? Obama? His goons? Foreign countries? Anyone who had the ability to vote???
capejasmine on June 12, 2009 at 12:31 PM
How does an individual expect to cash a billion dollar bond?
AnotherOpinion on June 12, 2009 at 12:31 PM
I smell SOROS… but his puppet, BO will cover it up.
stenwin77 on June 12, 2009 at 12:32 PM
The Swiss have a wood shortage and just wanted something worthless to burn.
faol on June 12, 2009 at 12:39 PM
By the time obama gets done with us, those bonds will be better used as toilet paper.
BTW, just in case anyone is wondering, I have two cigarettes in each hand, while lighting a cigar, and I’m stuffing dip under my lip……And I don’t even smoke.
Thank you, obama. Thank you for saving me from myself!
HornetSting on June 12, 2009 at 12:41 PM
How does an individual expect to cash a billion dollar bond?
AnotherOpinion on June 12, 2009 at 12:31 PM
That’s why it’s probably isn’t an individual. And that makes it almost worse.
the_nile on June 12, 2009 at 12:44 PM
True, Soros is behind almost everything nowadays, and I expect he’s betting big against the dollar, but does he have access to that kind of money?
petefrt on June 12, 2009 at 12:46 PM
“….plus ten Kennedy bonds and other US government securities worth a billion dollar each.”
Kennedy bonds?? What’s next, the 1 TRILLION dollar Obama Bond?
Texican Ben on June 12, 2009 at 12:48 PM
Japanese, or NORK Japanese agents? I suspect the latter.
Limerick on June 12, 2009 at 12:50 PM
Who’s got access to a billion-dollar Kennedy bond from which to make a forgery? If you had one, which would have a legit serial, you’d more likely replace the genuine with the forgery. If you didn’t have one, your fake would be pretty easy to spot.
shuzilla on June 12, 2009 at 12:50 PM
Wait about six to twelve months, it will buy you a loaf of bread and a six pack.
LevStrauss on June 12, 2009 at 12:50 PM
Surely these bonds can be traced by serial numbers on the bonds.
Confederate currency and bonds in good sell every day to collectors.
SC.Charlie on June 12, 2009 at 12:51 PM
There was a report that bank documents were also confiscated. Could Japanese banks have accumulated this much capital? And if so, who is the sovereign that gave them these bonds and what was given in return?
shuzilla on June 12, 2009 at 12:53 PM
Good luck. I am going through something similar right now, and it is easy to get discouraged.
coyoterex on June 12, 2009 at 12:54 PM
Yep, many out here are hurting…
I closed my 7 year old company a few months back… Contracts had just dried up.
Now, I’ve go too much experience for entry level jobs, and one look at my resume and mid level managers get threatened…
Its… interesting out here right now…
Romeo13 on June 12, 2009 at 12:59 PM
He does now. Do you really think that Soros contributed all that money to Democrats out of the goodness of his heart?
logis on June 12, 2009 at 1:01 PM
At the rate we’re going….Let’s see in 10 years, $134bil will probably buy get you a GM econo-box.
panzerkardinal on June 12, 2009 at 1:04 PM
I say counterfeit. If this were a government operation, they would move it by diplomatic pouch and avoid any chance of being caught by anyone. Only a government would have that amount in assets.
The real question is why someone would try to fake something that’s about to be worthless. You could make more by counterfeiting monopoly money.
trigon on June 12, 2009 at 1:08 PM
I wish there was something I could do to help you succeed and survive these difficult times. I offer my prayers that you do and that you and your family are relieved of anxieties and suffering.
Now, let’s start putting an end to the policies of this disastrous administration in 2010.
Loxodonta on June 12, 2009 at 1:13 PM
I hate to say it, but I sincerely believe we won’t make it that far as a republic.
logis on June 12, 2009 at 1:17 PM
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