Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery 98 comments
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Here’s yet another huge financial story that has been virtually blacked out by the US financial media. Although on the surface, this story appears to be a non-event, if we consider some of the released facts about this case, you will understand why I consider it to be a huge story. On June 8th, the Asia News reported the following story:
“Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollars 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.”
Here are just a few fascinating facts about this case (at least they are being reported as “facts” at this current time):
(1) Though the smugglers have been identified in the press as “Japanese nationals” there has yet to be any confirmation if the smugglers were indeed Japanese or of some other ethnicity. How difficult is it to confirm the ethnicity of the smugglers and why is this information being kept secret?
(2) According to a brief Bloomberg article regarding this story, the seized bearer bonds allegedly were dated as of 1934. Since bearer bonds in denominations of $500 million did not exist in 1934, the bonds were deduced as fake, though the Italian police are still waiting for a declaration regarding the bonds’ authenticity from the SEC. There is something truly “off” about this declaration. How can the quality of the forged bearer bonds be so meticulous that they “are indistinguishable from the real ones”, yet the people involved in the alleged forgery so ill-informed as to not date the bearer bonds with a more recent year that would not immediately identify them as fraudulent? How hard would it have been to date the bearer bonds with a more recent year? An equivalent analogy would be if an expert art forger meticulously re-created a Picasso oil canvas and then erroneously signed the work with the wrong artist’s name. This story just does not add up.
(3) The Bloomberg story also reported that there is no known existence of the alleged 10 Kennedy bonds that were discovered in the smuggler’s suitcases, each with a denomination of $1 billion. Again, this discovery defies any logical explanation. Why would expert counterfeiters make 249 bearer bonds with denominations of $500 million apiece, each indistinguishable from the real thing, and then instead of just making 20 more such bonds, decide to make 10 bonds in denominations of $1 billion a piece in a bearer bond design that has never existed? Were the alleged counterfeiters just too lazy to confirm if Kennedy bearer bonds were ever a legitimately issued security? Again, this story makes no sense.
(4) On March 30, 2009, the US Treasury Department announced that USD $134.5 billion remained in its Troubled Asset Relief Program [TARP]. The stated amount of seized bearer bonds was $134.5 billion. Coincidence?
(5) 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? Again, this part of the story defies all logic.
(6) The bearer bonds were discovered in a hidden briefcase compartment after a customs inspection. Again, 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.
Thus, all of the above irreconcilable and illogical points, other than the coincidence of the amount of the bearer bonds exactly matching the remaining TARP fund amount declared on March 30th, seem to indicate that not only were the seized bearer bonds counterfeit, but also that the smugglers were intent on being caught.
Before I continue, let’s review the purpose of bearer bonds.
Here is the Wikipedia definition of bearer bonds:
“A bearer bond is a debt security issued by a business entity, such as a corporation, or by a government. It differs from the more common types of investment securities in that it is unregistered – no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the paper on which the bond is issued owns the instrument. This is useful for investors who wish to retain anonymity. The downside is that in the event of loss or theft, bearer bonds are extremely difficult to recover.”
If you recall the Michael Mann movie “Heat”, starring Robert DeNiro and Al Pacino, during a daring daytime armored car robbery, the criminals specifically targeted millions of dollars of bearer bonds for theft precisely because of the above qualities of bearer bonds that make them very difficult to trace. Again, due to the properties of bearer bonds, it seems highly unlikely that $134.5 billion of bearer bonds would be transported, if they were real, by two men with no security, since theft almost guarantees that they would be lost forever.
Thus far, about the only piece of information that appears to be reliable as reported by various news sources regarding this huge mystery is the remarkable authenticity of the 249 seized bearer bonds in denominations of USD $500 million. If any of the other facts, as they are being reported, are remotely accurate, then the bearer bonds were likely counterfeit. Still, the interesting part of this story, at least to me, is that the smugglers seemed intent on being caught with the counterfeit bonds. This leads me back to my previous question. What possible reason would the smugglers have for wanting to be caught? One of the quickest ways to sabotage and usher in the death of a currency is to raise legitimate questions about its ability to withstand counterfeiting efforts. Prove that counterfeiting is not only possible but highly likely, and the world’s confidence in the sabotaged currency will undoubtedly plummet.
In fact, this very tactic was applied during World War II when the Nazis launched Operation Bernhard in an attempt to crash the British economy by producing, by 1945, 132 million expertly counterfeited British pounds, a figure that represented roughly 15% of all real British pounds in circulation at the time. The counterfeit pounds were produced by expert printers and engravers supervised by an SS officer named Bernhard Krueger. As well, historical evidence exists that the Allies considered launching a counter-counterfeit plan against the Nazis as well. During this time, it was also alleged that the Bank of Italy counterfeited their own money by issuing the same securities twice with identical registered numbers and codes in order. The purpose of this counterfeiting was to secretly expand monetary supply without public transparency or accountability. Perhaps then, this $134.5.billion bearer bond mystery was an attempt of a nation state to shake the world’s confidence in the position of the US dollar as the world’s reserve currency.
There should be little debate that the world’s emerging economies in Russia, Brazil, China and certain Gulf Nations are at economic war today with the world’s Western nations and their economic allies. The currency war being fought today is sure to get much uglier in the foreseeable future, in both open tactics as well as secretly executed tactics. Currently, if the currency war were the world series of poker, the US and the UK would be holding a pair of 2s and relying on nothing but bluffs to keep the rest of the world at bay. Conversely, the Chinese and other emerging nations with large surpluses would be holding straight or royal flushes, and likely quietly maneuvering to go “all in” at some point.
Given that the discovery of $134.5 billion of bearer bonds in the suitcases of two Japanese nationals in Chiasso, Italy on the border of Switzerland qualifies as one of the largest smuggling operations in history, and given the various implications of such an act and the possible players involved, the silence regarding this huge story is simply stunning. It is not a huge story, per se, because of the counterfeiting operation, because accusations and revelations of massive money counterfeiting operations have occured in the past. It is a huge story, rather, due to all the inconsistencies of the story and the potential explanations that could explain these inconsistencies. The larger story at hand is, who are the players (nations) involved, and what was the intention of this likely counterfeiting operation? Maybe the future will reveal the answers to these questions. But maybe not.
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This article has 98 comments:
In other words, the ability to counterfeit such bonds would not likely result in USD devaluation. The Treasury would have to let that happen by honoring all bond claims, including fraudulent ones.
Of course, there are very few Japanese nationals who are non-Japanese. Anyway, it is not in the interest of Asian countries like Japan or China to devalue the U.S. dollar. If they want to do that, they can simply sell their U.S. bonds.
Yea but they're playing (and betting) with American dollars. Going "all in" might be a hollow victory.
What if they want to do the opposite--sell off some of their bonds without devaluing the dollar? Then this scenario makes more sense.
I am also suspicious about the "discovery" of these bonds. Seems like a deliberate setup/tipoff.
Last thought could this have anything to do with the Chinese wanting to purchase 80 billion more in gold. Heard about the Chinese seeking gold on the Glen Beck show last night along with mention of these bonds.
Could this actu8
Such bonds should have begun utilizing advanced-technology anti-counterfeiting measures long ago. No doubt some high-on-himself engraving specialist in the Treasury Dept. thought it wasn't necessary.
On Jun 16 08:35 AM Marli wrote:
> A central bank is trying to dump these bonds on the black market
> without causing a panic.
Though it is disturbing that the US currency and government programs could become the subject of common scams that used to always be associated with Nigeria.
Write, call fax and e-mail your local representative. Ask them to support the “Federal Reserve Transparency Act of 2009” (H.R. 1207). Audit the Fed. We need more transparency, not less. For more info visit www.opencongress.org/b...
Surely when the Italian customs detain Japanese nationals, SOP would be to inform the Japanese embassy? How long does it take the normally-efficient Japanese to verify two passports? Or should they perhaps have asked the North Korean consulate...?
As cashing fakes would seem impossible; were these bonds intended as collateral for a series of loans? North Korea could use a little extra liquidity around now - rocket fuel can't be cheap....
If some of the bonds are real, it may be Kim Jong Il's piggibank, delivered to a safe deposit box at a Swiss Bank. On the other hand, why not use a diplomatic courier?. I am quite familiar with the trains running from Italy to Swizterland via Chiasso. Two North Korean operatives with faje Japanese passports, may not be aware of certain "nuances" about which trains are safer to ride undetected.
www.signonsandiego.com...
www.federalreserve.gov...
Hopefully, the story itself is bogus. If not, I pray to God they are indeed counterfeit. Even so, if the quality is as good as purported, this could spell trouble on many fronts. If they are genuine, well, stock up your pantry.
Suppose the bonds were a "good faith gesture" paid by the US to Japan? Japan is struggling with its own economy right now, and is desperately trying to find the funds for economic stimulus. The US would discourage Japan from selling Treasuries for that purpose, but might be willing to give it bearer bonds, which it could move to Switzerland and use as collateral for loans.
Way out there, sure. But the coincidence of the G-8 Finance Ministers meeting should not go unnoticed.
If it was some sort of covert attempt by a government to transfer funds overseas, why would they choose this method, rather than simply move via diplomatic baggage?
Another group that could be involved would be the Japanese mafia (Yakuza), and while they have alway been known to be rich and powerful, this is huge.
On Jun 16 09:18 PM Chuckles759 wrote:
> I smell a scam....does anyone remember this?
>
> www.signonsandiego.com...
There are a lot of Japanese who live and visit the Southern Philippines and it may very well be that they came into contact with these fake bonds while there. I lived there for several years and was approached multiple times by people trying to pass these off. Plane Crash... found in a cave... dug up from a Jap bunker. The story was different every time but the bonds were the same fakes. Sometimes the pitch lines were quite amusing. One guy showed me one of the opened cases with the bonds and wanted me to buy two other cases that were still unopened. Why? Because once opened, they were ‘null and void.’
The paper used is the standard 'antique' paper you can buy at any paper store in the U.S. or the Philippines. The English on the bonds had many grammatical errors and was consistent with 'Filipino English.' The bonds came with many other papers to authenticate them - including microfiche film (not available in 1934 – but available at government offices in the Southern Philippines). The bonds were numbered, but inconsistently – with some pages missing numbers and others having the same numbers.
The U.S. government confiscated some of these and U.S officials were quoted in the Filipino papers saying these were 'very good forgeries' which, in my opinion, is not true.
My guess is that this was a fairly complicated Nigerian bank account scam. Some quality fraudulent documents were made up, and they were meeting an unscrupulous investor that was going to pay them $XX in legal fees up front in order to get a cut of the supposed payment.
North Korea is known to have a fairly sophisticated US Dollar counterfeiting operation. Maybe these men are connected to that.
1) anyone who would buy these obvious fakes is a fool; and
2) the people caught with these fakes were foolish enough to try to smuggle them into Switzerland in circumstances that were likely to, and did, in fact, result in their detection.
One could deduce that the people carrying them were the fools that bought them. Of course, it could be a wild state-backed conspiracy, but for now, I'm content to file this story away as just another example of human frailty.
According to a recent online report by Jack Amano, the two were in fact Japanese nationals and employees of the government. I don't know if this is true or not. If you read Japanese here is the site: onuma.cocolog-nifty.co...
They are also at odds with both the US and Japan and have been threatening retalliation lately over the sanctions imposed upon them.
They are trying to kill 2 birds with one stone, shake the faith in USD and also place a wedge between Japan and the US.
Lastly, they have proven themselves to not be that bright when it comes to sublety. Although they may have intentionally been caught - to shoot a warning shot over America's bow - mess with N. Korea and they will mess with the fragile USD.
reveal. I see Angelina Jolie on that train....
Mystery of the Bear That Loves Japanese Bondage.
.....I am from India ..If i carry fake Indian bonds in my suitcase ...just to play monpoly or something ...and get into train in Italy ...does Italy have the right to arrest me ? carrying fake bonds is not a crime (It is like carrying monopoly money )...selling them as legal tender is ....
This story shows once again how much more informative the raw Internet is than the controlled and filtered mainstream media.
Clearly a fake, and cover up may be due to investigation.
The implications and consequences are alarming.
Would it not be funny if it was Soros?
Econolicious
Santayana said that those who don't learn the lessons of history... are doomed to repeat them. We haven't learned much in the past 230 years, have we?
The Japanese guys taking a "slow-train"? It just doesn't fit. I would have picked up the documents at port, got in a rental car, and simple drove across the border at 3AM. The chance of customs guys? Very low. The idea of putting all $130 billion with just one team? Thats a joke too. I would have split this up with twenty different teams.
So my guess is that this is a fraud, and a hoax. It's likely being filmed and part of some joke on the Italian government.
So weird. I thought that everything ran like clockwork in that country.
On Jun 17 09:32 AM richmondeagle wrote:
> Unfortunately, with our current inept administration we find our
> currency under attack and we are laying down our arms. Perhaps our
> treasury people are on top of this, but more likely they are at home
> working on TurboTax. Until our "fearless leader" gets it though
> his skull that there are people who don't just misunderstand us,
> but mean to do us harm, we will continue to see blips like this on
> the radar, but only if we are really looking... until something really
> bad happens. By then, the harsh reality will be that it was not
> George Bush's fault.
But as long as my local grocer continues to accept federal reserve notes in exchange for cans of beans and corn, or for a gallon of milk or a loaf of bread --- and the convenience store clerk will accept them in exchange for a tank full of gasoline ... who cares what they are really worth?
Anyway, the U.S. government is going to say they are counterfeit. I can not even begin to imagine how they could admit it if they were real. That would leave way too many questions to be answered. They have to say "fake".
But, there are uses for US bonds (stolen or fake) that would not involve taking them to a bank. They could be used as "collateral" in a lot of big scams. It is not implausible to think that if Madoff could get 50 billion with nothing, a well organized scam with 134 billion in bonds could do some damage.
Many many Federal Reserve and Wells Fargo Boxes were dispersed around the world between 1933 and the second world war. What we are observing here is an elaborate ruse by certian disgruntled parties to expose the historical Imperialism that ran rampant at the time.
The bonds are real and yet the underwriter of them is still a private corporation known as the Federal Reserve Board who is for all intense purposes bankrupt. Their redemption is problematic for the United States Department Of The Treasury as the assets behind these instruments is already committed or otherwise unavailable.
It appears that the current holders were trying to force a redemption of them without first seeking immunitry from prosecution. Not too wise a decision.
Often these types of historical assets are redeemed for about 10 cents on the dollar after genuine "Provadence" has been established.
The biggest risk is if the CIA get advanced notice. In this case usually the holders disappear suddenly and so does the evidence of the bond's existance. Pb is still cheaper than the redemption rates if the bonds are allowed to be processed correctly
The best option for everyone is to maintain the interest in this issue but know that it is not going to be solved anytime soon.
On the other hand if these were of the Wells Fargo variety they would likely be honoured with a much higher value.
It has liitle to do with the present day currency but still can have sizable impact if mishandled by the authorities.
Cheers;
It was also reported that the bonds were accompanied by "extensive documentation" and that the two gentlemen were not held in custody.
The Japanese embassy in Rome was contacted to verify their passports. The SEC was contacted to verify the bonds.
The story is now 12 days old. Why is it that we have not heard the outcome of either verification??
Are the reporters stonewalled?
This story raises so many questions, but the biggest question is the silence in the press.
FYI, the only mention of bearer bonds that comes to my mind was in the original "Die Hard" movie. Hans and his hip Euro-thieves were after 600 million in bearer bonds locked in a safe at the fictional Nakatomi Building in LA. Bruce WIllis killed off all the bad guys one by one and the hostages were rescued.
The scammers sold the unsuspecting Japanese business men these bonds for some cash.
Ted
See my article on Nigerian Scams: www.investorsdailyedge...
the evidence for a tip off is compelling.
there is a BRIC meeting since jun17th where the Russian agenda is pretty much trash the US and its dollar and replace with ruble. multiple statements to that effect including cameo appearance by AhhMADinojihad soon to go nuclear and always can be counted on for the trash the usa part. He even took valuable time off from crushing his opposition to attend www.timesonline.co.uk/...
this is looking like Russias way (read xKGB) of telling the BRIC countries stick with us this is not just talk we can and will end the dominance of the USA dollar by hook or as usual by crook
ie printing fake dollars/bonds
Interestingly, all the comments who yesterday rightly called it a hoax have disappeared from this thread.
FAKE FAKE FAKE FAKE
You're getting drawn into the story. But it's all bullshit. The STORY is what's fake.
On Jun 19 09:33 AM ricardoRI wrote:
> I think we a lot of over imaginative imaginations, world conspiracies,
> taking down the US currency, etc. It is obvious to me that these
> are simply counterfeit, and the perps were caught. End of simple
> story.
www.treasurydirect.gov...
Oh yeah and the fun part is clipping off the coupons every six months and mailing them in, that is if you want your interest payments.
"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.
Weird, but plausible? The Italian government gets the bonds authenticated, gets the 20% of value, the rest is just returned to the US Treasury. The Japanese guys? Not Japanese at all, but planting this story simply forces this ally to defend itself to world and prove its loyalty to the dollar, at a time when the US most needs the world to hear this. The story...planted by the US government/Italian government...hence the two guys disappear, the story is quashed or the scam blamed on the yakuza, or left to drift into all kinds of wild theories, which assures its death due to flakiness. All of it becomes plausibly deniable by the governments. And it is this..."plausible deniability" which bears the fingerprints of government collusion in my book. Hence, no coverage in US media, Treasury and Fed get to do what they want, and no Congressman is forced to fake anything (e.g. vote to help Italy or vote against) nd is thereby left to his/her usual devices to keep campaign contributions flowing. An operation that is so much cleaner when done out of the light of day...such is the state of American "democracy" unfortunately...
On Jun 20 04:23 AM wallflower wrote:
> Consider a weird possibility: Perhaps the bearer bonds are authentic.
> Perhaps the Treasury and the Fed know that they are essentially worthless,
> because the U.S. is bankrupt, but the bonds are still useful so long
> as the US dollar stands. Consider that perhaps the timing is right
> for this scheme because the dollar still has its value as the world's
> default currency (and is ascendant as other countries are in worse
> shape even than the U.S.), and this value will continue to hold at
> least until the BRIC meeting on June 17, when no one knows exactly
> what the fallout may be for the US dollar. Imagine that the U.S.
> realizes that among the EU nations, Italy and France are in the most
> precarious positions due to the degree to which their banking systems
> are overleveraged, and Germany, the UK, the European central banks
> and the IMF are too fragile themselves to assist France or Italy
> in averting the imminent collapse. Imagine that the US government
> realizes that American voters and taxpayers have no stomach for any
> overt assistance to a European country, even to forestall an imminent
> banking system collapse that could collapse the EU and the euro.
> Imagine that the whole purpose of this scheme was to allow Italy
> to legitimately claim 20% as the legal penalty for attempting to
> pass or smuggle these bonds, thereby enabling Italy to infuse liquidity
> into its banking system.
>
> Weird, but plausible? The Italian government gets the bonds authenticated,
> gets the 20% of value, the rest is just returned to the US Treasury.
> The Japanese guys? Not Japanese at all, but planting this story
> simply forces this ally to defend itself to world and prove its loyalty
> to the dollar, at a time when the US most needs the world to hear
> this. The story...planted by the US government/Italian government...hence
> the two guys disappear, the story is quashed or the scam blamed on
> the yakuza, or left to drift into all kinds of wild theories, which
> assures its death due to flakiness. All of it becomes plausibly deniable
> by the governments. And it is this..."plausible deniability" which
> bears the fingerprints of government collusion in my book. Hence,
> no coverage in US media, Treasury and Fed get to do what they want,
> and no Congressman is forced to fake anything (e.g. vote to help
> Italy or vote against) nd is thereby left to his/her usual devices
> to keep campaign contributions flowing. An operation that is so much
> cleaner when done out of the light of day...such is the state of
> American "democracy" unfortunately...
Lots of backdoor deals are being made among governments, to salvage the remains of major industrial assets...much friendlier deals among western-to-western powers...something like circling the wagons as the next economic battle between West and emerging East centers of financial power, begins...
Of course, multi-national corporations know no sovereign loyalties, so this is about government preparing to address massive fallout among unemployed while corporate owners get out while the getting is good. Of course, only the top really ever gets out...most are left holding the bag.
www.cnn.com/2009/US/06...
hmm? maybe U.S. officials passed the word to keep an eye out for large amounts of cash floating around (buses, trains, planes, whatever)
On Jun 16 03:06 PM manya05 wrote:
> Mmmm.... I have my doubts the Italian police can tell the difference
> between a real and a counterfeit piece of paper (bond, cash, whatever).
> Could be as devious as the article suggests, but it sounds like a
> hoax to me...part of a Japanese reality TV show maybe?
On Jun 19 02:36 AM Dada wrote:
> Let’s presume country X holds US bonds worth something like $134
> billion. Country Y has a technology of counterfeiting bonds the way
> it is impossible to separate them from original (even imperfect counterfeits
> could work for this scenario). Country Y, knows about countries X
> bonds. Y makes $134 billion and exposes it as smuggling effort. US
> deny them as counterfeit. The effect is that country X now has no
> guaranties that their bonds will be recognized as real or somebody
> will claim that amount from US. So this could force the country X
> try to cash out it and effectively will hit US economy or in case
> if US denies it – will force US and Y into conflict.
Quote "
The lost horizon of the emperors
R Vaidyanathan
First Published : 21 Jun 2009 11:27:00 PM IST
Last Updated : 21 Jun 2009 12:07:49 AM IST
AT every seminar on financial matters these days, there’s one question that lingers — even during the coffee breaks: will the economy recover, and when? And, it isn’t about the Indian economy but that of the US. I reiterate it will take at least 40 quarters — that’s a decade — for America to recover. I tell this, and am shunned — like a swine flu patient.I still maintain the US is going the banana republic way what with a national debt of more than $10 trillion, which is more than 80 per cent of its national income. Not only that the budget deficit is skyrocketing; it’s expected to reach more than 10 per cent soon. Last year, the US financial regulatory agencies came up with plans of financial support worth $6.8 trillion — comprising temporary loans and liability and asset guarantees. And by the third end of the first quarter of 2009, the financial support programmes reached $13.9 trillion.The federal deficit as percentage of GDP is now expected to reach more than 10 per cent. There will be furious printing of more treasury bills and notes. The expected inflation is going to rip apart the society and the largest selling item in the last quarter was handguns and rifles. Already intriguing reports have come about attempt to smuggle more than $134 billion in treasury bonds by two Japanese citizens through the Italian border into Switzerland (see Gurumurthy's article below). It could be a ploy by CIA or really a daredevil act by some foreign government to destabilise the global financial system. I am waiting for the creditrating agencies like S&P to downgrade the US economy like other developing countries and prove their independence from the sole superpower. High hopes. Angus Maddison in his pioneering work for OECD on the global GDP share for the last 2,000 years has brought out an interesting fact pertaining to India and China. As early as the 1820s, China (33%) along with India (16%) and other Asian countries had a share of more than 55 per cent in the global GDP. By the late 20th century, it has declined to 29 per cent. The China percentage slid to 12, India’s to 5.In the next 20 years, India should plan to have a share of at least 30 per cent of the global GDP. These imply that India should be racing ahead. If India grows at 8 to 9 per cent in the coming decade, then it can become the world’s third or fourth superpower.But it also implies that, parallely, the West should decline in terms of their importance in the share of global GDP and world affairs.Since the total is 100 per cent, any increased share for India and China would automatically reduce that of the other two.Unlike the Great Depression of the 1920s, the current crisis for the West is not just an economic crisis. It has a dimension of demography and conflict (ongoing war with radical Islam) to it. Demographic, because Europe is slowly fading away from the global map. It used to have more than 20 per cent of the global population during the First World War, and now has less than 11 per cent. What’s more, it’s expected to shrink to three per cent in as many decades.The reproductive rate in many European countries is less than 1.5, whereas the stable one is 2.1. In the case of US, the crisis is more severe due to its declining savings rate and a long-term tendency to nationalise families and privatise government.Social security and Medicare system in US is classic case of nationalising families.Such a declining Empire is dangerous to deal with. To start with, it does not want to accept the fact that it is a declining Empire.Plus, it wants to retain its sole power status when it realises that its writ does not any more hold good. It tries to bully India.Whenever a US official visits India, the beards in J&K become more active. Remember Robin Raphael of the nineties vintage who propped up the Hurriyat Conference? India recalls with anger the role Robin Raphael played during the Presidency of Bill Clinton in encouraging the formation of Hurriyat Conference, the umbrella organisation of moderate terrorists and terrorised moderates. Her only name to fame was she studied together with Clinton. When Hillary comes to India, the level of violence in J&K will increase. I wish someone in foreign office in India plots the correlation between visits of US officials and mob frenzy in the downtown Srinagar.The declining empire realises that its elbowroom is becoming lesser and lesser with the Pakistan army that owns and controls a country. Islamabad always has a peculiar way of coming to discussion on any issue.They keep a gun on their own head and argue with others. That is, they always threaten others with catastrophe if money is not given to them. This is the most sophisticated begging anywhere you can see in international relations. Bribing them won’t stop the plotters against the “US Satan”.The next thing the declining empire does is to cringe and appease. The speech by Obama in Cairo is of that variety. He ascribed every human scientific endeavor to Islamic civilisation. Forget the Hindus who invented zero, forget Ptolemy and forget Copernicus. Just rewrite history. The third thing a declining power does is to pressure others to sacrifice on its behalf to buy peace with bullies. It cannot deal with radical Islam and if the ISI (that is what is critical — not the ten per cent Zardari) needs to be appeased with a piece of J&K, then the US will try to arm-twist India.Herein comes our ability to understand declining powers.We must internalise that US is a declining power and our bureaucrats must chant it hundred eight times on a daily basis. We should also remember that USA is very uncomfortable in dealing with democracies.It’s natural ally is always a dictatorship since they can be “use and throw” friendships.Dealing with democracies is messy since they talk about a domestic constituency and behave similar to USA. A mirror image of itself is unacceptable to “sole super power”. As India continues to grow at more than 8 per cent — and simply due to the power of compounding emerges as a major power — the desperation of the declining power will be more since our terrorist neighbour who has a the largest begging bowl and highest per-capita AK-47s will blackmail the declining power to appease him to keep peace.What is in Indian interest is the continuation of civil war in Pakistan for, say, another ten to twenty years — ambient conflict — sort of auto-cannibalism which will be a dynamic disequilibria — situation.Other option is to have at least three or so states created out of that entity. The concept of stable Pakistan is passé and a mirage and that should be unequivocally communicated to the declining empire.Remember the last century. The declining British Empire — now it is the sick child of Europe but still with a grand illusion of influencing Indian sub-continent — created havoc by partitioning the land. The current declining empire may be tempted to do something rash to protect itself. And therein lays the challenge for our political leadership and mandarins. Dealing with a declining empire is more difficult than dealing with a stable empire.
The author is Professor of Finance, IIM-Bangalore, and can be contacted at vaidya@iimb.ernet.in.
Comments
Superb article! Atlast someone who can combine wit, sarcasm and satire with facts. I hope Vaidy writes daily and we are spared of useless articles from Neerja, Seema, Varghese, or Vir Sangvi. NIE please stop these ramblers from ever writing again. The reason why US has always bullied others is because it is a land of occupiers with a guilt mentality who occupied other's territory and practise crudest form of cultism and calling it as religion ( and they want to spread that cancer too!), has the temerity to preach to others on democracy. It is a nation born in (and out of) sin to use the proselytiser's language. The fact that it has built it's democracy after killing entire original inhabitants and putting the minuscule survivors in Guantanamo like enclosures is the cause. Unless this nation is defanged alongwith N. Korea and Pakistan the world would know no peace. Better the world allows it die a natural death. Hope China pulls the plug by encashing it dollars.
The $134.5 billion mystery
S Gurumurthy
First Published : 20 Jun 2009 01:10:00 AM IST
Last Updated : 20 Jun 2009 01:11:40 AM IST
The amount is $ 134.5 billion. Many may not have an idea as to what this number adds up to. In Indian currency terms today, of course, it is Rs 6,44,000 crore. But this equals the cash value of the GDP of the bottom 49 countries of the world. The annual income of the entire people of these 49 countries adds up to $134.5 billion. What is the significance of this $134.5 billion? This was the value of US treasury securities which two persons had attempted to smuggle into Switzerland from Italy. It happened on June 3. The persons who attempted this daring act were two Japanese in their 50s. An Italian newspaper reported it on June 10; other media began following it up and kept reporting. But surprisingly none of the mainline newspapers anywhere in the world, except the online Bloomberg, even reported it.The substance of the report was this. On June 3, the Italian finance police detained two Japanese nationals who tried to enter Switzerland with US Treasury bonds of the value of $134.5 billion. They were caught at Como, which is 50 km from Milano in Italy. They were caught in Chiasso’s train station after an inspection. The two men had hidden US treasury bonds in a suitcase with a false bottom. There were 249 bonds of the face value of $500 millions each amounting to $124.5 billion and another 10 bonds titled ‘Kennedy’ bonds of the face value of $1 billion each, that is $10 billion in all, making it a total of $134.5 billion. The Japanese consul in Milan in Italy confirmed that the detention had taken place; it was trying to confirm with the Italian authorities whether they were Japanese nationals and their identities. The media reported that the Italian police had asked the US Securities Exchange Commission to confirm whether the securities were genuine or not. Financial experts in Italy had already expressed the view that such high denomination securities could not have been issued by the US Treasury in 1934 which was the date appearing according to reports on the 249 bonds valued at $124.5 billion. Also no ‘Kennedy’ bonds ever existed, according to them. A few days later, on June 18, a spokesman of the US Treasury told the media that the bonds seized were fake ones; the US had never issued individual bonds of high value at all. So the US has officially declared the bonds which were being smuggled into Switzerland are fake. But this raises more questions than it answers. Yet none of the mainline media would touch this mysterious subject despite its high and exciting news value.If the bonds seized by Italian police were fake, it would suggest, as William Pesek, columnist at Bloomberg says, that at the minimum the US risks control over its monetary supplies on a massive scale. There have been reports for long that the US dollars in the denomination of 100s were being counterfeited all over the world. But this is the first time that counterfeiting of US Treasury securities has been found. This report comes at a time when the US economy is going through its worst phase since the Great Depression. As a commentator said, in Asia the fear of counterfeit treasury security makes the genuine ones suspect in the minds of the investors. How will new investors put in their money in US treasury securities if there is no guarantee that the bonds which circulate in the name of the US government are genuine? The commentator further points out that while circulating perfectly counterfeited enemy currency was resorted to by rival governments during the World War II, the Bank of Italy went a step further and issued its very same security twice over with duplicate numbers to conceal the extent of public debt. Could the US government have done something similar? Raising this shocking question and answering it Karl Denninger in his blog titled Market Ticker wonders ‘if the US treasury has been surreptitiously issuing bonds to, say, Japan as means of financing deficits that someone didn’t want reported for the last 10, 20 years’. That the Bloomberg columnist cites Denninger’s comments shows the extent of desperation in the financial world for an explanation for what has happened at Como.If one looks at the pattern of holding of the US Treasury Securities, even though the US Treasury asserts that it has stopped issuing bearer securities, it has issued its securities to tax haven entities. Tax haven means that the identity of the ultimate owner is opaque. Out of the total of some 3,262 billion worth treasury securities held by foreign governments and banks as of April 2009, the amount of securities held by what the US treasury says as ‘Caribbean banking sector’ is mentioned as 205 billion and that includes Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, Panama and from June 2006 British Virgin Islands. In none of these tax shelters the name of the real investor is ascertainable. Even the British investments into US Treasury takes place through the Isle of Man, the British tax haven. The US government has admitted that it has allowed address-less money, that is black money, into the Treasury bonds. The world of finance has nicknamed this as ‘funny money’. Is the $134.5 billion funny money then?It is all mysterious. Denninger says, “Let’s hope we get those answer and this isn’t one of those funny things that just disappears into the night”. The Bloomberg columnist says “the US Treasury must go to the bottom of this tale and get the markets informed”. But will that happen? Will the truth come out and will the market ever get informed? Otherwise like many mysteries, this $134.5 billion will remain an unresolved mystery. But this is far too serious a matter to remain mysterious particularly given the depth of the financial crisis the US and thanks to the US the world is in.QED: If the $134.5 billion bonds were genuine Italy will get 40 per cent of it — that is some $54 billion — as fine from the smugglers. That would solve all its financial problems; its external and public debt will be off its balance sheet. comment@gurumurthy.net
About The Author:S Gurumurthy is a well-known commentator on political and economic issues"
On Jun 16 03:06 PM manya05 wrote:
> Mmmm.... I have my doubts the Italian police can tell the difference
> between a real and a counterfeit piece of paper (bond, cash, whatever).
> Could be as devious as the article suggests, but it sounds like a
> hoax to me...part of a Japanese reality TV show maybe?
But wait, maybe is that the Italian government realize that they are real and they don't want to loose 40% of those money.
So the bonds are real.
By the way, the 2 .jp are part of the Japanese Government.
This looks to me like a new Pearl Harbor.
There is news there that the bonds were real and the 2 men worked for the Japanese Finance Ministry.
www.turnerradionetwork...
geraldcelentechannel.b...
www.effedieffe.com/con.../
Too easy to blame the Mafia for everything! Easy escape goat when police and journalist have no clue!
www.asianews.it/index....
About the $134.5 billion bonds found in Italy and the secret financial system - Benjamin Fulford
There is a lot of confusion these days among people who still believe the Zionist web of lies formerly known as the “mainstream consensus.” The story about the $134.5 billion in bonds found in Italy is adding to that confusion. Perhaps a bit of background information will help clarify the situation somewhat.
First of all people need to realize that there are two sets of books used in global finance: the “official” data put out by government agencies etc. and the secret financial arrangements used between sovereign entities (countries as well as organizations). When members of the British and Japanese royal families first contacted me and started talking about thousands of trillions of dollars, I thought they were bonkers. Officially world GDP is $55 trillion so their numbers seemed impossible. However, after meeting multiple sources ranging from freemasons, to yakuza, to MI6 to Japanese security police, to CIA etc. I can now confirm there is a secret financial system whose total worth is “quintillions of dollars.” I think the numbers got this big as a result of some sort of ridiculous contest to see who had the largest penis among the folk who control the printing presses for dollars and euros etc.
In any case, the bonds found in Italy are connected to a massive operation that took place in the Far East before and during WW2. Part of that involved the Japanese invasion of Manchuria. When the Japanese invaded Manchuria in 1931 the owners of the Federal Reserve Board contacted the Chinese emperor and said “the Japanese are about to steal the treasure you have in Manchuria. How about we take that treasure to the Philippines for safe keeping? In exchange we will give you 70-year US government bonds that you can use to buy stuff from around the world.”
The emperor agreed to the deal and the Americans started issuing huge numbers of bonds backed by the emperor’s gold. To keep these shenanigans out of the US public eye, they printed the bonds in the Philippines. Some of these bonds are the ones the two Japanese were carrying in Italy.
This whole thing also ties into 911 big time. When the emperor made his deal with the Feds he asked them what would happen when the bonds came due and the Feds refused to pay back the principal. He was told US criminal authorities would take action.
The owners of the Fed thought they would never have to pay back the money because they thought the last emperor died as a gardener in communist China. What they did not realize was that the man in China was a double and that the real emperor escaped to Taiwan. His grandson, the current emperor, is now the dean of a University (I know his name and what university but to protect him I cannot tell).
The grandson had many other treasures in addition to the one taken to the Philippines and so he sued the Feds using top lawyers. A giant investigation was set up in the US involving the Treasury police, the Naval Office of Investigations, the FBI and Cantor Fitzgerald Securities. When first bonds came due for redemption on September 12, 2001, they were set to move against the Feds.
Well by lucky coincidence on September 11, 2001 “Al CIADA” bombed the Naval Office of Investigations, etc. out of existence and the investigation was temporarily blocked as the US was turned into a fascist dictatorship (if you do not understand this find a copy of the Nazi laws and compare them to the patriot act).
There is now a secret war going on between the royal families who have real treasure (the British, the Chinese, the Thai etc.) and the aristocratic families who own dollar and Euro printing presses. At stake is the future of this planet. The owners of the real treasure want to start a new financial system backed by metals and start a campaign to permanently end war, poverty and environmental destruction. The owners of the money printing presses want to continue their cycle of perpetual war and terror in order to keep control over humanity.
The Japanese arrested in Italy were part of that secret war and they were released immediately and sent on their way with their bonds. There is so much contradictory information from the Italian Treasury Police, MI6 and Japanese military intelligence sources that I cannot say whose side these guys were on. I am just glad the astronomical numbers released to the corporate media created congnitive dissonance among the still brain washed.
benjaminfulford.typepa...
Washington, D.C., June 21, 2009: “ It has just been firmly announced by the U.S. Treasury that the $134.5 billion dollars in government T-bills that the press reported were being smuggled by purported Japanese across the Italian/Swiss borders are laughable fakes. Don’t believe it. They are not fake at all. This is a case of “Just keep on going folks. Nothing to look at here.”. Most people don't realize that these negotiable instruments are not available to individuals and could signal some serious implications for the world economy and especially for the future of the U.S. dollar—just what we need. All so-called bearer bonds are serial numbered and it is known here that these bonds are not fake and were bought much earlier by the People’s Republic of China! What is all this about? The Chinese are livid with rage that Obama upped the interest rate on Treasury bills, thus effectively halving the value of the immense Chinese holdings of said bills. They tried every diplomatic trick in the book to stop this increase but Obama needs more money for his projects and his best option was to give better rates on T-bills. Now, the Chinese are trying to show him that they will fuck with the Treasury and so the two fake Japanese were deliberately sent off to Switzerland, via Italy with the Italian police warned they were coming. The Chinese wanted this to be discovered and wanted the US to know that China would do her level best to discredit American Treasury instruments if their demands were not met. These demands will not be met so China will try something else. North Korea is also getting shirty with us but they are walking on a soda cracker bridge just as it starts to rain.”
www.tbrnews.org/Archiv...
can anyone explain to me how this bond things work and how to claim it? or what is the function. like someone mention above, this box was found near philipines and it was belief that it fell off a crashed plane during WW2 .
please help because i'm not sure if it's a fraud and it's just dangerous to be in possesion of such item. i'm worried he might get jailed for it.
On Jun 17 03:16 AM nobby73 wrote:
> Good spot. I think the probability weighs on these being forgeries,
> despite how illogical faking something as large as a $500 million
> bond.
>
> If it was some sort of covert attempt by a government to transfer
> funds overseas, why would they choose this method, rather than simply
> move via diplomatic baggage?
>
> Another group that could be involved would be the Japanese mafia
> (Yakuza), and while they have alway been known to be rich and powerful,
> this is huge.
On Jun 19 02:36 AM Dada wrote:
> Let’s presume country X holds US bonds worth something like $134
> billion. Country Y has a technology of counterfeiting bonds the way
> it is impossible to separate them from original (even imperfect counterfeits
> could work for this scenario). Country Y, knows about countries
> X bonds. Y makes $134 billion and exposes it as smuggling effort.
> US deny them as counterfeit. The effect is that country X now has
> no guaranties that their bonds will be recognized as real or somebody
> will claim that amount from US. So this could force the country X
> try to cash out it and effectively will hit US economy or in case
> if US denies it – will force US and Y into conflict.
On Jun 16 09:36 AM Snoball wrote:
> Re: "There should be little debate that the world’s emerging economies
> in Russia, Brazil, China and certain Gulf Nations are at economic
> war today with the world’s Western nations and their economic allies.
> The currency war being fought today is sure to get much uglier in
> the foreseeable future, in both open tactics as well as secretly
> executed tactics. Currently, if the currency war were the world series
> of poker, the US and the UK would be holding a pair of 2s and relying
> on nothing but bluffs to keep the rest of the world at bay. Conversely,
> the Chinese and other emerging nations with large surpluses would
> be holding straight or royal flushes, and likely quietly maneuvering
> to go “all in” at some point."
>
> Yea but they're playing (and betting) with American dollars. Going
> "all in" might be a hollow victory.