There's been bewilderment over the story
from Italy where two Japanese "nationals" tried to smuggle in $134 billion in U.S. Treasury securities, including some Kennedy bonds of $1 billion denomination. �Now to my knowledge the largest denomination on a Treasury bond is $1 million. �Moreover, for these to be used in a transaction they would almost have to be bearer bonds, a bond that pays to whomever holds the bond, i.e., they're unregistered. �If I'm reading this document
right, it appears there's only about $105 billion of those still in existence.
So it comes as no surprise to me that the bonds turn out to be fake
�They�re clearly fakes,� said Stephen Meyerhardt, a spokesman for the U.S. Bureau of the Public Debt in Washington. �That�s beyond the fact that the face value is far beyond what�s out there.�
Italy�s financial police last week said they asked the U.S. Securities and Exchange Commission to authenticate the seized bonds, with a face value of more than $134 billion. Colonel Rodolfo Mecarelli of the Guardia di Finanza in Como, Italy, said the securities, seized in Chiasso, Italy, were probably forgeries.
Meyerhardt said Treasury records show an estimated $105.4 billion in bearer bonds have yet to be surrendered. Most matured more than five years ago, he said. The Treasury stopped issuing bearer bonds in 1982, Meyerhardt said.
Had the notes been genuine, the pair would have been the U.S. government�s fourth-biggest creditor, ahead of the U.K. with $128 billion of U.S. debt and just behind Russia, which is owed $138 billion.
According to the Italian authorities, the seized notes included 249 securities with a face value of $500 million each and 10 additional bonds with a value of more than $1 billion, as well as securities purported to be �Kennedy� bonds. Meyerhardt said no such securities exist.
I have looked for days for examples of a Kennedy bond but found none. So the questions become: who forged these bonds and towards what end? Who would have been willing to accept them as payment? How did these two persons come into possession of them, if they were not the forgers?
also raises a good point here:
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.
If it's a fraud, the best guess is that it's the North Koreans that have done this. �There are also stories
that the $500 million notes are marked Federal Reserve Bonds from 1934, which is another type of bond that does not in fact exist. �These bonds may instead be something invented by a weird Asian cult (one of the two "nationals" appears to be Filipino.) �I suspect in the end it's much ado about nothing -- two cranks fly to Europe to pass off some excellent fakes of fantasy bonds.
Labels: economics, money