Last week 2 Japanese men were detained in Italy after they were caught attempting to cross the Swiss border with $134.5 BILLION in US Treasury Bearer Bonds(unregistered – no records are kept of the owner, or the transactions ) concealed in the bottom of their luggage The amt.represents more than the GDP of many small nations and even nations like New Zealand .

Japan Probes Report Two Seized With Undeclared Bonds (Update2) - Bloomberg.com

Were these bonds real or counterfeit ? I don't know and I don't know if it would be worse if they were. After the two men were questioned they were released by Italian authorities.

If these bonds are real these 2 guys were carrying amts large enough to make them or the people they were muling for one of the top 5 creditors of the United States... ahead of the UK . This makes Bernie Maddoff's scam look like chump change.

Treasury spokespeople are saying the bonds are clearly fakes .But are they ? Reportedly they looked strikingly authentic except for the date of the bonds and the denomination of the bonds .
If the bonds are counterfeit they were more than enough to destabilize the dollar worse than we are attempting to do legitimately . German SS officer Bernhard Krueger in WWII attempted a similar attack against the British Pound.

If they are real ;investors of US debt would have a legitimate question about the US ability to control it's money supply on a massive scale. Nations like Japan that profess unshakable confidence in the credibility of the U.S. dollar must be rethinking .Or were the Japanese themselves moving these bonds to dump them ?

Yet with few execptions the news has been mute about this incident... maybe because no one would believe it .

Tinfoil hat time... At the end of March the Treasury announced that there was $134.5 billion left in the TARP funds.
Treasury Has $134.5 Billion Left in TARP - WSJ.com


The same amt. they were smuggling in bonds.


Back to reality .
The untold story that is not getting much press is who were these guys ? Who or what nation did they represent ? Were the bonds real (probably not) ? And what was the intent of the likely counterfeit operation ?

Hey, Tom. While these are all legitimate concerns, I think you are over-estimating the value of the bearer bonds. Yes, they have a face value of $134.5 billion. But if the US government can't pay the debt that those bonds represent, they are nothing more than worthless paper. And right now, considering our financial condition and the amount of unsecured debt the US government now owes, there's no way in hell we could pay those bonds. Which makes them worthless paper, and thus not a problem to worry about.

Elliot

You're probably right . If the markets are not reacting to this then I may be over-estimating how this would affect investor confidence in the green back. Or maybe investor confidence is so low that a deliberate attack on the currency would make no difference .

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Originally Posted by tomder55

You're probably right . If the markets are not reacting to this then I may be over-estimating how this would affect investor confidence in the green back. Or maybe investor confidence is so low that a deliberate attack on the currency would make no difference .

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I go with the latter.