Obviously don't use a local train and be Japanese.
Oh and then there's this
Then this happens
http://www.bloomberg.com/apps/news?pid=20601101&sid=agTTqVJ0rhJI
So now we have this
So to summarize:
Two Japanese guys try to smuggle some 134 Billion Dollars of Treasury of dubious authenticity into Switzerland riding a local train filled with Italian laborers and get caught. A funny coincidence is that it's almost equal to the amount that was announced as "being left in TARP" March 30th.
While it is more than likely that they are forgeries the mere existence of these forgeries raises some questions. If they're real then Italian police hit the jackpot of 38 Billion Euros.
1. What were they exactly expecting they could do with these? Certificates for bonds are so passe.
2. Do most Japanese share the "UNSHAKABLE" commitment to flush their savings down the drain in Treasuries? Even if they're fake ones
Milan (AsiaNews) – 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.
The question now is who could or would counterfeit or smuggle these non-negotiable bonds.
In order to stop money laundering Italian law sets a ceiling of 10,000 euros per person for importing or exporting money without declaring it. The penalty for violating the law is 40 per cent of the money seized.
If the certificates were real, for Italy it would be like hitting the jackpot. The fine alone would amount to US$ 38 billion, five times the estimated cost of rebuilding quake-devastated Abruzzi region. It would help Italy’s eliminate its public deficit.
If the certificates are fakes the two Japanese nationals could get a very lengthy jail sentence for fraud.
As soon as the seizure was made the US Embassy in Rome was informed. Italian and US secret services were called in to assist the Italian financial police.
Some important international financial newspapers had already reported on the existence of ‘funny money’ circulating on parallel, i.e. unofficial, financial markets.
Oh and then there's this
Milan (AsiaNews) – There have been new developments with regards to the story of US$ 134.5 billion in US government bonds seized by Italy’s financial police at Ponte Chiasso on the Italian-Swiss border, which AsiaNews reported four days ago. News about it initially made it to the front page of many Italian papers, but not of the international press. Since yesterday though, some reports have published by English-language news agencies. And some commentators are starting to link the story to reports in US press dating back to 30 March.
On that date the US Treasury Department announced that it had about US$ 134.5 billion left in its financial-rescue fund, the Troubled Asset Relief Program (TARP), whose purpose is to purchase assets and equity to buttress companies in trouble. The existence of such means that the Obama administration may not have to go to Congress for additional funds, something which is especially important since many lawmakers have vowed to oppose any requests for more money.
At the same time, Japan’s Kyodo news agency has reported that the resignation of Japan’s Interior Minister Kunio Hatoyama might also be related to the Ponte Chiasso affair. Officially the minister quit as a result of a row over who should head the state-owned Japan Post, but some sources have suggested that such a scenario is not very plausible since Mr Hatoyama was Prime Minister Taro Aso’s main ally in his rise to the prime minister’s office, and is especially unconvincing since the ruling coalition government has to face elections in just two weeks time. Indeed there are many reasons to connect the Ponte Chiasso incident to the minister’s resignation.
First of all, the men carrying the bonds had a Japanese passport. Secondly, they were not arrested. Under Italian law anyone in possession of counterfeit cash or bonds worth more than a few tens of thousands of euros must be arrested. By comparison the value of the seized counterfeit bonds is equal to 1 per cent of the US Gross Domestic Product (GDP). Thirdly, how the seizure took place is worthy of a Monty Python movie—two well-dressed Japanese men carrying a briefcase travelling in a local train usually used by Italian manual labourers who commute to Switzerland for work had as much chance to go unobserved as two European businessmen travelling in the Congo.
For AsiaNews the incident raises several questions. For example, why did Italy’s press, of every stripe, first give the matter great visibility, only to drop it as quickly? Also, if we are to assume that the bonds are real, why were they in Italy on their way to Switzerland? If these were the unused TARP funds why would they be in US Federal Reserve denomination? Would it not have been better to wait to see how they would be used before the bonds were issued? If they are authentic and owned by a foreign state, why were they not transported in a diplomatic bag, which cannot be inspected at customs? And what will the Italian government do insofar as the issue represents an offence under Italian law? Will it impose a fine of 38 billion euros, and run the risk of a row with an ally, or return the money without any penalty to the rightful owner and show the world that Italy is some kind of banana republic, a semi-colonial protectorate that violates its own laws and constitution?
Then this happens
http://www.bloomberg.com/apps/news?pid=20601101&sid=agTTqVJ0rhJI
June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them amid record sales.
“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”
China and Russia, the largest and third-largest single holders of the debt, have said they may switch some of their reserves out of Treasuries, and economist Nouriel Roubini said yesterday the dollar won’t always be the world’s reserve currency. Treasury yields fell today after Yosano’s remarks, retreating from a seven-month high.
“Japan is, of course, mindful that selling Treasuries will cause the yen to strengthen and that would hurt corporate profits,” said Chotaro Morita, chief strategist in Tokyo at Barclays Capital Japan Ltd. in Tokyo. “Even with their strong ties, it’s possible Japan would consider selling U.S. Treasuries should the dollar say, halve in value.”
Switch Holdings
Ten-year Treasury yields fell to 3.80 percent today after Yosano’s remarks from 3.86 percent yesterday. They advanced to their highest since Oct. 16 this week after Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said on June 10 his country may switch some of its Treasury holdings to International Monetary Fund bonds.
“We may see complementary reserve currencies,” Roubini, the New York University economics professor who predicted the financial crisis, said yesterday in Athens. While it’s “not going to happen overnight,” the development “will diminish the role of the dollar over time,” he said.
U.S. President Barack Obama, who is projected to quadruple the nation’s budget deficit to $1.85 trillion in the year ending Sept. 30, has tried to assuage investor concern by pledging to cut the shortfall in half by the end of his first term. Obama may borrow a record $3.25 trillion this fiscal year, almost four times last year’s amount, according to Goldman Sachs Group Inc.
China Premier Wen Jiabao called in March for the U.S. “to guarantee the safety of China’s assets” and central bank Governor Zhou Xiaochuan has proposed a new global currency to reduce reliance on the dollar.
‘Complete Faith’
“We have complete faith in U.S. economic and fiscal policy,” said Yosano, who is also the minister in charge of Japan’s banking sector and economic policy. “The U.S. dollar’s position as the world’s reserve currency isn’t under threat.”
A strong U.S. currency benefits Japan by increasing corporate profits in yen terms and preserving the competitiveness of exports. A collapse in global demand and the yen’s 8.5 percent advance against the dollar since September caused earnings to tumble a record 69 percent last quarter.
Japanese investors are the biggest foreign holders of Treasuries after China with $686.7 billion of the securities in March, according to the Treasury Department. To reduce Japan’s investment risk, some lawmakers have argued the U.S. should sell yen-denominated debt, an idea Yosano said the government wouldn’t pursue.
“We have no intention of asking for that,” Yosano said. “It’s up to the U.S. to decide whether to issue dollar- denominated bonds or samurai yen-denominated bonds.”
Masaharu Nakagawa, finance spokesman of the opposition Democratic Party of Japan, said last month the government should ask the U.S. to sell debt denominated in yen, so-called samurai bonds, over his concern that the dollar may weaken.
Poets in Family
Yosano, a cancer survivor who became a lawmaker in 1976, is the grandson of Tekkan and Akiko Yosano, poets whose work is taught to school children. The son of a diplomat, Yosano is fluent in English and studied in Cairo for three years when he was a teenager. He graduated with a law degree from Tokyo University in 1963.
Under Yosano’s stewardship, Japan in April unveiled a record 15.4 trillion yen ($158 billion) stimulus package to pull the nation out of its deepest postwar recession. The minister said new measures may not be needed because packages announced since last year have already started to support the economy.
“We don’t believe the effect of the stimulus will fade,” Yosano said.
In the long term, Japan will need to reduce its reliance on exports and foster spending at home to sustain growth, he said.
“Ceaseless efforts are needed to create new technology and products,” Yosano said. “We need to increase domestic demand to invigorate the economy and make a significant contribution to global growth.”
So now we have this
Italy’s financial police said they asked the U.S. Securities and Exchange Commission to authenticate U.S. government bonds found in the false bottom of a suitcase carried by two Japanese travelers attempting to cross into Switzerland.
The bonds, with a face value of more than $134 billion, are probably forgeries, Colonel Rodolfo Mecarelli of the Guardia di Finanza in Como, Italy, said today. If the notes are genuine, the pair would be 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.
The seized notes include 249 securities with a face value of $500 million each and 10 additional bonds with a value of more than $1 billion, the police force said on its Web site. Such high denominations would not have existed in 1934, the purported issue date of the notes, Mecarelli said. Moreover, the “Kennedy” classification of the bonds doesn’t appear to exist, he said.
The bonds were seized in Chiasso, Italy. Mecarelli said he expects a determination from the SEC “within a few days.”
So to summarize:
Two Japanese guys try to smuggle some 134 Billion Dollars of Treasury of dubious authenticity into Switzerland riding a local train filled with Italian laborers and get caught. A funny coincidence is that it's almost equal to the amount that was announced as "being left in TARP" March 30th.
While it is more than likely that they are forgeries the mere existence of these forgeries raises some questions. If they're real then Italian police hit the jackpot of 38 Billion Euros.
1. What were they exactly expecting they could do with these? Certificates for bonds are so passe.
2. Do most Japanese share the "UNSHAKABLE" commitment to flush their savings down the drain in Treasuries? Even if they're fake ones
