$6 Trillion In Fake US Treasury Bonds Seized In Switzerland 199
ackthpt writes "If you're going to steal, steal big, right? Italian anti-mafia prosecutors have announced the seizure of $6 trillion of allegedly fake U.S. Treasury bonds, an amount that's almost half of the U.S.'s public debt. The probe focusing upon money laundering has also include financial dealings alleged to direct money to Nigerian sources to buy plutonium. Sound like a movie plot, yet? $6 Trillion, that's a lot of lettuce."
Re:Please clue me in. (Score:5, Informative)
Re:Please clue me in. (Score:5, Informative)
The plan allegedly was to sell them to developing nations and dupe their governments. The mafia would create a circus theater filled with distractions to make them look like a legitimate outfit. Office space, limousines, fancy suits, lots of showmanship. They'd use foreign diplomats and politicians on their payroll to get presidents or warlords of a foreign country into a face to face meeting.
They get a leader of some inexperienced government, possibly even a wealthy warlord, of a developing nation, and try to get them to transfer $1 billion worth of wealth in exchange for a $1 billion U.S. treasury bond. It is actually very creative. Had they not been caught they might have been able to pull this off. Though I don't see how any bank would have not raised a million red flags for this transaction and the reports are that the criminals wanted to move the money through Swiss banks.
This isn't the first treasury bond scam nor will it be the last. Organized crime loves this scam. Every year a few individuals are arrested with fake bonds on them that are valued at billions of dollars. The Italian police found a bunch of fake $1 billion bonds during a routine car stop a few years ago.
Re:Movie Plot? (Score:4, Informative)
Discharge a AA nicad batery (~1200mAh) in 4.3 miscroseconds, and you have 1.2GW, so a few lettuce leaves poses no problem. Now, getting a GJ would take a few head of letuce.
Re:Please clue me in. (Score:5, Informative)
Creating fake Treasuries is a “common scam, especially in Italy,” he said. The tipoff was the “astronomical” face value of each bond, he said. Fake bonds in high denominations are more common in Europe, where people are less familiar with the face value of U.S. Treasury bonds than in the U.S., he said.
Re:Pretend they are real (Score:5, Informative)
The US federal debt is only 15 trillion dollars. 6 trillion would make a big difference. Of course these are government bonds, so the US government would be obliged to pay them back, er.. something, there's no one to pay if the government has them, but that's beside the point.
With 6 trillion dollars or even half of that, you could get rid of basically all foreign debt the US has. Then your debt would be borrowed entirely from yourselves (which is mostly is now, but not completely). The reason Japan hasn't imploded, despite having 200+% of GDP in debt (compared to the US ~100%), and they've been like that for a decade, is they owe that money to themselves.
Government debt is odd. Especially because it's in a currency you control. Mild inflation, with economic growth and a close to balanced budget deficit makes even big debts like the US has go away very quickly. That won't work for japan because their population is shrinking, and aging, but it will for the US because the population is at least flat, if not growing. But 6 trillion dollars could do a lot of interesting things for the US. Including just cover the deficit for the next 8 or 9 years. (900 billion this year, and progressively less after that, theoretically).
Re:Duh! (Score:4, Informative)
No they didn't, in fact they increased their holdings significnantly (by almost 20%) in 2011 - almost taking back the top holder spot from China (China held 5% more) at the end of the year.
But don't let facts get in the way of your fantasies about the financial condition of Japan. Of course better to pick facts that aren't quite so published.
Re:Photos cast doubt on whether or not they are fa (Score:5, Informative)
It's even weirder than that... Here's the highest res shot of the front of the thing that I could find - link [divinecosmos.com]. (Caution -- source website contains industrial grade crazy. Just mousing over the link will get you on at least four watch lists.)
Zoom in on the flag. It's grainy, but I'll be damned if there aren't eight rows, alternating between 6 and 7 stars each. That's 4 x 13 = 52 stars.
Personally, I choose to believe that these are boxes sent back from the future year 1934 AA (after apocalypse), by future Americans who live in a 52 state US (50 + Canada + Mexico + Airstrip One - California [it finally sank]). In the future, the six trillion dollars barely buys a sandwich, but if they invest it several thousand years ago, they'll be rich! Unfortunately, the time traveler who was supposed to invest the money got distracted chasing after a bunch of loonies who were just trying to let all the animals out of the zoo, and the money ended up in the hands of the mob.
Hey, it makes more sense than any theory from those Divine Cosmos people.
Re:Duh! (Score:5, Informative)
Slashdot, where people's knowledge of technology is only surpassed by their knowledge and understanding of of economics.
But here you go: major foreign holders of treasury securities [treasury.gov]. Holdings at the end of Dec 2011:
China: 1100.7B USD
Japan: 1042.4B USD
And oh, here's the data on the Japanese GDP since 1960 [google.com].
FYI, it's grown from 4.6674T USD in 2000 to to 5.4588T USD in 2011. Sure, it fell for a while from the high of 5.2644T USD in 1995, but to state that their economy is not performing well only shows your stupidity.
Re:Photos cast doubt on whether or not they are fa (Score:4, Informative)
But, the staggered stars does not coincide with the common 48 state pattern of that time.
Based on what I've read, there are either lot of counterfeits of a real thing, or this was one incredibly engineered large scale counterfeit. These boxes have been found from all over the world recently, with highest concentrations in the Philippines, with people digging them up in the 1990s. There are quite a few stories to go with them, some more plausible than others. Yet, I cannot find any solid scientific evidence placing the origin of these boxes in history, other than when they were dug up or acquired and the condition they were in.
Given how interesting this could be even if it all the boxes are fraudulent due to its large scale and long history, I think this is worth trying to understand better.
Re:Bearer bonds (Score:5, Informative)
Wiki it
Short story is that bearer bonds pay to the bearer of them. There's no tracking of ownership. If you bought the bond and I stole it from you, you can't call the issuer to have them void that bond and issue a replacement. So literally, the bearer of the bond is the one who gets paid. Contrast that with a stock certificate - you have it, but the company knows who has them as well, or at least the transfer agent does. I steal your certificate, and you report it stolen to the transfer agent, and they void the old one in their records and issue a replacement to me.
The us government stopped issuing them in the 80s, I believe.
Re:Please clue me in. (Score:4, Informative)
However, just 10 years earlier in 1924 the Germans, who live next door to Switzerland, experienced hyperinflation [wikipedia.org]. This got so bad that they had to change currencies and literally remove 12 zeros from the old one. Maybe the counterfeiter got his 2's and 3's mixed up?
The German reichsmark was issued in both metal coins and as paper. Already during WWI the real world value of these different forms of payment began to diverge. The German hyperinflation only affected ther paper money (papiermark) - bonds sold abroad were denominated in goldmark and as such stable.
the hyperinflation ended with introduction of the rentenmark - which by a fairly complex scheme was looking as much like a gold currency as a currency can do without being backed by gold (rentenmark could be exchanged for bonds that paid the papiermark value of one goldmark at maturity) and was trading 1:1 with goldmark. As prices stabilized the rentenmark was converted 1:1 into the new reichsmark.
The goldmark was never affected by all these shenanigans and during the peroid of hyperinflation big business transactions were often conducted in goldmark (or foreign currencies).
Yah, except for this thing called inflation (Score:2, Informative)
Bzzt. The Google GDP numbers are not corrected for inflation, which means the Japanese economy has been either flat or slowly declining depending on the year you compare from. This is commonly known as their lost (two) decade(s). Japan is NOT in shape and hasn't been for a long time now, it's just that in a race to the bottom they don't stand out when the numbers are massaged just right (or enough new debt is taken on to paper things over at least until the next bureaucrat has to deal with them, who more than likely will keep trying to do the same).
GDP is a useless statistic for a number of other reasons, such as that it does not reflect quality of life indicators like the size of the middle class etc. But mainly because it has become meaningless due to runaway leveraging through derivatives and unfettered rehypothetication. In other words, if your Zynga Dollars or your financial sector grows by 500%, and your GDP grows by 1%, your real economy (such as manufacturing, agriculture, you know, STUFF) just massively deflated.