$134.5 Billion in Bonds?

(Found at AR15.com)

2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy

ROME —

Two Japanese nationals were detained by Italian financial police last week after trying to enter Switzerland with $134 billion worth of undeclared U.S. bonds, mostly Treasury bonds, an Italian daily said Wednesday. The Japanese consulate general in Milan confirmed that the detention had taken place and said it was trying to confirm with Italian authorities whether the two were indeed Japanese nationals and their identities.

According to the report in il Giornale, two unidentified Japanese in their 50s concealed the bonds, including 249 U.S. Treasury bonds each worth $500 million, in a suitcase with a false bottom that was searched by the Italian authorities June 3 when they were in Chiasso, at the border with Switzerland, about 50 kilometers north of Milan. The daily did not say on what charges they have been detained, but the two may have been detained on suspicion of attempting to take a large amount of securities out of Italy without declaring it because the paper said they had not declared the bonds.

Note the date in the original article - June 3.

More:

Italy Seizes $135 BILLION Of US Bonds

This is a totally crazy story.

Asia Times: 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.

The question now is whether the bonds are real or counterfeit

Karl Denninger, who discovered the story, notes that either way, this is wild:

If they're real, what government (the only entity that would have such a cache) is trying to unload them?

If they're fake, this is arguably the biggest counterfeiting operation ever, by a factor of many times. I've seen news about various counterfeiting operations over the years that have made me chuckle, but this one, if that's what it is, is absolutely jaw-dropping.

The cute part of this is that if the certificates are real Italy just got a hell of a bonanza - their money laundering laws provide for a statutory 40% penalty for failure to declare instruments and cash in excess of $10,000 Euros, which means they'd garner a close-to-$40 billion dollar windfall.

We're leaning towards counterfeit on this one. Either way, we wanna know more!

Me too. Here's a picture of the seized bonds:


A poster at ARFCOM found this interesting coincidence:

Yosano Says Japan’s Trust in Treasuries ‘Unshakable’

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."

RTWT. If it IS the Japanese government, $134.5 billion represents about a quarter of their current holdings in U.S. bonds.

Another Bloomberg report from today:

Japan Probes Report Two Seized With Undeclared Bonds

June 12 (Bloomberg) -- Japan is investigating reports two of its citizens were detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland.

“Italian authorities are in the midst of the investigation, and haven’t yet confirmed the details, including whether they are Japanese citizens or not,” Takeshi Akamatsu, a spokesman for the Ministry of Foreign Affairs, said by telephone today in Tokyo. “Our consulate in Milan is continuing efforts to confirm the reports.”

An official at the Consulate General of Japan in Milan, who only gave his name as Ikeda, said it still hasn’t been confirmed that the individuals are Japanese. “We are in contact with the Italian Financial Police and the Italian Public Prosecutor’s Office,” Ikeda said by phone today.

The Asahi newspaper reported today Italian police found bond certificates concealed in the bottom of luggage the two individuals were carrying on a train that stopped in Chiasso, near the Swiss border, on June 3.

The undeclared bonds included 249 certificates worth $500 million each, the Asahi said, citing Italian authorities. The case was reported earlier in Italian newspapers Il Giornale and La Repubblica and by the Ansa news agency.

So it appears that the story isn't B.S.

Tinfoil hat time?

UPDATE: More here.