San Diego Housing Bubble News and Analysis

Um we are at war, on two fronts. It's not the same scale as WWII - but we are at war.

No comment on the bond thing. I don't know enough on the topic to have an opinion.

My guess: these are North Korean supercounterfeits. Wouldn't be surprised if there were a link to organized crime in Japan (which also tends to have Korean connections).

These are counterfeit documents produced by professional printing machines & ink available only to national governments.

DPRK has been known to produce fake currency for a long time, now. Guess they're shooting bigger now.

Of course if you have a legally owned bond you'd want to collect interest on it and then you'd have to register the CUSIP or something equivalent to get paid.

Somebody will notice if the same # is used more than once.

Right, but I think the distinction here is that we are not in a *world* war. In truth, there's always a war (or wars) going on in some part of the world. A world war consumes the entire financial system with massive spending. Afghanistan and Iraq have not caused a massive surge in global spending - only a massive surge in U.S. spending.

Maybe we print the fakes, flood the market, then kill it by reissuing something else. Question authority??? When Obama's new order starts resigning or falling on the sword, then we will know it has started.

They were just trying to make a 30% downpayment on a house in San Diego: they found a great deal at the right time don't you know.

Hell, I vote for Americans to start counterfeiting Renminbi and start throwing that over the great wall.

Now where's that money printer I saw on ebay.....

Just kidding/just kidding... No one starts to reporting me to the Chinese secret service, you hear....

Why assume that they are counterfeit?

Maybe some central bank wants to sell dollars quietly.

Very interesting story. First off, this story IS being reported around the world in varying degrees. Just Google it.

Second, I vote for either stolen bonds or less likely, counterfeit bonds. If you were going to counterfeit bonds, I sincerely doubt you would do it in the 1,000,000,000 denominations. Those things tend to attract more than a little attention. Why stolen? Well, think about it. If you are a central bank, you presumably have access to official channels such as the diplomatic pouch to ferret those pesky bonds away to Switzerland. Why risk the 40% hit at the Italian border for undeclared currency?

If we ever hear the bottom of this story, it's sure to be something shady. I like the idea of North Korea and/or China and/or some Middle Eastern oil sheikhdom trying to rebalance its portfolio on the down low. Frankly, I think its bullish for the dollar.

10 Kennedy bonds?? Are these bonds from the Kennedy era? In that case, I suspect that the bonds in questions are fakes.. we are past the usual 30 year mark for redemption.

If you can't fake the government's currency, fake their treasuries.. Many of the new security measures have made counterfeiting US currency harder. It also makes me wonder if this has been going on for a few years on a large scale(counterfeiting against US currency). That could explain the push to modernize the US currency.

Since the treasuries have serial numbers, it shouldn't be too hard to determine their authenticity. I suspect that most large denomination notes are tracked individually.

The Iranians are reported to be involved in creating Super notes, that were
just perfect for The US 20, hence the multiple changes. They may have to
really increase the note security, add holograms, add multiple colors,
add validation strips.....

That or they need to scan the serials at high speed and start noting dupes in the system.

Patb,

I beleive that you are refering to the DPRK. Here is an excellent NYT piece regarding the "super notes".

http://www.nytimes.com/2006/07/23/magazi...

134 billion is A LOT of money. This is another indication that shit is about to blow sky high.

Don't get caught holding old maid treasury notes;)

"Why assume that they are counterfeit?

Maybe some central bank wants to sell dollars quietly."

A central bank would never send physical couriers like that to Switzerland for the obvious reasons of risk; they would trade electronically through big global investment banks, the usual suspects. Staying quiet they would break up the trades into smaller chunks.

Besides, if these captured couriers were legit, they would have given them the name & number of their employers, and some Very Important People would have called one another.

Almost certainly there must be some criminal activity involved.

Someone else agrees with you:

"Japan secretly trying to divest out of their US debt?
Posted by Chris Brunner on June 11, 2009 11:48 AM | Post a civil, substantive, and intelligent comment
From the original article:

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.

This is very significant news, because, as Michael Barnett writes in an email, one of the following must be true:

1. The Japanese are trying to secretly divest themselves of about 25% of their US debt. (They own about $600B in US debt.)

2. The Japanese are acting as Chinese or North Korean agents in trying to help them divest themselves of US debt in secret.

3. There is an enormous sum of counterfeit US debt out there and these guys are trying to sell some of it.

None of these cases bodes well for the US debt market."

http://www.lewrockwell.com/blog/lewrw/ar...

delete

Internationally the world is turning against the dollar with verbal bashing from major world powers like Germany, China, Russia, and France and physical moves by China, Russia, IMF and Brazil

Internally you have the audit the Fed bill, the "hidden" 2 trillion supreme court case, the BOA hearings, Spitzer writing articles and verbal battles with Senators. This is quite unusual.

The heat is on. Connect the dots...

I couldn't agree more, Arraya. Watching all of this I really get a sense that the rats at the top are starting to turn on each other...there's no telling what will be revealed by the time it's all over. I am desperately hoping for some smoking gun or incontrovertible evidence that proves once and for all to the sheeple that they've been bamboozled for the better part of a century. Crossing my fingers ;-)

"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."

http://www.bloomberg.com/apps/news?pid=2...

" In 1992, Bill McCollum, a Florida congressman and chairman of the House Task Force on Terrorism and Unconventional Warfare, issued a report accusing Iran of printing the supernotes. The report estimated that the value of supernotes in circulation might eventually approach “billions.”

" In 1992, Bill McCollum, a Florida congressman and chairman of the House Task Force on Terrorism and Unconventional Warfare, issued a report accusing Iran of printing the supernotes. The report estimated that the value of supernotes in circulation might eventually approach “billions.”

Karl Denninger has some verrry interesting thoughts on this in his latest column. If he's right, there will be fireworks this Fall.

Why do I get the feeling that we are watching "The Godfather" play out on a global scale...?

...............................

"Are we willing to assume that all the "issue" of Treasury bonds has been done "above board" as required by law? If Treasury has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn't want reported over the last, oh, say 10 or 20 years, then the following is about to occur:

Who could have possibly been complicit in such a scheme? I can come up with only two nations (and only nations could be involved due to size): The Japanese and Chinese. Since the two individuals who were arrested were reported to be Japanese nationals......

There are tremendous implications in an event like this, again, assuming the bonds are real.

The owner is going to want them back, of course. But Italy is going to keep a third as their statutory penalty for non-declaration on the border. Oops. That's great for Italy, but it blows bananas for the actual owner.

Of course Italy (or the US!) could declare them "fake" and as a consequence simply burn them. If they are in fact real, that's an even bigger problem. See, Bearer Bonds are issued without registration - they are as anonymous as a $100 bill in terms of who owns them. That's one of their "features", and why they were often used for various clandestine money operations. So if they are real and are destroyed, the owner is out of luck - their money is gone just as it is if you burn a $100 bill in an ashtray.

How much is $130 billion in this context? About 1/5th or so of what Japan legitimately owns of US Treasury debt. How would you like to take an instantaneous (and permanent!) 20% haircut on your securities? That's what I thought."

http://market-ticker.denninger.net/archi...

Okay, if we're going to talk conspiracy theories, here's my version:

The Japanese were Yakuzi who were brokering a deal between Iran and France. The deal was for Iran to buy a nuke from France for 100 billion dollars. The Iranians, being the clever sort decided rather than pay with actual dollars, they would just print 134 billion in counterfeit bonds. (100B for the French, 34 billion commission to the Yakuzi) The Yakuzi were on their way to deposit the bonds in a Swiss bank for the French. BUT! The CIA got wind of the deal and tipped Italy, thus stopping the sale of a nuke to Iran.

dude

You can buy a nuke for $100 million.

They just aren't that expensive.

pakistan builds and sells them, Israel builds them, China builds them.

Look a Nuclear reactor is 2-5 Billion. If you have 10 Racs, you have the
capacity to build nuclear bombs.

Say a good physics technician is $100K/year in the thrid world,
You are talking of 200,000 Man years of labor in money, if you assume some amount for equipment and overhead.

For this kind of money, you get more then a nuke.

Okay, a whole bunch of nukes and a fleet of nuclear submarines from Russia. Whadda you say? Deal?

Good story.

Plus 72 Virgins

Or you can buy a house in socal

Even North Korea thinks it can build them and sell them...

What I don't get is why no major US news source except Bloomberg has picked up the story.
Josh

To me this is a huge story and the fact that no news outlets are saying anything about it speaks volumes.