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$6 Trillion In Fake US Treasury Bonds Seized In Switzerland
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."
Generally, no. Bonds are issued in fairly large denominations. But in this case, it would raise eyebrows because of the date. $1billion dollar bond would not be issued in 1934. No financial institution would have lent money in such one large chunk against 1 financial paper. Today bonds are issued in at least 100 million issues, but as someone pointed out, today they are registered, so it doesn't matter what the original issue is.
Any guest worker system is indistinguishable from indentured servitude.
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.
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.
"First they came for the slanderers and i said nothing."
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).
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. 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.
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.