$134.5 Billion Bonds in Italy – Fake or not?

by Aaron on June 22, 2009 · 0 comments

in Economics

A follow-up to my post on the $134.5 Billion on bonds seized by Italian police in Como, Italy, and the argument that they are “clearly fake” based on a Treasury Official examining them online (probably this picture).

Regarding the claim that the Bonds are fake because they far exceed the official amount outstanding:

UPDATE 1-U.S. Treasury says bonds seized in Italy are fakes

WASHINGTON, June 19 (Reuters) – A purported $134 billion in U.S. government bearer bond certificates seized by police near the Italian-Swiss border are fake, the U.S. Treasury said on Friday.

“Based on the photograph we’ve seen online, they are clearly fake. And not even good fakes,” said Stephen Meyerhardt, a spokesman for the Treasury’s Bureau of the Public Debt.

He added that there is only $105 million in Treasury bearer bond securities outstanding, so the $134 billion amount seized far exceeds the universe of outstanding securites.

Please see the following:

Treasury Checks And Unbalances; The federal government, for the seventh consecutive year, was unable to balance its books largely due to rampant financial chaos at the Defense Department

Solari.com: The Missing Money – Trillions of Dollars are Missing from the U.S. Government

FT.com: Discrepancies in America’s accounts hide a black hole

Max Keiser and Stacy Herbert The Truth about Markets $134.5 billion in bonds London, Resonance 104.4 FM

The official logic is that these MUST be fake simply because “official” statistics do not allow for the amounts found on the securities. This is an “appeal to authority”. I see the irony in referencing Wikipedia on this one: http://en.wikipedia.org/wiki/Appeal_to_authority.

But if the Treasury has a track record of being unable to reconcile its books, is it possible there’s an off-the-books system at work on the world stage?

I’m placing a high probability on these bonds being fake, but haven’t ruled anything out. It could be the mafia, though highly unlikely due to the difficulty in cashing these denominations. It could be North Korea, adopting China’s mode of Unrestricted Warfare. Who knows?

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