$135 Billion in US Bonds Seized is NOT News

A picture of the seized  “bonds” via  Adnkronos

Two men in their 50′s carrying suitcases with false bottoms are caught in Chiasso, Italy with $135 billion in undeclared US bonds. Allegedly these men are attempting to smuggle the bonds across the Italian border to Switzerland in order to deposit them into an account. The stash includes 249 US Federal Reserve bonds worth $500 million each, plus ten “Kennedy” bonds and other US government securities worth a billion dollars each according to AsiaNews.

Since the story surfaced on June 11th no charges have been filed nor has Italy’s financial police Guardia di Finanza released the identities or nationalities of the accused men. On June 12th, one day after the seizure, Colonel Mecarelli of the Guardia di Finanza asked the SEC (Securities and Exchange Commission) to verify the bonds authenticity and said he expected a reply “within a few days.” Twenty days later and still not a word from the SEC, the US Department of the Treasury, the White House, or the Italian government on their legitimacy. And in the mean time not a headline from CNBC, MSNBC, CNN, Fox Business, New York Times, Wall Street Journal, Washington Post, or nearly any other American mainstream media outlet, and the story is relatively difficult to find even using internet search engines. $135 billion in American bonds, roughly 1% of our entire GDP, is nearly smuggled into Switzerland during an economic collapse and no one feels like talking about it.

Could this really be a non-story? The mere implications of these smuggled bonds should warrant front page news, or at least a blurb on news channels. Because either these bonds are fake and the Italian government thwarted the most daring, impressive, and expansive counterfeiting ring in the known world or confidence in the dollar as an international currency is waning so fast that foreign nations are treating it like a plummeting stock, dumping it before it hits rock bottom and getting what they can from a toxic asset while generating some cold hard cash. A maneuver that might scare other foreign investors away from American debt, effectively cutting off the international credit card we’ve been using more and more to get by. Both scenarios are at least newsworthy, if not a career making story, for any journalist willing to tackle it, but still not an article can be found nor a talking head heard. Weird? Yes. But it gets weirder.

Assuming they are real, denominations like these US bonds are strictly used for government-to-government transactions making them nearly impossible to fake, are never used in the private sector, and are not easily stolen because of their rarity.  Only a nation’s Central Bank can access the paper version of bonds and would receive American bonds like these only after purchasing a portion of our Treasuries, aka our national debt. Every other transaction involving a bond is done electronically, completely paper-free through the Depository Trust and Clearing Corporation. Meaning there is not a private investment broker in the world that can get American Treasury bonds in their paper version worth $135 billion without robbing the Federal Reserve.

A report then surfaced indicating the smugglers are Japanese nationals, which only serves to thicken the plot of what might be the next Tom Clancy novel. Since Japanese investors are the biggest foreign holders of Treasuries after China with $686.7 billion of the securities in March according to the Treasury Department, liquidating $135 billion or roughly 25 percent of the Treasuries they own makes sense. The recent economic collapse killed global demand for our Treasuries and the yen’s 8.5 percent advance against the dollar since September caused Japan’s earnings to tumble a record 69 percent last quarter. With America’s escalating national deficit, stagnant job market, sinking dollar, and sagging retail numbers paying back the money we owe Japan, or China and Russia for that matter, is far from guaranteed.

But all speculation aside, this remarkable story has made one thing clear. Even in the age of the internet, mobile technology, and the 24 hour news cycle there remain choke points for information. Squeezed at the right time by the right people the flow of information through mainstream sources can be cut off. Without the press asking questions and getting names we have to rely on the wrong-doers to ignore human nature and report themselves as criminals. What’s more discouraging is that thousands of reporters and editors from hundreds of publications around the world are ignoring this story and for no good reason. International intrigue involving false-bottomed suitcases, Swiss bank accounts, US bonds, and shady back room deals is a journalist’s dream yet not a single reporter has stepped up to the task.

Every day this story lays dormant American journalists inch further away from their roots as cynical watchdogs and social muckrakers and closer to the complete subversion of the press and the protection their reporting is supposed to provide. If $135 billion in US bonds almost smuggled into Switzerland via false-bottomed suitcases is not news to the American media, what is?

by: Harold Johns III