US government securities worth US 134.5 billion seized from Japanese nationals

purch

Why if you wanted to go to Switzerland wouldn't you want to go straight there rather than fly to Italy and drive there?

Getting into Switzerland is harder than getting into your average EU country.

Getting into Switzerland from France is probably the easiest route, followed by Italy.

Italy is one of the easier EU countries to enter.

Into Italy and then into Switzerland makes sense.

carolt

How weird.

It's like a novel isn't it.

Seems totally unreal.

Count_Dante

This is stupid. Of course the bonds were fake.

lostinrates

For dopester, coverge not massive: a lot of ''normal'' people hadn't heard about it who I asked and, this late in the story in any case, nothing in headlines. I didn't buy a newspapr though, too busy to read one. That might have revealed something different, I don't know.

Someone asked why Italy, Milan is the main financial centre of Italy, possibly relevant, and is near Swiss border. Have never once been stopped going into Switzerland that way, even on my Uk plate, apart from the tolls, which is eleminated/reduced with telepass. I've only once (by accident) gone in from french border, also not stopped, but it would seem a logical route to go in via a stop in Milan.

Milan has a relatively large Japenese presence, for Italy, because of the fashion centre, and the financial centre. Besides us at breakfast our city centre hotel, there were lots of Japenese people (we were only Brits so far as I can tell, from the bar and breakfast, one single Italian and one italian couple, and a rather nervous looking American family: everyone else appeared to be Japenese). I did stirke up some youngish Japenese in conversation but their english failed as I steered the conversation from fashion to current affaires, not suspicious, I went back to art and the only thing they were able to communicate was a great interest in Leonardo da Vinci (who was for a long time in Milan and its where the fresco of The Last Supper can be seen, beautifully.) so unfortunately I have very little to report on that front, sorry dopester!

bubblesmoney

“The whole thing is a total fraud,” Stephen Meyerhardt, a spokesman for the Treasury Department, said Thursday. “They don’t look anything like real securities, which in any case were never issued in any of those denominations.”
The highest denomination ever issued by the Treasury Department was $10,000, he said. The Italian financial police claimed some of the paper was “Kennedy bonds” from the 1930s, but no such bonds ever existed. And the total of Treasury bearer bonds still outstanding is a mere $105 million; the Treasury has been issuing bonds in electronic form since 1986.

http://www.nytimes.com/2009/06/26/business/global/26fake.html

there seems to be deliberate wrong info being fed out by the treasury spokesman that the maximum denomination ever issued was 10,000$, this is a blatantly false declaration by the treasury spokesman, because the highest denomination ever issued was 500 million in the 60's. i remember reading a research paper from one of the uk universities into bearer bonds that clearly mentioned the existence of 500 million bonds that were issued to reduce the paperwork and risk of trying to move the coupons every 6months for the bonds. it was less paperwork for the treasury so thats why they issued the higher denomination bonds until they later made them electronic versions.

For most of their history after World War II, Treasury notes have been issued with denominations never rising above a high of $1 million. Yet, from 1955 to 1969, the Treasury issued Treasury notes with the added denominations of $100 million and $500 million. The purpose of this study is to determine why the Treasury issued these very-high-denomination Treasury notes and why it stopped doing so.
...........
Costs of Servicing Treasury Notes
The Treasury notes issued in the early 1950s were all couponed bearer securities, paying interest on a semiannual basis. To receive his interest payment, the holder of the note would detach the appropriate coupon and present it to his bank, which would then send it on to the regional Federal Reserve bank. The Federal Reserve bank would issue a payment, physically cancel the coupon, and send on the coupon to the Bureau of the Public Debt. The Bureau then recorded the payment and destroyed the coupon.

With the ten-fold increase in the dollar amount of Treasury notes issued between 1952 and 1955, the amount of work handled by the Federal Reserve banks and the Bureau of the Public Debt exploded. Correspondingly, the printing run of Treasury notes at the Bureau of Engraving and Printing increased from around 67,000 10-coupon notes in fiscal year 1952 to 690,000 10-coupon notes (or 6.9 million coupons in total) in fiscal year 1955.[ii] All these millions of notes and coupons would have to pass through the Federal Reserve system and the Bureau of the Public Debt.

An investor buying millions of dollars in notes or a custodial bank holding billions of dollars in notes for their customers also had a lot of work to do when they wanted to cash in their coupons. Every year two coupons had to be detached from every individual security and turned in for payment. If an investor had $500 million in Treasury notes, and hopefully held the sum in $1 million denomination securities, he would have to detach and turn in 1,000 coupons a year. Custodial banks handling larger sums and many smaller denominations had an even worse time.[iii] People had to be employed to cut, count, track, file, transport, and guard the coupons. Vault space was needed to store the Treasury notes. And, between 1952 and 1955, the number of notes and coupons involved was to expand ten fold. The resulting increase in costs was burdensome.

The Rise of Very-High-Denomination Treasury Notes
An easy way to reduce the administrative costs involved would be to add a few zeros onto the existing denominations, and this is what was done. In February 1955, the denominations of $100 million and $500 million were added to the existing ones of $1,000, $5,000, $10,000, $100,000, and $1 million. Raising the maximum denomination to $500 million cut down the amount of work involved in large issues of Treasury notes for everyone. The $500 million investor now had only two coupons to worry about, as did the Bureau of the Public Debt. And, the Bureau of Engraving and Printing only had to print one $500 million security instead of 500 $1 million securities. So, very-high-denomination Treasury notes were really money saving devices.

The issue of Treasury notes bearing very-high denominations was to continue for the next 14 years, through three administrations and five Secretaries of the Treasury. Their longevity was the result of the continuation of the trends first seen in the early 1950s: the Treasury’s inability to sell long-term bonds, market pressures toward short-term securities, and upward trends in servicing costs.

Anne Meister, Deputy Commissioner of the Bureau of the Public Debt, email to author, April 1, 2004.

[ii]Annual Report of the Secretary of the Treasury on the State of the Finances (Washington, DC: Government Printing Office, 1953), 103; AnnualReport of the Director, Bureau of Engraving and Printing, Fiscal Year ended 1952, Table 9; idem,, Fiscal Year ended 1954, Table 9; idem, Fiscal Year ended 1955, Table 9. Historical Resource Center, Bureau of Engraving and Printing, Washington, DC.

[iii]Kenneth D. Garbade, “G-20 Case Study: United States: Innovation and Structural Change in the U.S. Treasury Securities Market,” 2003: 33. URL: http://www.g20.org/download/public/20031026_cs_ institutional_building_usa.pdf.

extract from

The High Cost of Debt: Very-High-Denomination Treasury Notes and U.S. Treasury Debt Management, 1955-1969

A Paper for Presentation at the 2005 Annual Conference of the Economic History Society at the University of Leicester, 8-10 April 2005

By Dr. Franklin Noll

So as you can see the treasury spokesman is talking pure bullsh1t as they have issued denominations of 10,000$, 1million, ten million, 500 million etc in the past. if he is talking bullsh1t about something as basic as the denominations ever issued then he could very well be talking bullsh1t about everything. if they issued 500 million denomination bearer bonds from 1955 - 1969 they could very well have issued the similar amounts later as well.

Mr_Mumble

bubblesmoney, you're mixing up treasury bonds with bearer bonds.

bubblesmoney

Mr Mumble, wrt to the ny times article you have quoted, please see my earlier post and see my reasons why i say the treasury spokesman is telling porkies. see the research paper from leicester univ from 2005 and also other referenced articles from that article that definitely prove the existence of higher denominations of bearer bonds of 500 million. the treasury spokesman in the NY times article says they are false becuase the highest denomination EVER issued was 10,000$ which is blatantly false.

bubblesmoney

Mr_Mumble wrote: »

bubblesmoney, you're mixing up treasury bonds with bearer bonds.

please see the referenced article in my earlier post.

The Treasury notes issued in the early 1950s were all couponed bearer securities,

extract from the same article.

also just because the bond matures, it doesnt mean that it is worthless, it just means that there are no more coupons paying interest 6monthly. but the bond itself will still be cashable even long after maturity on a bearer basis as far as i understand even now.

Mr_Mumble

Bonds from the 1950s matured years, nay decades, ago. Bubblesmoney, your sources are incredibly dubious.

bubblesmoney

Mr_Mumble wrote: »

Bonds from the 1950s matured years, nay decades, ago. Bubblesmoney, your sources are incredibly dubious.

see the referenced articles quoted in the article i quoted earlier. see the last graph in that article and see how many bearer bonds of 500million were issued over many years.

i cant cut paste that graph as MSEforums doesnt allow to attach extracts from word documents. but after looking at that graph it looks like well above 100,000 of these bearer bonds have been issued each of 500million dollars over the years and more of other denominations.

[1]Tilford C. Gaines, Techniques of Treasury Debt Management (New York: Free Press of Glencoe, 1962), 79.
[1] Henry C. Murphy, National Debt in War and Transition (New York: McGraw-Hill, 1950), 92-103.
[1] Address by Deputy to the Secretary Burgess before the American Bankers Association, Washington, D.C., September 23, 1953. Annual Report of the Secretary of the Treasury on the State of the Finances (Washington, DC: Government Printing Office, 1953), 262-66.
[1] Anne Meister, Deputy Commissioner of the Bureau of the Public Debt, email to author, April 1, 2004.
[1]Annual Report of the Secretary of the Treasury on the State of the Finances (Washington, DC: Government Printing Office, 1953), 103; AnnualReport of the Director, Bureau of Engraving and Printing, Fiscal Year ended 1952, Table 9; idem,, Fiscal Year ended 1954, Table 9; idem, Fiscal Year ended 1955, Table 9. Historical Resource Center, Bureau of Engraving and Printing, Washington, DC.
[1]Kenneth D. Garbade, “G-20 Case Study: United States: Innovation and Structural Change in the U.S. Treasury Securities Market,” 2003: 33. URL: http://www.g20.org/download/public/20031026_cs_ institutional_building_usa.pdf.
[1] Testimony of John Carlock, Fiscal Assistant Secretary of the Treasury, before the Senate Permanent Subcommittee on Investigations of the Committee on Government Operations, 92nd Cong., 1st sess., 8, 9, 10, 16 June 1971, 153. Public Debt Central Files, OA-155, Book Entry Procedure for Transferable Treasury Bonds, Notes, Certificates of Indebtedness, and Bills, Important Data File, vol. V.

the references look ok to me but may be not to you.

the html version of the article doesnt show the graphs for some reason. so click on the link on the html version it will take you to a download msword version which shows all the graphs etc of the amounts of 500million bearer bonds (and other denominations as well) issued over many years. :beer: