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Jun 20, 2009

Gata Dispatches: " U.S. Says Smuggled Treasury Bonds were Fake"

Submitted by cpowell on 05:46PM ET Saturday, June 20, 2009. Section: Daily Dispatches Italian Mafia Blamed for $134 Billion in Fake Treasury BillsFrom the Financial Times, LondonThursday, June 18, 2009http://www.ft.com/cms/s/0/82091ec2-5c2f-11de-aea3-00144feabdc0.html?ncli...One summer afternoon, two "Japanese" men in their 50s on a slow train from Italy to Switzerland said they had nothing to declare at the frontier point of Chiasso. But in a false bottom of one of their suitcases, Italian customs officers and ministry of finance police discovered a staggering $134 billion in US Treasury bills.Whether the men are really Japanese, as their passports declare, is unclear, but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia.Few details have been revealed beyond a June 4 statement by the Italian finance police announcing the seizure of 249 US Treasury bills, each of $500 million, and 10 "Kennedy" bonds, used as intergovernment payments, of $1 billion each. The men were apparently tailed by the Italian authorities.The mystery deepened on Thursday as an Italian blog quoted Colonel Rodolfo Mecarelli of the Como provincial finance police as saying the two men had been released. The colonel and police headquarters in Rome both declined to respond to questions from the Financial Times."They are all fraudulent. It's obvious. We don't even have paper securities outstanding for that value," said Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the US Treasury department. "This type of scam has been going on for years."The Treasury has not issued physical Treasury bonds since the 1980s -- they are handled electronically -- though they still issue savings bonds in paper format.In Washington a US Secret Service official said the agency, which is working with the Italian authorities, believed the bonds were fake.Officials in Tokyo were nonplussed. Takeshi Akamatsu, a Japanese foreign ministry press secretary, said Italian authorities had confirmed that two men carrying Japanese passports had been questioned in the bond case but Tokyo had not been informed of their names or whereabouts."We don't know where they are now," Mr Akamatsu said.Italian officials, while pointing out that hauls of counterfeit money and Treasury bills were not unusual, were stunned by the amount involved. Investigators are looking into the origin and destination of the fakes.Italian prosecutors revealed last month that they had cracked a $1 billion bond scam run by the Sicilian Mafia, with the alleged aid of corrupt officials in Venezuela's central bank. Twenty people were arrested in four countries.The fake bonds were to have been used as collateral to open credit lines with banks, the Reuters news agency reported. The Venezuelan central bank denied the accusations.
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Contact GATA
info@gata.orgGold Anti-Trust Action Committee
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Connecticut06043-7541 USA
www.gata.org

Gata Dispatches: "World Gold Council Expects No Impact From IMF Sales "

Submitted by cpowell on 07:23AM ET Saturday, June 20, 2009. Section: Daily Dispatches World Gold Council Welcomes Claritywith Regards to IMF Gold Sales Press Release via Business WireFriday, June 19, 2009http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_v...The World Gold Council welcomes the news that the U.S. Congress has passed the Military Supplemental Bill, thereby finalising the process allowing the International Monetary Fund to sell 403.3 tonnes of gold in a manner that will have no impact on the smooth running of the international gold market. This process began with the Crockett Report in 2007, which recommended that the IMF adopt a new income model, including the establishment of an endowment, funded by the proceeds of limited and structured gold sales. More recently at the G-20 Leaders Summit in April of this year, heads of state proposed to use additional resources from the gold sales to provide an extra $4 billion for poor and indebted countries over the next two to three years. This will not impact either the total level or the manner of the gold sales. The IMF has stated publicly that its gold sales should be coordinated with current and future Central Bank Gold Agreements (CBGA), whereby signatories have agreed to limit their gold sales to no more than 500 metric tons annually. Aram Shishmanian, CEO of the World Gold Council, said:"We are pleased to see that the IMF's plan to sell gold in a structured and non-disruptive manner has gone through due political process without problem, which is a credit to the responsible behaviour of all parties involved in the process. These sales will not constitute any net addition to the amount of gold the market is already expecting from official-sector sources as a whole, and therefore we anticipate zero market impact. We believe this announcement, if anything, will lead to positive sentiment among market participants as it clarifies that there will be no net addition to overall gold supply. "In these times of financial instability, gold's universal role as protector of wealth has come to the fore, not least as a crucial part of reserve asset portfolios. The fact that these sales will effectively rescue the IMF from a difficult situation regarding its own finances is proof of gold's unique investment characteristics, long-recognised by central bankers and institutional and retail investors alike." Given the IMF's status as "a lender of last resort," the World Gold Council believes it is imperative that the organisation continues to hold large gold reserves and acknowledges the IMF's public declarations that "the IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies."
* * *Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
http://www.gata.org
To contribute to GATA, please visit:
http://www.gata.org/node/16
Contact GATAinfo@gata.org
Gold Anti-Trust Action Committee
7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org