The headline isn't all that impressive - "US government securities seized from Japanese nationals." It's the subtitle that really catches a person's attention:
Bonds worth US$ 134.5 billion are seized. This is the largest financial smuggling case in history. But are they real? Concern over ‘funny money’ or counterfeit securities is spreading in Asia. The international press is silent.
The story goes like this: two Japanese nationals in their 50s were stopped by Italian police in the town of Chiasso while trying to cross into Switzerland.
In a suitcase with a false bottom they were trying to hide 249 U.S. Treasury bonds, each worth $500 million, plus 10 Kennedy bonds each worth $1 Billion.
The sheer size of the denominations is worthy of notice, but the real eye-catcher is further down in the article.
Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.
If they were real then they wouldn't be in the false bottom of a briefcase.
We aren't talking about someone printing fake $20 bills from a printing press in their living room. We are talking about counterfeiting enough cash to crash the economy of a medium-sized nation, and doing it in such a way that no one could tell the difference.
How much has been printed and smuggled and no one caught it? A Google search turns up no American news outlets reporting this, only blogs.
International organized crime has gotten more professional in their counterfeiting activities of late, and American dollars are the default choice.
ROME - Italian police said Thursday they seized $10 million in counterfeit cash, guns and thousands of bullets held by a Mafia boss who turned police informant.
The money, in $100 bills, was of "excellent quality," said Col. Jacopo Mannucci Benincasa, the official in charge of the investigation. It had been produced locally with printing machinery that had been dismantled by the time of the raids.
The amount of funny money, as well as dirty money, floating around in the financial system is impossible to calculate. It certainly exceeds the GDP of most countries.
The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.
The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."
"Banking was conceived in iniquity and was born in sin. The bankers own the earth."
- Sir Josiah Stamp, 1927
So why should you care if someone is counterfeiting money? The reason is because when some group is creating currency out of thin air it debases all other existing money. It robs from everyone.
Of course, the Federal Reserve does that every day and doesn't bother to hide it.
Rep. Ron Paul notes that only the Fed can inflate the currency and create new money out of thin air in secrecy without oversight or supervision. “Debasing a currency is counterfeiting,” Paul told Congress in February, 2008, “it steals value from every dollar earned or saved. “It robs the people and makes them poorer… it is the enemy of the working person. Inflation is the most vicious and regressive of all forms of taxation. It transfers wealth from the middle class to the privileged rich.”