I have intentionally avoided the seemingly comical issue of last week's discovery of bearer bonds. You see, $137 Billion of these things are simply not supposed to exist. So when two allegedly Japanese businessmen were caught trying to cross the Italian border into Switzerland with a briefcase full of these things, the rational thing to do would be to laugh it off and stash the thought in the back of one's mind along with crop circles, ghost sightings and time travel allegations.
But it is difficult to do that when the issue refuses to die, and that further investigations point to their validity rather than the inverse.
Zero Hedge has a fairly concise summary of the 3 possibilities, which she correctly suggests are:
1) All the bonds are fake
2) Some of the bonds are fake
3) None of the bonds are fake
Of course in the case of either #2 or #3, we have a serious problem. In the case of number #1, we have a lot of unanswered questions, such as:
a) why has the issue not died yet with a simple declaration of their illegitimacy by the treasury?
b) who in their right mind would think that any bank (or any person) would accept something with such large denominations without first checking their authenticity?
c) how do you get stopped at the Swiss border? I personally have waltzed into the country unannounced on numerous occasions. The borders are unoccupied at EU crossings. The only way you could be stopped is if someone had a specific reason to stop you. And that implies that option #1 is not the case.
For those interested in learning more about this question that keeps on giving, reading the full summary from Zero Hedge, An Open Letter To Tim Geithner, shall prove intriguing.
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