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GLENN: First I want to give you an update on the treasury bonds seized in Italy. This story really, really bothers me. I have talked to several treasuries and bond experts. All of them will agree something's not right and I don't know what that something is and so I don't want to you know, I don't want to I'm going to give you some options, but I don't know what it is. It's just it just doesn't make sense, and you'll see why here in a second.
Two guys on a train. This happened over a week ago. Two guys on a train. They are in Italy. They are going across the border to Switzerland. They have an attache case, in the briefcase is their false bottom. In the false bottom is $134.5 billion of bonds. So you have some concept of that, that is $134 billion, that is 1% of our GDP, right? 1%. Or is it 10%? It's 1%. 1% of our GDP. 1% of our GDP. That's a huge number. Let me give it to you in another way. Everything that we have in the treasury at the U.K., the United Kingdom, everybody keeps our money as gold, right? We were the gold standard. Our dollar. They don't have necessarily dollar bills laying around. They have our treasury bonds. The United Kingdom, for their gold reserve in U.S. Treasury bonds, they have $156 billion. So this is just under what the United Kingdom has as their source of gold in their own vaults. It would make it the fourth largest sum of treasury bonds. First there's China, then there is Japan, then there's the United Kingdom, then this smuggled attempt and then Russia is $131 billion. It's a lot.
So the police get on the train. They are searching everybody and it's the financial police. We don't know yet if they had a tip off on these guys or what, but they found the bonds. They are two Japanese nationals. We know nothing about these Japanese nationals. They were questioned. There are conflicting reports on whether they were let go and then rearrested. We have no details on them, who they are. We have no names. We got nothing to go on with these Japanese nationals. We believe that they are still in jail. They should still be in jail, seeing that they were either into smuggling somebody's bonds or counterfeiting. If they were real, there is such a stiff penalty on smuggling money over $10,000 that Italy could claim 40% of this money.
Now, there were pictures, but again we don't know, we don't know anything. They were released by the Italian press and then this story just went away. These pictures that were released, people who are experts in bonds told me, and they clarified, Glenn, I can only see what I see in the picture, I can't see all the details, yada, yada, but these are $500 million bonds with the certificates attached, which means the when you buy a bond, you get like a certificate and you tear off the certificate when you sell them and then they verify the certificate and say, okay, they call the treasury: Is this a real bond? It's bond number 11007. "Yes, it is." Great. If you are going to fence bonds, you are going to fence bonds that you think you can get away with it. You know, you are going to fence them and, for instance, North Korea, when they were printing bonds we've caught them before trying to print our treasury bonds. When they printed them, they printed Kennedy bonds, when Kennedy was in office, and they got caught. They were printing I think million dollar bonds. They got caught because on the back they put a picture of the space shuttle and everybody was like, what? There's no space shuttle. I mean, that's how we caught. They were that dumb, okay?
Here's the problem. There have been $500 billion bonds before, but they couldn't be very old I'm sorry, $500 million bonds. They couldn't be very old. They could have been Kennedy bonds, which they appeared to be. They could have been Kennedy bonds, but nobody bought a $500 million bond. Nobody's walking off the street. Those were only government bonds. Some government would have had to buy a $500 million bond. If the certificates were attached I'm a little fuzzy on this one, but it's my understanding that it wouldn't have taken a long time to figure out who the bonds belonged to because there are so few of them, and you can just call up and get the serial number and you'd know exactly who they belong to. It's my understanding, though, with everything attached the way they were that these bonds, there is speculation of several things. First of all, let me tell you what the treasury has said today. The treasury came out today and said these bonds and I want to quote are clearly fakes. Two days ago they wouldn't release any information because they said it was an ongoing investigation. Today when we asked them, they said these are clearly fakes. Well, if they're clearly fakes, why did it take you ten days to discover they were clearly fakes? And why did last week people say that they were so good that it was hard to tell the difference between the two? Now, maybe clearly fakes because they were $500 million. That would make them clearly a fake. Or would it? Here's the conundrum that people that I have talked to that know this world have said. With the understanding that North Korea was so incredibly stupid that when they counterfeited, they didn't put the Apollo on there. They put the space shuttle on there. So maybe they are this stupid. But if you are trying to flood the market with fake U.S. bonds, the idea is you've got to flood the market. You've got to get all of this money out into the system. Who do you fence a $500 million bond to?
Now, let's just say you get, you know, you get a tenth of it. Who's going to spend that much money? Who's going to spend $10 million, $100 million on one bond without checking it, without at least saying what are the serial numbers here?" If you are trying to fence, you are going to do something like a million dollar bond because you could get somebody to roll the dice for 100 grand. But a $500 million bond? And how does that person you are dealing with the underworld. You are going to sell somebody a $500 million bond. You don't think they are going to come after you and kill you? The stakes are just overwhelming. They are just enormous. Now, maybe North Korea is this stupid where they are printing a $500 million bond, but you've got to be one of the dumbest groups of people of all time. Again, the information that we have, and it is very sketchy. They say that these are really well done bonds. The story up until this morning was they were so good that they had to have been done by a government with a government style printer. This is not something that you or I could just put into the Xerox machine. We couldn't just make these bonds. This was a big effort to make these bonds look real. Well, now they are saying that these are clearly fakes, today, the story changes. Who are these people? Who are the two Japanese men? Where did this originate? Show the bonds. Why wouldn't the government come out and show the bonds? Why wouldn't they want to be very, very clear and show everybody, show the world that, A, somebody is printing bonds and they are making them obviously fake, so here's what you look for. If they were good fakes, you might hold back just a bit because, you know, you want to have a good story so you can tell people and you know exactly what it is, or you want to catch the people first. If they're bad fakes, you would show them and say these are out there and these are people trying to do this but this is so clearly a joke, yada, yada, yada, yada. Because this hurts the confidence in the bond market which, again, is the only thing that is our lifeline, gang. Our lifeline. Once, the minute the world starts to liquidate our treasury bonds or the minute that somebody has made our treasury bonds worthless, you know, besides us, the Fed and the treasury, it's over. Game over. The dollar is worthless. So it doesn't make sense that they are playing their cards so close to the vest. It doesn't make sense that we don't know anything. It made a little more sense when they said the investigation is still continuing and we don't want to say anything. When they said that these bonds, they didn't know if they were real or fake and they were being examined. That took them ten days. Now to say they were clearly fake and no more information doesn't make sense to me.
Now here are the options. One, these are fake, and I hope to God they are, but I hope also if they are that there is an announcement very, very soon that we caught the country or the people that have a printing press capable of duplicating our bonds because if these bonds were in million dollar denominations, assuming that everything else that we supposedly know is true, if they were in million dollar denominations, they could have gotten out there and then we're in trouble. Because they were $500 million bonds which did exist, there is also the possibility that we're now being lied to for two reasons. One, there is a country that is trying to liquidate their bonds, but they don't want to they just want to do it quietly and they were going to Switzerland to be able to have some meeting and just, here, let's buy the bonds, let's just do this thing and nobody knows. There's the possibility that that happened. There's also the possibility that bonds have been issued by because this is what the story said, that these bonds had been issued by the Fed, okay? That would be another tip that maybe they are fake. Or that is a tip that the Fed has been issuing remember, we can't open their books and when congress, when the Republicans asked for transparency from the Fed, they wouldn't open their books. They declared bankers privilege. They wanted the privilege they are not opening their books. There's zero transparency. We don't know how much money they have, we don't know anything about the Fed. We do know this, that they have on their books $2 trillion, they have issued $2 trillion of debt and spending on the books that they have told us about, but the transactions for the Fed are $9 trillion. Where's the difference? What happened to the $9 trillion or the $7 trillion? What is that? Where is that coming from? The Fed has never issued treasury bonds. They are not allowed to issue treasury bonds. I hope to God they haven't. I don't think they have. But with a lack of transparency, with a government on both sides of the aisle that have been telling us one thing and doing another, not just through the Obama administration but through the Bush administration as well and then a two things: One, the Fed hires a lobbyist and it's the former lobbyist of Enron. Last week the Fed sent a former Enron lobbyist to Capitol Hill. They are afraid, as I told you last week, they are afraid. They need somebody up on the hill campaigning for them and with Obama coming out yesterday giving extraordinary power to the Fed, extraordinary, the opportunity for the treasury secretary in cahoots with the Fed to close down private business, just close it down, "You're a threat," is too much going on. The brakes what is the bill that is on the Fed now that has Senator DeMint as a sponsor in the Senate has 225 sponsors in the house? For the first time in American history since the Fed came about in 1913, there is a chance that the Fed is stopped dead in its tracks but not if this bill is passed that Obama wants, not if they give the Fed and the treasury more power. There is something going on. I don't know what it is. But we must stand together. Please, America, please use your gut. Use your gut. When in doubt leave it out. I am in doubt in many, many things, many things in Washington I doubt. Leave it out. Stand up and get involved.
