alternative news


April 26, 2011 By Joseph P. Farrell

In part one of this serialized blog, I concluded that for the bearer bonds episode to be a counterfeit operation, that there had to be ultimately a nation-state behind it, a state that owned such bearer bonds which could provide the exemplars to counterfeit to any forgers doing so, and who held large amounts of American debt. So who are the likely candidates for those nation states?

Obviously, Japan and China spring immediately to mind, especially as the so-called "smugglers" of the bearer bonds were alleged to have been Japanese. In an internet article titled "Japanese Dumping $134.5 Billion on Bearer Bonds Using Smugglers in Italy? What?" by someone calling himself "Luther," the following possibilities were raised:

"There are two major competing interpretations of what to this writer is one of the strangest financial stories of the last decade.

"1) The Japanese, or someone else in the Far East, are unloading American debt. The amount represents 25% of Japan's current holdings of U.S. debt.

"2) And not to be outdone, the conspiracy types, which are legion on Left and Right wing blogs, note the corresponding values:: $134.5 billion in bonds; $134.5 billion in remaining TARP funds. Was the U.S. administration, or officials in Treasury or the FED, parking a big pile of money overseas as a contingency in case things went to hell in the U.S.?"

"Luther" goes on to note that the writers for the Vatican-backed Asia News discounted the latter possibility, since if the story ever broke that such secret securities were being covertly issued by the US Federal Reserve or the US government, it could bring the whole US national power structure down. Asia News linked the bearer bonds affair to the resignation of Japanese Interior Minister Kunio Hatoyama. That brings us to what may be the proper interpretive context for the whole affair: Japan's politics in 2009, and its wider implications.

I have written previously on this website about the fact that, in the wake of the Japanese earthquake-tsunami-nuclear disaster, that the Chinese, South Koreans, and Japanese were planning a regional security summit to discuss disaster preparedness and "other issues." When the story was first issued, US Secretary of State Hilary Clinton was not yet announced as a participant in this summit. This, as of this writing, has now changed, making the political analysis offered previously even more interesting.

On August 30, 2009, general elections were held in Japan whose results can be described as nothing less - in my opinion - than a geopolitical earthquake of major proportions. The Liberal Democratic Party, which had ruled Japan more or less uninterruptedly since 1955 as more or less a shill of the Anglo-American geopolitical interest, was booted out of power in an election that gave the Democratic Party of Japan some 308 seats in the lower house of Japan's imperial Diet.

After that election, the news out of Japan - if one was following it closely - was nothing less than bizarre, geopolitically speaking, for there was talk of state visits of Emperor Akahito to Beijing (a geopolitical earthquake in an of itself since it signaled a rapprochment between the two countries), there were reports, as noted on this website, of Japanese water-powered cars being prepared for mass market production by the Japanese auto industry, there were quiet but very forceful requests on the part of the new Japanese government to the United States to move its military base on Okinawa.

Then, as I have noted previously on this website ("Japan's Moves Away from the US," April 19, 2011), this request was addressed by US Secretary of Defense in remarks that could be construed as little more than a threat, for he warned Japan that it could face "serious consequences" if it persisted in its request. Notably, those serious consequences were not detailed.

All this places the bearer bonds episode into a unique context, and here I indulge in some high speculation. The episode of the bearer bonds seems to me to fit, in some respects, the wider pattern that began to emerge in Japanese politics prior to the general elections of August 2009. If the bonds were legitimate, then it would appear that an event was staged to show to the world that the US financial system was in tatters; if illegimate counterfeits, then bigger issues are in play, and in either case, if the Japanese government had any role, in my opinion it would have had to be third hand, through the Yakuza or similar organization, to provide "plausible deniability."

It is interesting that the Japanese government's policy of reorientation toward Asia and away from the USA was not abated by the bearer bonds episode, but actually seemed to have grown with distance from the event, culminating in the general elections of 2009, and its formal requests to the USA to move its military bases. In this, Japan was mirroring recent geopolitical and financial moves of China and Russia away from the dollar and toward an Asian security relignment, best symbolized by the Shanghai accords. Add to this the possibility that the derivatives meltdown in America, the United Kingdom, and some European countries had a strong Chinese hand in the form of Dr. David Li, and the picture gets even murkier. Could the bearer bonds episode have been sponsored by the Chinese? Sure. The North Koreans? Yes. But the possibility that Japan had a role, given the wider political context, should not be ignored. It was a message, a strong one, but yet not so strong as to cause a financial panic, in the corridors of financial power in London and New York.

And all this puts the idea of "earthquake retaliation" into an even stronger possibility of reality, in my opinion, as a clear signal to Japan not to continue on its course of trying to break away and regain full sovereignty from the Anglo-American orbit. If so, then it was the action of desperate, panicked people.

But there are other aspects of the story to be considered. Keep that dial right here...

(To be continued)