April 15, 2012 By Joseph P. Farrell

We come now to the difficult part of this financial odyssey, the analysis and speculation on what might be going one with all these allegedly fake bearer bond scandals, one only of which, the Japanese one of 2009, was adequately reported in the major electronic media in the USA. This fact of media reportage may be a significant clue, as we shall see, in what may be going on.

Careful readers of the Bloomberg article referenced in part one of this series (No One Knows Truth About $300 Billion Bonds From Alleged Crash) will have noted two odd details mentioned in that article, whose significance can hardly be gainsaid:

"The largest U.S. Treasury bond ever issued had a face value of $10 million, says Gombar’s partner, Special Agent Michael Giovanniello. Only about $105.4 million in outstanding bearer bonds have yet to be cashed in, he says."

And then there's this: according to Special Agent Michael Giovanniello, "Counterfeit financial instruments reflect something that actually exists," which was precisely the point I have argued previously in my blogs about this topic. It is to be noted that according to the Bloomberg article, the chests are also accompanied with 1930s newspaper articles (to provide a "context" of authenticity). In addition to this, the counterfeiters have another trick up their sleeve:

"And in case the bearer should misplace an item and need to authenticate ownership at the bank, the chest comes with a microfilmed 'Federal Reserved Bond Inventory List.”'"

So note, in three of the four cases of bearer bond scandals (the Spanish, the Italian, and now the Filipino), we encounter the following similarities:

1) each involved gold-backed bearer bonds in high denominations;

2) each involved total values in the billions if not trillions of dollars;

3) each involved strongboxes from a Federal Reserve Branch bank;

4) all bonds were from 1934 and signed by Henry Morgenthau, Roosevelt's Secretary of the Treasury during his first administration;

5) the bonds are accompanied by "validating contexts" such as contemporaneous newspaper clippings, and in the Filipino case (and presumably in the Spanish and Italian cases), microfilmed "inventories" of the existing bearer bonds allegedly in circulation.

Thus, if the bonds are indeed faked, as is being maintained by government sources, then as noted in my previous blogs on the subject, someone is going to an extraordinary amount of expense and effort to perpetrate the "con", and given the patent inability of anyone to actually cash in the bonds and make any financial gain from them, one has to wonder why all the effort is being put into this in the first place.

So we return to the point noted above, namely, that Special Agent Giovanniello maintains that "Only about $105.4 million in outstanding bearer bonds have yet to be cashed in..." To this we may add another detail mentioned in the Bloomberg article:

"Although Treasury securities were shifted from paper to electronic form in the 1980s and the government stopped issuing bearer bonds in 1982, Gombar says the pre-World War II provenance of the bogus bonds, stamped with Morgenthau’s forged signature, remains a lure in the con artist’s tackle box."(Emphasis added)

These are profound clues, for in the first instance, any reader of this blog will realize immediately that the US debt began to mushroom precisely during the Roosevelt administration and grew to immense proportions after World War Two during the arms race, the precise period during which, if Gombar's statements about the cessation of the issuance of actual paper securities instruments in 1982 is taken at face value, means that the idea that a mere $105.4 of unredeemed bearer bonds remains outstanding is preposterous.

We are thus looking, as I have argued elsewhere, at the likelihood of a real, though hidden, tier of financing. We thus return to the point made at the beginning of this third part of the series, namely, that the Japanese Bearer Bond Scandal was the only one to receive major media coverage in this country. The reason would appear to be because in that instance, some of the alleged bonds were so self-evidently faked that the story could functionally serve to divert attention away from the existence of such a tier of financing, whereas in the cases of the Filipino, Italian, and Spanish instances, as noted in part two, the bonds do represent something that do actually exist.

Do these bonds represent a genuine counterfeting ring, based in the Philippines, as stated in the Bloomberg article? Yes, probably so. But one does not go to all this effort to counterfeit something without a market to exist, and the market exists, because there is in my opinion an underlying truth to the story.... but that must await part four...

...see you on the flip side...