Here's an update to vhf's discovery of the news about those US treasury bonds that were found during the attempt to smuggle them into Switzerland. No news in the US financial press about this has raised more than one eyebrow. Don't have to wonder too much about why.

Looks like forgeries are indeed it, or at least that is the official line. So, coast is clear for the US treasury, no egg on face. Now the press can now talk about it. Superficially, anyway.

Still a mystery to me, since the whole thing is too unreal. Probably get the real story in the Italian press.

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U.S. Says Treasury Bonds Seized in Italy Are ‘Clearly Fakes’

By Vincent Del Giudice

June 18 (Bloomberg) -- U.S. government bonds found in the false bottom of a suitcase carried by two Japanese travelers attempting to cross into Switzerland are fake, a Treasury spokesman said.

“They’re clearly fakes,” Stephen Meyerhardt, a spokesman for the U.S. Bureau of the Public Debt in Washington, said yesterday. “That’s beyond the fact that the face value is far beyond what’s out there.”

Italy’s financial police last week said they asked the U.S. Securities and Exchange Commission to authenticate the seized bonds, with a face value of more than $134 billion. Colonel Rodolfo Mecarelli of the Guardia di Finanza in Como, Italy, said the securities, seized in Chiasso, Italy, were probably forgeries.

Meyerhardt said Treasury records show an estimated $105.4 billion in bearer bonds have yet to be surrendered. Most matured more than five years ago, he said. The Treasury stopped issuing bearer bonds in 1982, Meyerhardt said.

Had the notes been genuine, the pair would have been the U.S. government’s fourth-biggest creditor, ahead of the U.K. with $128 billion of U.S. debt and just behind Russia, which is owed $138 billion.

According to the Italian authorities, the seized notes included 249 securities with a face value of $500 million each and 10 additional bonds with a value of more than $1 billion, as well as securities purported to be “Kennedy” bonds. Meyerhardt said no such securities exist.

Nowadays, Treasury securities are issued electronically. The U.S. started converting all of its marketable debt from paper to electronic form in the 1980s.

To contact the reporters on this story: Vincent Del Giudice in Washington at vdelgiudice@bloomberg.net

Last Updated: June 18, 2009 00:01 EDT

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