Japanese Suitcase ‘Worth’ More Than Singapore

So you’re a border guard working on the trains travelling across the Swiss frontiers and today it’s pretty busy. There are people scurrying everywhere and there’s chaos as the train stops at Geneva. People join and people leave – it’s a real hub on the rail network with thousands taking this particular train so as to be at their desks on time in the multitude of banks which dominate the city’s employment. As the joining commuters settle down into their seats, the train pulls out and you start your checks. Although Switzerland scrapped border controls in 2008, you still have to check for non-EEC citizens who have sneaked into the country and in particular, those carrying large amounts of currency which might indicate a money-laundering operation.

As you wander along the train looking for likely suspects you notice a couple of eastern-looking gentlemen shifting uncomfortably in their seats. You ask to check their passports and they just shrug. You ask them to open the suitcase they have with them and again they are reluctant so you call for a couple of your colleagues on your radio. Once you have the necessary manpower in place you take the suitcase and open it. There are no clothes in it. No shoes or toiletries. Nothing – except $134 billion of US Government bonds hidden in a secret compartment. Note – I said BILLION !

I’ve dressed up the story a bit but last week two Japanese guys were caught with $134 billion of US government bonds in their suitcase. Now $134 billion is more than the total financial output (GDP) of countries like New Zealand and Singapore (i.e. if you add up all the sales and output made in a year the that is GDP) so it was quite a sizeable sum – especially for two diminutive Japanese guys to be wandering about with, secreted in a suitcase.

The story will undoubtedly be hushed up but already there are claims and counterclaims.

The claim is that the Japanese wanted to flog some of their huge pile of American debt (a bond is just a Government issued IOU which pays interest and can be traded like any stock or share) but why they were sneaking into Switzerland to do it is anybody’s guess. I know that Swiss banks are notoriously secretive but an amount of that size would obviously come to the notice of the regulatory authorities pretty quickly.

The Americans have said the bonds were fakes but $134 billion? I could understand a couple of crooks maybe doing say $200million in counterfeit bonds but $134 billion – no way!

The problem behind all this is that America doesn’t like huge tranches of its debt being sold without being consulted. If $134b had hit the markets, the dollar would have plunged, banks would have panicked and then they would have sold their US Government debt and before you know it there’s a full blown financial crisis going on.

We’ll probably never hear the truth behind the story but it makes my brother’s efforts to carry £2000 over to France for me last weekend, pale into total insignificance!