According to Lord James of Blackheath speech in the UK House of Lords there's evidence that a $15 trillon conspiracy/fraud is going on.

In particular he says:

"Today, I have this quite frightening piece of paper [...] It is from the general audit office of the Federal Reserve in Washington-the real Federal Reserve-and its audit review to the end of July 2010 on the Federal Reserve Bank of New York. It has on it some 20 banks listed to which $16.115 trillion is outstanding in loans. That is the sore thumb that was being looked for by my noble friend Lord Sassoon. [...] most extraordinarily, not a penny of interest does the Federal Bank of New York want paid on that vast amount, $16 trillion. "

Does the apparent existence of those $16.115 trillion in outstanding loans suggest that something fishy in the way that Blackheath suggests goes on?

Bonus points: It would be nice to understand what Blackheath means with his argument about

"you put [the money] through an MTN-trading bank, which is then able to use the funds on the overnight European MTN trading market where they can earn between 1 per cent and 2.5 per cent profit per night. "

(MTN=medium-term notes)

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    refuted here: dailycaller.com/2012/02/25/… . See also ny.frb.org/banking/frscams.html where Riyadi is mentioned. Lord James has form in this area: see his previous foray with Foundation X – EnergyNumbers Feb 27 '12 at 7:06
  • @Daily Caller's argument: If the New York Fed runs a big scam then of course they will say "stop looking". Taking that as ultimate proof that the New York Fed isn't running a big scam shows that the author hasn't seriously thought about the issue before he wrote his article. - The fact that it's so easy to convince people that there is nothing worthwhile with bad arguments makes it more plausible that such a scam could exist. – Christian Feb 27 '12 at 16:14
  • it amazes me that such an astronomical amount of money does not attract international newspaper attention. A google search reveals few reportings - certainly not major newspaper. for such allegations, and that there were similar scams going back several years, why arent an investigation into wrongdoings as this has certainly grave implications and investors complaints, not to mention the FRB's own concern of always being the subject of scams? If there arent any results yet on the investigation, then why there isnt any notice by FRB or individuals refuting these stories, since they are the subj – user6299 Mar 2 '12 at 3:36

The documents that Blackheath cites are examples of forged documents being used in a scam known to the US Federal Reserve Bank.

Scam Involving Yohannes Riyadi and/or Wilfredo Saurin, November 2007

The Federal Reserve is aware of a fraudulent scam involving individuals using the names Yohannes Riyadi and/or Wilfredo Saurin, or persons claiming to be representatives of these two men. In a typical version of this scam, Mr. Riyadi and/or his delegates falsely claim that they have on deposit with the Federal Reserve Bank of New York several U.S. Treasury Checks issued to Mr. Riyadi amounting to billions of dollars.

The Federal Reserve Bank of New York has been contacted by several brokers and financial institutions worldwide inquiring about the validity of this fraudulent account documentation, which is being offered as collateral for lines of credit or other types of asset based financing. The fraudulent scheme includes multiple documents which purport to have the signatures of various Federal Reserve officials, including Chairman Ben Bernanke.

In some instances, individuals involved in this fraudulent scheme claim to have met with Federal Reserve officials and claim to have verified that the alleged account is in order. We have also learned that the fraud may include the purchase of certain documents by the introducing brokers.

[Community Wiki, because the link was supplied by @EnergyNumbers, and I just added a sentence to the beginning.]

  • Your answer deals with documents that I don't address in my question. Blackheath acknowledges in his speech that there is a scam. If someone runs a scam that created 15 trillion of money that's floating around in the European banking system saying "There's a scam, stop investigating the issue" makes no sense. - Saying it's "a scam known to the US Federal Reserve Bank" and citing the New York Fed who's accused of actually running the scam doesn't help but confuses the issue. If the charge of them running something illegitimate is true then of course they say: "Stop looking". – Christian Feb 27 '12 at 15:53
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    @Christian: The FRB claim that Riyadi has repeatedly falsely claimed to have billions of dollars in deposits with the FRB. Blackheath claims that Riyadi is making an extraordinary (and refuted) claim to have trillions of dollars in deposits with the HSBC. It seems clear that this is the same scam being repeated with different bank names. – Oddthinking Feb 27 '12 at 15:59
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    The FRB aren't saying "Stop investigating the issue." They are saying "Don't trust these forgeries. There are no such billions of dollars. Don't be taken in. It is a scam." – Oddthinking Feb 27 '12 at 16:02
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    His argument is hard to follow, but none of Blackheath's three possibilities seem to acknowledge that it is possible that the documents he holds are forgeries AND no government or bank is involved in wrongdoing. He doesn't seem to acknowledge that the reasons these deposits are unbelievably high is that they never happened. I can't help wonder how he would react if he received an email suggesting a Nigerian embassy official was smuggling money out of the country and needed his help... – Oddthinking Feb 27 '12 at 16:07
  • It would be easier to follow your argument when you wouldn't abbreviate "The Federal Reserve Bank of New York" with FRB. This is a complex story. It's easier to understand complex stories when one keeps the actors apart. – Christian Feb 27 '12 at 16:26

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