
The Portuguese Bank Note Crisis of 1925 - MrBuddyCasino
https://en.wikipedia.org/wiki/Alves_dos_Reis#Banco_de_Portugal_plot
======
pjc50
This is a tremendous story; I was first told of it many years ago and it's
informed my thinking about authenticity ever since. I recently managed to find
a copy of "The Man Who Stole Portugal" to read the whole definitive account
with all its absurd details. The total obliviousness of the British printers
was key to the whole thing; once they'd been convinced they were dealing with
the Right Sort of Chap, who simply confirmed their prejudices that Portugal
was corrupt and disorganised enough to have banknotes collected in person.

~~~
andrepd
Exactly. The whole scheme relied on everybody, even his accomplices, truly
thinking that they were dealing with an official.

~~~
whatshisface
Like the Madoff case, the fact that the people around him benefited from the
scheme in the short run (including the printers, who made a profit on
printing) surely didn't hurt.

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andrepd
The most terrifying part:

> _The final phase of Reis ' scheme was to buy controlling interest in the
> Bank of Portugal, a step which would allow him to retroactively make his
> fiction about Bank approval true. With control of the bank, the entire
> counterfeiting could be swept under the rug, ensuring that there would never
> be any evidence of the fraud._

~~~
comboy
I recommend reading up on how FED got created.

~~~
ceejayoz
Is this something specific I'll find in
[https://en.wikipedia.org/wiki/History_of_the_Federal_Reserve...](https://en.wikipedia.org/wiki/History_of_the_Federal_Reserve_System),
or do I have to add "lizard people" to the search terms?

~~~
comboy
Wikipedia article is fine. All the facts are there, if you prefer more
narration I like this one:
[https://www.youtube.com/watch?v=mQUhJTxK5mA](https://www.youtube.com/watch?v=mQUhJTxK5mA)

~~~
ceejayoz
Could you clarify a couple _specific_ facts you're looking to point out,
instead of asking us to watch a 21 minute video from some random YouTuber?

~~~
comboy
I do recommend reading about it or watching, but what I was aiming at, is that
if Reis would have succeeded, it wouldn't really be much different from the
system that we have in the US today and how it got created. It was done with
perhaps a bit more finesse but it's basically the same thing.

edit: I can't reply below, but the text is not that long and it's about how
money works which is likely relevant to you regardless of your wealth. I
suppose short abstract would be that somebody with [power/money] decided to
create more money out of a thin air and succeeded. FED is not responsible
before congress, the president or pretty much anybody. I'm not interested in
conspiracy theories. The facts are wild enough.

~~~
ceejayoz
> FED is not responsible before congress, the president or pretty much
> anybody.

This is just silly.

The Fed reports to Congress twice annually. The Chair and Board of Governors
are nominated by the President and confirmed by the Senate. Their authority
stems from an act of Congress, which Congress can revise/repeal, and permits
the removal of the Chair or Governors by the President for cause.

For an example of Congress's authority over them:
[https://en.wikipedia.org/wiki/Federal_Reserve_Reform_Act_of_...](https://en.wikipedia.org/wiki/Federal_Reserve_Reform_Act_of_1977)

Hell, they're even subject to FOIA.
[https://www.federalreserve.gov/foia/about_foia.htm](https://www.federalreserve.gov/foia/about_foia.htm)

~~~
comboy
Just check any of those hearings. Quick googles:

[https://www.youtube.com/watch?v=n0NYBTkE1yQ](https://www.youtube.com/watch?v=n0NYBTkE1yQ)

[https://www.youtube.com/watch?v=dX2qvbznGKM](https://www.youtube.com/watch?v=dX2qvbznGKM)

You can easily find more. They can just flatly refuse to provide any info and
AFAIK there's still no law that would stop them. And as far as I understand
there won't be any, because money is power and they create money.

Notice that I'm not saying those are some associated evil doers (or that they
are not). Societies, economy, politics, it's all very complex. But I still
stand by what I wrote earlier.

~~~
ceejayoz
> They can just flatly refuse to provide any info and AFAIK there's still no
> law that would stop them.

So, taking your second clip as an example, Congress wrote a requirement to
disclose that information into Dodd-Frank about a year after that clip was
posted. It's actually a _perfect_ example of Congress regulating the Fed,
which you falsely allege is impossible.

[https://www.frbdiscountwindow.org/Pages/General-
Information/...](https://www.frbdiscountwindow.org/Pages/General-
Information/faq)

> In accordance with the provisions of the Dodd-Frank Wall Street Reform and
> Consumer Protection Act (Pub. L. No. 111-203), the Federal Reserve has
> changed its practices with respect to disclosure of discount window lending
> information. Effective for discount window loans (primary, secondary, and
> seasonal credit) extended on or after July 21, 2010, the Federal Reserve
> will publicly disclose the following information, generally about two years
> after a discount window loan is extended to a depository institution.

> The name and identifying details of the depository institution;

> The amount borrowed by the depository institution;

> The interest rate paid by the depository institution; and

> Information identifying the types and amounts of collateral pledged in
> connection with any discount window loan. This disclosure requirement does
> not apply to collateral pledged by depository institutions that do not
> borrow.

------
ovi256
The way he escalated faked credentials (the forged contract) into better
credentials is great and a topic of great interest for computer security
today. Using current political climate as a driver for operational security is
genius.

The plan to gain control of the central bank in order to clean traces of the
fraud was amazing too. How many other similar plans succeded ? Should we start
looking into changes of control of similar institutions in other countries ?

~~~
Iv
I like to point that Mario Draghi, the head of the European Central Bank, with
the notable task to deal with Greece's debt problem, used to be at the head of
Goldman Sach's division responsible of the loans toward countries exactly at
the time when Greece was cooking its books.

~~~
throwAway12343
Also worth pointing out Mario Draghis son was also a European Sovereign
Credit/Interest Rates trader at Morgan Stanley before he left to join a hedge
fund a few years back. No such thing as inside information outside of equity
markets!
[https://www.bloomberg.com/news/articles/2017-02-08/giacomo-d...](https://www.bloomberg.com/news/articles/2017-02-08/giacomo-
draghi-said-to-exit-morgan-stanley-for-hedge-fund-lmr)

------
ttsda
This is, interestingly, not very well known in Portugal. The whole story is
fascinating and the fact that he almost got away with it is very impressive.

Most people interested in national history know that the Estado Novo
dictatorship was brought to power due to the increasing distrust in the first
republic, but most don't know of this event, nor of the potentially very large
role it had in eroding that trust.

~~~
hobbes78
Not very well known? It was even the subject of a TV series some years ago!

[https://arquivos.rtp.pt/programas/alves-dos-
reis/](https://arquivos.rtp.pt/programas/alves-dos-reis/)

~~~
joaomacp
I'm portuguese and had never heard of it. That TV show is from 2001, so
already a bit old. Otherwise it's not a very talked-about story.

~~~
pcardoso
I'm in my early 40s and I remember when it was aired, but younger people were
probably watching kids TV at the time.

There were some other similar stories that made it to the TV, like Dona
Branca, Capitão Roby or Ballet Rose.

------
forinti
I can't recommend The Man Who Stole Portugal by Murray Teigh Bloom enough. I
loved this book.

The most curious aspect about all this is that he seems to have had a positive
influence on the Portuguese economy. It was a sort of QE. The subsequent
regime locked the Portuguese economy back into its ossified ways.

~~~
pierrebai
Reading the story, it seems to me that had he succeed in controling the
central bank, he would be a celebrated successful businessman and Portugal
would have been much better off.

I also find it interesting that the people who caused his downfalls were
acting legally but, in my view, were at least as morally corrupt as him. They
were poweful, rich men using their power, political ties, their journals and
journalist to vilify them and acting to protect their monopolies. It just
reinforces the fact that law, right and wrong are not very well tied together.
They're mostly there to keep the status quo for the elite.

------
ThePadawan
Reminds me of the plot of one of the episodes of Firefly.

The crew discovers (via underground connections) that a food production
facility has very lax security. In this universe, the vacuum-sealed nutrient
packs require authenticity much like bars of gold.

Now, they _could_ break in, steal a few pallets and sell it on the black
market - but obviously, the theft would be noticed, and the serial numbers
could be noted down as contraband etc..

What they _actually_ do is convince the night shift that they are not needed,
and convince the afternoon shift that the protagonists are actually the night
crew. They then produce the nutrient packs themselves and simply walk out with
them.

Since the night crew never showed up, there is no mismatch with their records,
since they obviously didn't produce anything.

~~~
Svip
As someone who has watched _Firefly_ quite a few times, I don't recall this
episode. The only thing that comes close is "Ariel", where they steal medical
supplies off a core world hospital, but that's straight up theft.

I don't recall all the details of the film _Serenity_ , but the plot described
does not ring a bell. Are you sure it was _Firefly_ you were thinking of?

Note: I have not read the comics, if it is one of them the plot appears.

~~~
ThePadawan
Oh my god, I remember now that this wasn't actually canon. I'm so sorry.

This was actually from a great crossover fanfiction, "Browncoat, Green Eyes"
[0].

It was so vibrant in front of my mental eye, too.

[0] [https://www.fanfiction.net/s/2857962/13/Browncoat-Green-
Eyes](https://www.fanfiction.net/s/2857962/13/Browncoat-Green-Eyes)

------
tomonocle
Ridiculous History covered this recently:
[https://player.fm/series/series-2148552/the-portuguese-
bank-...](https://player.fm/series/series-2148552/the-portuguese-bank-note-
crisis-how-one-lucky-forger-almost-destroyed-a-nations-economy)

Crazy how much he got away with, for so long, effectively just on confidence
and skill.

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Balanceinfinity
What amazes me is that at some point he didn't try and take his winnings off
the table - convert to pounds or dollars - and head for the hills.

~~~
andrepd
From tfa:

"Reis then proceeded to launder the bills into gold-backed foreign currencies
and smaller denominations of Portuguese currency."

So sounds like he did launder the money successfully, but he stuck around for
the final part of his plot: gain a controlling share in Banco de Portugal to
retroactively make his fiction become true.

~~~
segmondy
I think your parent was talking about the fact that he knew he was going to be
arrested and instead of fleeing like Hennies decided to fight it.

~~~
corford
Interestingly Reis may have made the right choice: Hennies ended up dying in
poverty before Reis even finished his prison term.

The only one that seems to have come out relatively unscathed was Marang,
everyone else finished badly (including the printer in London).

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marzell
Does anyone else feel it is an interesting coincidence that his name was Reis?
Until 1911 that was also the name for common currency in Portugal, then
replaced by Escudos at a rate of 1000:1. Is/was this a common name in
Portugal?

~~~
gdhbcc
It's a decently common surname

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elhudy
You can buy one of these "fake" bills for about $1300.

