Tuesday, July 16, 2013

How The Rich Exploit Undocumented Domestic Workers

domestiwork7 15It would be wrong to assert that all people of means who hire undocumented workers exploit them.  A few we suspect are even generous, but in an age of greed in the United States there is plenty of evidence that many undocumented workers are -- from farmworkers to restaurant grunge workers to day laborers -- are knowingly exploited.
After all, the US employer has a big advantage over the undocumented worker: blackmail.  Even if the employer is committing a crime by not reporting payments to an undocumented worker -- which is often the case unless the worker has false papers -- the fear factor is sufficient to keep many of those in the US illegally willing to work for the most meager of wages, long hours and in poor working conditions.
In the past couple of years, one group of such vulnerable individuals forced to seek work in the US has become more vocal, even going public and exposing themselves to possible exportation: domestic workers and nannies.
As Michael Seifert, an organizer in Brownsville working for Mexican-American empowerment, wrote recently about the nascent movement of housekeepers and nannies from south of the border -- and advice that they provide to new arrivals:
“You can’t get a bank account and they will pay you in cash, but don’t let the woman who hires you keep your money for you. That would be her way of keeping you there as long as she wants.”
“Do not ever think that the family that you work for are your friends.”
“As soon as they start accusing you of stealing things, leave. That’s the way the ones who don’t have the guts to fire you get rid of you.”
These are warnings exchanged among the women, many who must leave their families behind in Mexico or Central America for salaries that may be as little as two dollars an hour without benefits.
Seifert, a former priest now a facilitator for the Marguerite Casey Foundation, recounts the plaintive plea of one forlorn housekeeper: “The best advice that I would give them is not to come. Dying of hunger in Mexico is better than the years of humiliation here. We are nobody here, nobody. So that is what I would tell them, that’s my advice.”
Describing a recent news conference that he attended, one of the slowly growing number held by undocumented workers "coming out" to describe their abuse, Seifert wrote:
As I studied a photograph of the press conference. I noticed, sitting in the crowd, a young woman that I knew. Her mother is a domestic worker who for years had suffered the humiliation of cleaning play rooms and bathing dogs and being on call, 24/7, for the families that she worked for....
I noticed how this young woman was leaning forward in her seat. I know that she must have been enthralled with the women who spoke that morning. It is always an extraordinary honor and privilege to witness, first hand, those who courageously and publicaly name the evil and the injustice practiced by those who live nearby, particularly when one is as vulnerable as poor woman in a land not her own.
Those who can afford to take advantage of the cheap labor and legal leverage they can use in hiring undocumented workers are among many of the same privileged Americans (along with the white working class who have seen their factories closed and wages drop -- as US-based global corporations have abandoned them) who oppose a path to citizenship for those whom they indifferently take advantage of.
The US may have legally ended the scourge of slavery when the North won the Civil War (although the racism of that Confederate legacy continues to scar America), but in the place of chains and ownership of humans we now have in our nation virtual slavery. 
As a nation we are going to build billions of dollars more in militarizing the Mexican border allegedly to keep us from the underpaid and overworked undocumented workers who are so coveted by those in financial power.
It's an inhumane hypocrisy that drains the soul and health of far too many lives.

Wal-Mart faceoff with DC fuels minimum wage debate

WASHINGTON (AP) — The bitter standoff between Wal-Mart and Washington, D.C. officials over the city’s effort to impose a higher minimum wage on big-box retailers is fueling a wider debate about how far cities should go in trying to raise pay for low-wage workers — and whether larger companies should be required to pay more.
Wal-Mart, the nation’s largest private employer, is fuming about a “living wage” bill approved by the D.C. Council that has an unusual twist — it would apply only to certain large retailers, forcing them to pay employees at least $12.50 an hour. That’s nearly 50 percent higher than city’s minimum wage of $8.25 an hour.  
The measure is being cheered by unions and worker advocates who have long complained about Wal-Mart’s wages and working conditions. Opponents call it an unfair tactic that will discourage companies from doing business in the city.
Wal-Mart has threatened, if the bill becomes law, to cancel plans for three of the six stores it hopes to build in some of the city’s poorest neighborhoods that are sorely in need of economic development. The measure is now before District of Columbia Mayor Vincent Gray.
Some economists say targeting large retailers or other industries that can afford to increase wages may be an effective way to raise pay to even higher levels than a broad-based minimum wage. The district’s bill applies to stores of 75,000 square feet or larger and annual corporate revenues of at least $1 billion.
“A large retailer can more easily absorb a pay hike than a corner store,” said Arindrajit Dube, an economics professor at the University of Massachusetts Amherst and a prominent supporter of raising the minimum wage. Large stores are “less likely to shut down or cut back on employment” in response to such an increase, he said.
But Dube cautioned that a targeted hike might make it harder for Wal-Mart and other big box stores to pass on the wage hike as a price increase since smaller retailers could still keep prices low. The minimum wage in the nation’s capital already is higher than the federal rate of $7.25 an hour. Other cities and states that have sought to raise the minimum wage above what is required have applied the hike to all businesses. San Jose, Calif., recently raised its minimum from $8 to $10 an hour and San Francisco’s rate of $10.55 an hour is the highest in the nation.
Still, no other city has singled out certain businesses for higher wage rates. The Chicago City Council tried to pass a similar measure seven years ago, but it was vetoed by then-mayor Richard M. Daley. Opponents have suggested the district’s bill may be subject to a legal challenge, but those prospects are uncertain.
President Barack Obama has proposed raising the federal minimum to $9 an hour and boosting it annually to keep pace with inflation. Many Wal-Mart workers already make $12.50 an hour — the rate set by the district’s bill — or more, but the average sales associate earns $8.81 per hour, according to IBISWorld, an independent market research group.
Wal-Mart spokesman Steven Restivo questioned why the district measure excluded unionized stores such as Safeway and Giant, suggesting the bill is specifically targeting non-union stores. He said most of the company’s 1.4 million workers are full-time and about 75 percent of the store’s management teams started as hourly associates. The average pay of full-time workers is between $50,000 and $170,000 a year, Restivo said.
David Neumark, an economics professor at the University of California Irvine, has argued that raising the minimum wage is bad for workers because it discourages employers from hiring and leads to fewer jobs. He said Wal-Mart’s low prices are more important to helping low-income workers.
“We can talk about wages, but if you can lower prices, that’s as good as raising wages,” Neumark said. “And of course helps a lot more people.” Forcing Wal-Mart to raise its salaries could create more gradual pressure on smaller businesses to boost wages over time, said Michael Reich, an economics professor at the University of California, Berkeley.
“A lot of people would be trying to get jobs at Wal-Mart,” he said. “That labor market pressure is going to raise wages at smaller stores, just because Wal-Mart is such a big employer.” But business groups call the idea outrageous and unfair.
“By any analysis this is a really flawed proposal that’s also very discriminatory,” said David French, senior vice president of the National Retail Federation. “The assumption is that retailers make a lot of money, therefore they can pay higher wages and therefore you can impose higher costs by fiat,” he said. “That doesn’t necessarily reflect reality.”
Retailers are typically low-margin businesses, French said. While they move a lot of products, he said retail profitability is less than many other similarly situated businesses. The district measure could also affect other retailers like Best Buy and Macy’s.
Business groups are also concerned a precedent-setting law in Washington, D.C., could see similar laws crop up elsewhere. “The political forces that have brought the D.C. Council to the brink of economic suicide are the same political forces at work in other cities,” said French.
There is ample precedent for living wage laws that impose minimum wages on companies doing business with state and local governments. More than 140 cities and counties across the country have enacted such laws that require businesses receiving government contracts or subsidies to pay workers a rate higher than the federal or state minimum wage.
In 2007, Maryland became the first state to enact a living wage bill, which currently requires employers with state contracts to pay either $12.49 an hour or $9.39 an hour, depending on where the services are performed.
Follow Sam Hananel on Twitter: http://twitter.com/SamHananelAP

Act Before the Bail-In: Now Is the Moment to Seize Public Banking

If you knew someone with a gambling problem, you probably would not give them your money to hold. If you knew that they had placed bets that were 30 to 70 times more than the amount of money they had, you would consider them totally reckless. If you knew that the money they were holding and betting with was borrowed money, other peoples’ money and not their own, you would probably conclude that they are hopelessly addicted to, well, yes: money.
Now picture this scenario:
You are a public official, such as a school business administrator, county treasurer, municipal finance manager, pension fund administrator, or anyone who has responsibility for protecting public money. You try to access the money and the transaction is denied.
You investigate why you cannot access money you know is in your account and you find out that the bank has failed and has been closed until further notice by the authorities. You also discover that the government will be confiscating part of your money in order to “stabilize” the bank.
You might be thinking, that “cannot happen here,” right? You placed the public monies you are charged with into a large bank because they are properly “collateralized” and therefore you believe these funds are safe. Now let’s settle for the truth: your money is at serious risk.
In a nutshell, what happened in Cyprus was that the banks were over-leveraged and the size of the liabilities of the banks exceeded the Gross Domestic Product (GDP) of the entire country of Cyprus. Given the fact that the “bail outs” of the large banks in 2008 were so politically unpopular, the European “troika” imposed a “bail in,” where customers with savings accounts were to have some of their savings seized (read: stolen) in order to stabilize the banks.
The losses to some accounts were as high as 60%. The banks were closed for 12 days, so account holders had no access to their money and once the banks reopened, they had only limited access to their money in order to protect the banks.
Was this plan by the “troika” — the European Central Bank, European Commission and International Monetary Fund — just a one-time event, or was it something more? It turns out, in fact, that the “bail in” was actually planned in advance, in 2012, at the G20 Financial Stability Board in Basel Switzerland, where the U.S. FDIC and the Bank of England created a joint paper outlining a confiscation scheme.
Under the FDIC/BOE joint paper, accounts could be seized by the failing bank and converted to stock equity as part of a “bail in” scheme — although the stock would be worthless because the bank would have already failed.
Don’t be deceived into thinking the “bail in” is a European heist. There is a plan to confiscate savings in New Zealand if necessary to save the banks. Canada also has a confiscation plan in the wings should their banks falter. The European Union has just reached an agreement where shareholders and depositors will be tapped to “bail in” any bank in trouble.
But let’s look at the U.S. and imagine what might happen here. Consider that our largest banks have derivative contracts with a notional value of more than $700 trillion (think $700,000 BILLION). The entire world GDP is only $70 trillion, therefore the liabilities of the big banks could not be covered by the entire GDP of the United States.
Does this sound similar to what happened in Cyprus? Does this sound similar to the gambler we discussed at the beginning? What is very important to keep in mind is that Cyprus is a small country and that much larger outside forces came in to “stabilize” the banks there. By contrast, if one (or more) of the large U.S. banks experiences a derivative failure, there is not enough money on the planet to “stabilize” them.
The derivatives are really nothing more than “bets” placed by the banks, and when (not if) these “bets” start going bad, the banks will be on the hook for their value. You need to know that these derivative “bets” have been given super-priority status in case of a bank bankruptcy. What this means is that the holders of these derivative contracts will have first priority for payment and that you as an individual or government entity will be placed at the back of line — as a bank creditor — should a large bank fail. The bottom line is that you will probably get little or nothing back.
Most people do not understand that once you give a bank your money, the money legally is no longer yours. Under the law, you are an unsecured creditor to the bank and are treated as such in any bankruptcy proceeding. As an individual or as a public official, if you have money in one of the big banks, you have essentially given your money to that gambler and now you are a creditor to the gambler.
This sort of loss has already happened with the MF Global collapse. While this was a futures trading company and not a bank, the blueprint for confiscations was tested here and with the Sentinel case the legal system upheld the customer losses. These trading accounts were supposed to be “segregated” accounts that belonged to the account holders, not MF Global. As an analogy, think of a “segregated” account as a safe deposit box at a bank: the contents belong to you, not the bank. In the MF Global collapse, the bank essentially gambled with the assets in the customers’ safe deposit boxes, and the legal system placed the creditors of the bank above the safe deposit box holders.
Now let’s take JP Morgan Chase, which has $1.1 trillion in deposits, and Bank of America, which also has over $1 trillion. Again, remember the gambler, Chase, has about $70 trillion in bets out there, but is holding only about $1 trillion in deposits and another trillion in assets. It has made bets with a value approximately 35 times all the money it has access to. Again, this is YOUR money the bank is betting with, not their money.
Bank of America also has about 30 times its assets in derivative bets. Citigroup and Wells Fargo each have over $900 billion in deposits and also many times their assets in derivative bets. If any one of these big banks fails, they are so interconnected that it is likely to bring down the other large banks. In fact, both Bank of America and JP Morgan Chase have moved their riskiest derivatives from their uninsured trading houses to the FDIC insured subsidiaries, which are their retail banks, putting the funds in those accounts at a significantly increased risk.
Once even one of these biggest banks experiences a derivatives meltdown, there will not be enough money in the FDIC or probably even the U.S. Treasury to cover the losses. Still think Cyprus cannot happen to you?
If you are a public official who has responsibility for protecting public money, you probably have that money deposited into an account with one of the largest banks. Do you still believe that money is safe? Are you doing your fiduciary duty to protect that money in the public interest? As a government official in charge of finances, what are your options?
One option is to start a public bank such as the Bank of North Dakota. First, public banks do not gamble with derivatives and the Bank of North Dakota thrived during the crisis of 2008. Not only will you get the safety of the money for which you have responsibility for, but other advantages to this approach include: the ability to provide interest free or low interest loans for public infrastructure projects, the ability to create jobs, generate revenue, and build up the local community.
Consider this: if you buy a home for $100,000, by the time you have paid the mortgage in full, the total cost will have been close to $300,000. Paying those who build the home and provide the raw materials $100,000, and paying the financiers $200,000 for money that was not even theirs, makes little sense, right? But the same principle applies if a state, county or municipality wants to build a road, school, bridge or other infrastructure: they need to go to Wall Street for financing at high interest rates.
However, they could just as easily form their own bank and finance the project at zero or near zero interest. With public banking, the projects would cost less than half and the finance costs would not be siphoned out of the community, impoverishing it while ending up on Wall Street or in Cayman Island tax shelters. In short, public banking ensures that the finance costs stay in the community.
Think of the things that could be accomplished if you could eliminate debt service as a line item in your budget. The money deposited in the public bank would be safe and would serve the local community. You could use the public bank to refinance existing debt at zero or near zero percent interest. You could lower tax rates. This idea has such appeal that currently there are initiatives in 20 states to start public banks.
If you are a public official with a fiduciary responsibility to protect public funds, one of these large banks fails and you lose the public’s money, think of the consequences once the public becomes aware that you did not heed the warnings of Cyprus. Think of the consequences when the public becomes aware that you did not consider alternatives to the big vulnerable banks.
It is time to bring home the money from Wall Street, where it is at risk. If there is a derivative crash, try meeting your payroll with stock equity (in a failed bank). The impact of not meeting a payroll will be both immediate and forceful. It is vital to get that money out of Wall Street before the next meltdown.
To those public officials who are truly interested in serving your communities, this is your moment. This is your time to step up. Be bold, be innovative, and empower your communities. You owe it to your fellow citizens, your children and your future. Visit this website  to learn more about the possibilities that public banking offer, to learn how to get started, and where to find help in implementation. You are not alone if you wish to make this happen.
Consider yourself warned: your money is not safe in the big banks. The MF Global losses, the Cyprus confiscations, the Sentinel case, the FDIC/BOE Joint Paper, and the plans in the European Union, Canada, New Zealand and Spain to raid private accounts — this should all be raising red flags. Personal accounts, as well as any school, municipal, county, and state funds that are deposited in any of the big banks are not safe. The plans for confiscation have already been developed, they have been approved, they are awaiting the next crisis.
So ask your public official in charge of finance where they keep YOUR taxpayer money. Ask them if they have researched the public banking option. Do not accept no for an answer. If they say that you do not understand these things, tell them to explain it to you. After all, this is your money that you worked so hard for. Tell them you won’t let big gamblers from Wall Street use YOUR personal or taxpayer money to cover THEIR losses — and you won’t stand for public officials risking your economic future with these gamblers, just because this is how it has been done in the past.
Republished with permission from: Truth Out

Bill Black: The Banks Have Blood on Their Hands

We invited Bill Black to return to explain whether the level of systemic risk due to fraud in our financial markets has improved or worsened since the dire situation he painted for us in early 2012. Sadly, it looks like abuse by the big players has only flourished since then.
In the U.S., our regulators have publicly embraced a “too big to prosecute” doctrine. We are restraining, underfunding, and dismantling regulatory oversight in the interest of short-term stability for the status quo. Which, as a criminologist, Black knows with certainty creates an environment where bad actors will act in their self-interest with assumed (and likely real, at this point) impunity.
If you can steal with impunity, as soon as you devastate regulation, you devastate the ability to prosecute. And as soon as that happens, in our jargon, in criminology, you make it a criminogenic environment. It just means an environment where the incentives are so perverse that they are going to produce widespread crime. In this context, it is going to be widespread accounting control fraud. And we see how few ethical restraints remain in the most elite banks.
You are looking at an underlying economic dynamic where fraud is a sure thing that will make people fabulously wealthy and where you select by your hiring, by your promotion, and by your firing for the ethically worst people at these firms that are committing the frauds. And so you have one of the largest banks in the world, HSBC, being the key ally to the most violent Mexican drug cartel, where they actually did so much business together that the drug cartel designed special boxes to put the cash in that they were laundering that fit exactly into the teller windows so that there would be no delay. This is the efficiency principle of drug laundering.
So these banks figuratively have the blood of over a thousand people on their hands.They are willing to fund people that murder and torture and behead folks. And they are willing to do that year after year, despite warnings from the regulators that they are doing this. And the regulators are not willing to actually take serious action until there has been “true devastation.”
And as time passes, our ability to bring effective justice – should we want to – atrophies:
I will tell you one of the things from being a former enforcement specialist: If you do not bring cases for year after year after year, it would be like a tennis player who stopped playing tournaments for ten years and never practices, and then he or she goes onto the court. What is going to happen?
They will get crushed by the opposition. So once you have given up enforcing the laws, I can tell you this with my lawyer hat on and former enforcement hat: You fear bringing these cases because you have allowed your skills to deteriorate so badly.
Given the sorry statements from officials like Lanny Breuer, who stepped down as the DOJ Criminal Division Chief earlier this year (he headed up the investigation of the banks and mortgage companies), we may already be at this stage.
Black sees a natural end to this systemic rot: a day where the bad actors no longer trust one another, and the system implodes upon itself:
I can tell you as a criminologist and as a former financial regulator, this is what you need to know about fraud: Fraud involves me, the fraudster, getting you to trust me. And then I betray your trust for my financial gain. And so there is no more destructive asset against trust than elite fraud.
So yes, we have been running a system under which the fraudsters get incredibly wealthy. And now they get incredibly wealthy and they do not even get prosecuted. And if there is a civil case – actually, they get the worst of all worlds. It sounds large for propaganda purposes, but all of us in finance know it is trivial. It is often literally a week of income, where their income is massively increased by the frauds.  The statistics show that there has been a general withdrawal of less sophisticated investors, in particular, from the marketplaces — and it’s because people do not trust the markets anymore.
Here is what people forget: After Lehman Brothers goes, the run that occurred was not Ma and Pa. The run that occurred that, for example, broke the buck in the money market mutual funds: that was a massive run of the most sophisticated financial players, where they were taking out hundreds of millions  or even tens of billions, in some cases – of money, in some cases, literally, in microseconds. In other words, bankers no longer trusted other bankers. And when that happens, markets do not simply become inefficient; they actually lock up. And that is what happened thousands of times after Lehman collapsed, because bankers would no longer trust other bankers’ evaluation of the assets.
And we have not even discussed derivatives to this point. Which is the not-800-pound gorilla, but the $8-trillion-ton-gorilla that is out there. So we already have the insanity of derivative trades in which both of us book a gain because we have different evaluations for the asset. So we have phenomenal paper gains that cannot be true. When the markets no longer trust each other, then those kinds of transactions do not work anymore, and there is no liquidity, and you are in the equivalent of trying to sell minority shareholder interest in a privately held corporation. How is that going to work out for you? Ever tried to do that?
So all across the globe, all across history, minority shareholders get completely screwed in that circumstance, when liquidity dries up. Well, the same thing can happen to much broader markets, including in particular the derivatives markets.
And if it does, when trust is interrupted, much less eroded, in the ways I have talked about it in the derivatives market, liquidity completely dries up. Anything that functions like a market-maker collapses, and you get whole financial systems that grind to a halt. And they do not happen just a few times. It can happen in thousands of markets roughly simultaneously.
You asked me earlier about Dodd Frank, and I said it had no coherent strategic vision. And a couple of the areas in which it had no coherent strategic vision we have talked about. It did not deal with the international competition-in-laxity. It did not deal with “too big to fail.” And it did not deal with derivatives. So I would say that was strike one, strike two, strike three.

On the News With Thom Hartmann: The Republican Sequester Will Kick 140,000 People Out of Their Homes

In screwed news… The Republican sequester is kicking people out on to the streets. According to the Department of Housing and Urban Development, 140,000 people won’t receive housing assistance because of $2 billion dollars in budget cuts. In Washington state, low-income residents are being forced to wait longer for section 8 housing vouchers, and people who recently qualified for aid are having their assistance rescinded. In New York City, Republican austerity will force the Housing Authority to take away rental vouchers from 1,200 people who already depend on them. Massive spending cuts have squeezed the budgets of similar programs all around our country, leading to longer waiting lists, revoked assistance, and reduced vouchers. All of which leave low-income Americans struggling to keep a roof over their heads. Federal officials have directed authorities to do what they can to avoid taking away housing assistance from those who rely on it, but they say it’s only a matter of time before Republican austerity measures will leave people out on the streets.
In the best of the rest of the news…
The SEC is actually putting a bankster on trial. The Securities and Exchange Commission says that while Fabrice Tourre worked at Goldman Sachs, he defrauded investors in a mortgage security scandal that ended up costing them billions. According to the SEC, Mr. Tourre tricked investors to buying into a portfolio that was hand picked by hedge fund billionaire John Paulson. Allegedly, while Paulson was selecting the securities to include in the portfolio, he simultaneously was making huge personal bets against them. Although charges have not been filed against John Paulson, Goldman Sachs agreed to a $550 million dollar settlement for its role in the scandal. The SEC is suing Tourre for fraud, negligence, and aiding and abetting Goldman Sachs in violating securities laws. This case represents the highest-profile trial of anyone responsible for the events leading up to the 2008 financial meltdown, and it could mean that a bankster will finally be found guilty for their crimes.
Three months ago, state lawmakers in Alaska approved a huge tax cut for the oil industry, and now state residents are demanding it be overturned. On Saturday, opponents of the tax cut turned in a petition with 50,000 signatures calling for a state-wide referendum vote on the new oil tax law. To qualify for the ballot initiative, organizers only needed about 30,000 signatures, which represents 10 percent of the total turnout in the last statewide election. Republican Governor Sean Parnell, and supporters of the oil-industry tax break, say it’s needed to lure oil development to Alaska. But, opponents say that the tax cuts are a huge giveaway, which will cost that state more than $4 billion dollars over the next five years. Former state senator, Vic Fischer, helped organize the petition, and said, “This bill that they passed is against the interests of Alaska.” Thanks to the hard work of Mr. Fischer and his fellow citizens, Alaskan residents will get their chance to vote on whether or not the oil industry deserves another tax break.
And finally… Congressman Mark Takano of California spent more than 20 years as a literature teacher before getting elected, and it turns out he doesn’t mind letting Republicans know that. Representative Takano recently “graded” a letter from GOP Representative Bill Cassidy, which was written to oppose the Senate’s recent vote on immigration reform. Rep. Rakano then posted a picture of the marked up letter online – with a big red “F” at the top. Although he gave Congressman Cassidy praise for a strong thesis statement, Representative Takano then repeatedly cited a lack of evidence for points made throughout the letter. Like any good teacher, Representative Mark Takano suggested ways to improve the letter, like addressing the pathway issue, including evidence, and removing tawdry allegations. Congressman Takano even offered his time, writing, “If you don’t understand the bill – come by my office and I’ll explain it.”

Treasury: Debt Has Been Exactly $16,699,396,000,000.00 for 56 Days -

(CNSNews.com) - According to the Daily Treasury Statement for July 12, which the U.S. Treasury released this afternoon, the federal debt that is currently subject to a legal limit of $16,699,421,095,673.60 has stood at exactly $16,699,396,000,000.00 for 56 straight days.
That means that for 56 straight days the federal debt has remained approximately $25 million below the legal limit.
Even though the portion of the federal debt that is subject to a legal limit has not changed in almost two months, the Treasury has continued to sell bills, notes and bonds at a value that exceeds the value of the bills, notes and bonds it has been redeeming.
The “public debt subject to limit”--as the Treasury calls the portion of the federal debt that is legally limited by Congress--first hit $16,699,396,000,000.00 at the close of business on May 17.
Up to that point in fiscal 2013, according to the Daily Treasury Statement, the Treasury had already redeemed approximately $4,776,995,000,000.00 in U.S. debt instruments (bills, notes and bonds) that had matured. At the same time, the Treasury had issued $5,354,508,000,000.00 in new debt instruments. That means that, on net, as of May 17, the part of the federal government’s debt publicly circulated in instruments likes bills, notes and bonds had increased $577,513,000,000 for the fiscal year.
As of the close of business on July 12, the latest day reported by the Treasury, the Treasury had redeemed approximately $5,848,194,000,000.00 in debt and issued approximately another $6,477,293,000,000.00—meaning the publicly circulated debt has increased by a net of $629,099,000,000 so far this year.
Thus, over the past 56 days, the net value of U.S. Treasury Securities circulating in the public has increased by $51.586 billion ($629,099,000,000 minus $577,513,000,000).
How could the value of extant U.S. Treasury Securities increase by $51.586 billion during a 56-day period when the federal government’s debt subject to the legal limit set by Congress has remained constant at $16,699,396,000,000.00—just $25 million below the legal limit?
On May 18, the day after the debt began its long stay at $16,699,396,000,000.00, Treasury Secretary Lew sent a letter to House Speaker John Boehner. In the letter, Lew said the Treasury would begin implementing what he called “the standard set of extraordinary measures” that allows the Treasury to continue to borrow and spend money even after it has hit the legal debt limit.
How many days did Lew think he could keep the debt just under the debt limit while the Treasury continued to borrow money?
“The effective duration of the extraordinary measures is subject to considerable uncertainty due to a variety of factors, including the unpredictability of tax receipts, changes in expenditure flows under the sequester, and the normal challenges of forecasting the payments and receipts of the U.S. government months into the future.”
Lew went on to say, however, that “it is now clear that the measures will not be exhausted until after Labor Day.”
If that prediction is correct, it will mean that the Daily Treasury Statement will continue to peg the “debt subject to limit” of the United States at exactly $16,699,396,000,000.00—or just $25 million below the legal limit—for another month and a half.
If the Treasury then says, sometime in September, that it can no longer hold the debt subject to limit at exactly $16,699,396,000,000.00 but must default on the bills of the federal government if the Republican-controlled House of Representatives does not vote to increase the legal debt limit, the Treasury will then be forcing a battle with the Republican House over the debt limit at the same time that the current continuing resolution, which funds the government until Sept. 30, is set to expire.
In his May 18 letter, Lew warned Boehner that the Obama administration would not negotiate with the House to curtail spending in exchange for giving Obama new authority to borrow additional money.
“I want to reemphasize what the president has said repeatedly regarding any threats to cause default in order to extract policy concessions from the Administration,” Lew warned. “We will not negotiate over the debt limit.”
Tomorrow, the U.S. Treasury will again report that the public debt subject to limit is exactly $16,699,396,000,000.00.
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Jurors picked in SEC fraud case against Goldman's Fabrice Tourre

Goldman Sachs’s Fabulous Fab Faces SEC Fraud Trial Today

Jurors picked in SEC fraud case against Goldman's Fabrice Tourre

Former Goldman Sachs bond trader Fabrice Tourre arrives at the Manhattan Federal Court in New York, July 15, 2013. REUTERS/Lucas Jackson
NEW YORK | Mon Jul 15, 2013 2:19pm EDT
(Reuters) - The trial of former Goldman Sachs Group Inc bond trader Fabrice Tourre began with the selection of five women and four men as jurors on Monday, in a case centering on alleged Wall Street wrongdoing during the financial crisis.
The U.S. Securities and Exchange Commission accuses Tourre, 34, of civil fraud, saying he misled investors in a mortgage investment called Abacus 2007-AC1. The case is the highest-profile to date stemming from the SEC's probe into the causes of the 2008 financial crisis.
The three-week trial stems from a lawsuit the SEC filed against Goldman Sachs and Tourre in 2010.

Labor Unions: Obamacare Will 'Shatter' Our Health Benefits, Cause 'Nightmare Scenarios'

‘The law as it stands will hurt millions of Americans’

The leaders conclude by stating that, “on behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”


Don’t blight the hand that feeds you: Stop eminent domain abuse

By Nick Sibilla
Guest Commentary
It’s been almost eight years since the U.S. Supreme Court’s notorious Kelo vs. New London decision. In one of the most controversial decisions of the modern era, the Supreme Court ruled that the government could forcibly seize private property and hand it over to other private owners, all under the guise of “economic development.” The decision was universally reviled, earning criticisms from everyone from Bill Clinton to Rush Limbaugh.
For her part, Justice Sandra Day O’Connor condemned the decision in her dissent: “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” Sadly, this “specter of condemnation” continues to intimidate property owners in Colorado.
Just this past September, Denver’s City Council voted to designate 29 city blocks as “blighted,” covering some 85 acres. Adding insult to injury, some of these blighted homes were Victorian houses that are well over a century old. Homeowners and business owners were furious at the designation, since the Denver Urban Renewal Authority now has the power to seize their property with eminent domain. One activist compared blight to “calling someone’s baby ugly.”
One month later in nearby Thornton, that city’s council voted unanimously for an urban renewal project that allows eminent domain for private development. Covering over 664 acres, 290 property parcels will be affected, including three churches, a nursing home, five apartment complexes and many restaurants and offices. Meanwhile, city officials in Fort Collins could seize a Sears with eminent domain.
What’s even more galling is that Colorado has reformed its eminent domain laws, but that reform was clearly not what it should have been if property rights are to be respected. In 2006, the General Assembly passed HB 1411, which amended the definition of “public use.” This was done to ban “the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenue.” Although that was a step in the right direction, HB 1411 still allows the government to seize any property deemed “blighted,” which is loosely defined. As we are now seeing in practice, that is a loophole large enough to drive a bulldozer through.
Under Colorado state law (C.R.S. 31-25-103), blight has a very broad definition: it’s an area that “substantially impairs or arrests the sound growth of the municipality, retards the provision of housing accommodations, or constitutes an economic or social liability, and is a menace to the public health, safety, morals, or welfare.” These are vague criteria which are easily exploited by overzealous redevelopment and urban renewal agencies.
On top of that, many of the factors that are used to trigger a blight designation are hardly menacing. In Denver, the historic neighborhood of Five Points was declared blighted because light rail is limiting street parking and there was “unusual topography,” like steep slopes and billboards. Meanwhile, those 664 acres in Thornton were declared blighted because there was a “lack of landscaping” and “cracked or uneven sidewalks.” Scary.
Colorado needs to significantly tighten its definition of blight. Not only is protecting property rights the right thing to do, it’s very popular among Democrats, Republicans and independents. Just this past November, Virginia voters overwhelmingly passed a constitutional amendment that puts strict limits on using eminent domain. By winning almost 75 percent of the vote, this amendment won far more votes than either Barack Obama or Mitt Romney — and in a swing state no less. Coloradans should not have to worry that their home or business could be next on the chopping block. Legislators must close the blight loophole.

Nick Sibilla is a fellow at the Institute for Justice, which litigated the Kelo case on behalf of homeowners and challenges eminent domain abuse nationwide.

Why Stephan Bogner Believes You Should Be 100% Invested in Precious Metals

Brian Sylvester of The Gold Report (7/15/13)
Now is the time to be brave, to buy when everyone else is selling, advises Stephan Bogner, analyst with Rockstone Research and CEO of bullion dealer Elementum International. Content to go against the grain, Bogner believes investors should be 100% invested in precious metals, both in physical metals and equities. He is interested not only in companies that are profitable now but also in ones that will someday be in the black again. In this interview with The Gold Report, he describes his ideal portfolio, which includes companies operating in far-flung places.
The Gold Report: You are more bullish on gold and silver now than when the bull market started in precious metals nearly 13 years ago. Yet Swiss bank UBS says the commodities super cycle is over.
Stephan Bogner: I was pretty bullish on gold and silver in 2002 when I completed my university diploma thesis on the exotic topic “Gold in a Macroeconomic Context.” I’m even more bullish today because the macroeconomics did not change; it got worse.
The fundamentals for gold and silver have never been as bullish as they are today. Money is much more likely to flow into the sector, as there’s no other place to hide from the increasing uncertainty and excesses of our financial and economic system. The recent crisis in Cyprus has shown that money in a bank account is not safe anymore and yet this does not even take inflation into account.
TGR: Have gold bulls like yourself underestimated the ability of the world’s largest banks and most powerful governments to control the gold price?
SB: Gold and silver are the only barometers of the health of our monetary system. Those who want to maintain the current system may try to manipulate the barometers so that the masses misinterpret the situation as long as possible. But prices will not remain low for long; the fundamentals of supply and demand will cause them to appreciate. Professor Dr. Hans Bocker, my diploma thesis supervisor and a renowned economics expert in Europe, emphasizes that nothing and no one are stronger than the market.
TGR: How should investors break down their portfolios for this new world order?
SB: Liquidate all available assets and move at least 70% out of the banking system by purchasing physical gold and silver bullion and storing it in an independent vault within a free zone of a safe country.
I do not recommend that anyone buy paper gold and silver in the form of certificates, options or futures. These are the most dangerous markets and the most manipulated. This includes exchange-traded funds (ETFs). You can’t be certain that they are really buying physical gold and silver with all the money you put into ETFs or that you will get the physical bullion when you want to sell. Professor Bocker, who is also the chairman of Elementum, emphasizes that it’s crucial to physically hold bullion in order to survive the upcoming financial crisis.
Mining equities fit very well into a portfolio consisting of physical bullion. You can pour some 70% of your funds into bullion as a crucial life insurance or security deposit and invest 30% of your total assets in mining equities, vehicles that typically generate exorbitant profits during a bull market in gold and silver.
TGR: What about cash? That leaves you with almost no liquidity in your portfolio.
SB: I consider investments in mining equities as cash equivalents. You can sell part of your holdings anytime and use that cash immediately.
TGR: Doesn’t the size of the precious metals equities market make it difficult to get in and out and reduce the market’s liquidity?
SB: You should diversify and focus on stocks that are liquid so you can get out quickly without much “noise.” Have a healthy diversification between junior and senior mining stocks and trade frequently within your core portfolio.
TGR: What are the basics of your thesis for precious metals equities?
SB: At Rockstone Research I not only analyze the general markets, I analyze junior and senior mining stocks. Mining provides unique possibilities for great profits. If you know a bit about geology, chemistry, metallurgy, technology and the general mining business, you can identify mining stocks on the verge of rising, regardless of the underlying metal prices.
The share price for a small exploration company with great drill results will rise even if gold is in a bear market. Keep in mind that increasingly fewer stocks will appreciate through the next collective upswing; many projects and management teams have not proven to be viable. These companies will go out of business and make the market a better, more consolidated place than it was during the last decade.
From an investor perspective, you can view the current temporary bear market as a good thing because only the best companies will survive. Finding these companies before other investors find them can be the chance of a lifetime. Now is the time to start buying mining equities when they are heavily discounted and priced down. Take all your courage, go out there and buy when everyone else is selling as if there was no tomorrow.
TGR: What do you think is an effective approach to buying these equities? Should investors buy on drops and pullbacks?
SB: Yes, buying on dips and pullbacks is a good way to get into an investment. If you are in the red with an investment, you can either try to be patient and wait for a general recovery or you can sell and buy different mining stocks now because the market has changed severely in the last seven months. It has created ridiculously low valuations of certain mining stocks that I would not have bought seven months ago. I am no fan of strict “buy and hold” approaches as whole markets, expectations and single opportunities change over time. Selling some positions even with a loss to buy others that appear to be much more of a bargain can be very lucrative.
TGR: What stories are you following?
SB: In a depressed mining market such as today’s with low metals prices and most producers operating unprofitably, investors already, and will increasingly, favor not only the few profitable mining companies that are left but also mining equities with the following six characteristics: 1) have experienced management, 2) are cashed-up, 3) have an advanced-stage exploration and/or mine development project, 4) have low capital expenditures (capex) to achieve high internal rates of return, 5) have high-grade deposits, 6) are operating in a stable mining jurisdiction.
Miners that meet all these premises in an outstanding way are First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE), Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE), Great Panther Silver Ltd. (GPR:TSX; GPL:NYSE.MKT), Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE), Silver Wheaton Corp. (SLW:TSX; SLW:NYSE), SilverCrest Mines Inc. (SVL:TSX.V; SVLC:NYSE.MKT) and Silver Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ). They all are mining companies that are flexible enough in size, operations design and corporate politics to steer through the extreme market phases we are currently experiencing. These companies are currently producing silver more or less profitably in resource-rich and underexplored regions of Latin America, enjoying some of the lowest production costs in the sector.
A Mexican silver producer that meets all of the above criteria, and is a prime example of how to do it right in today’s difficult mining environment, is Santacruz Silver Mining Ltd. (SCZ:TSX.V; 1SZ:FSE), which has succeeded in bringing into production a mine during the period of low metal prices in Q2/13. Average mill throughput currently “only” stands at around 120 tonnes per day (120 tpd), ramping up to 200 tpd in Q4/13 and 500 tpd in 2014 to achieve an output of around 2 million ounces (2 Moz) silver equivalent per year. When Rosario starts running at full capacity in 2014, silver prices may have recovered to higher levels. This could provide huge leverage on the share price because the company is currently producing relatively few ounces during this period of low silver prices, an estimated 2013 output of around 400,000–500,000 ounces (400–500 Koz) silver equivalent. Normally, a comparable 2 Moz per year silver mine requires $60–80 million ($60–80M) capex, but Santacruz only spent $10M to construct Rosario, and Santacruz is ready to do it again with its San Felipe project, for which a capex of only around $20M is anticipated.
San Felipe will be at feasibility stage by late 2013; three rigs are drilling as we speak. The initial drilling exceeds all expectations, exhibiting higher grades than historic drill results and superb core recoveries of around 95%, compared to historic records that show poor core recoveries of around 70%. Santacruz is getting the picture now, exploring and developing another world-class deposit that is easy to mine and highly profitable even during these depressed times.
Imagine how such a business will do during high silver prices and then try to imagine how the share price will develop from its current low levels. For the upcoming weeks and months, we anticipate an increased newsflow on San Felipe: the reporting of assays from around 10,000 meters (10,000m) of drilling. We expect San Felipe to start production in 2014, and it being much larger in scale than Rosario because Santacruz plans a 700 tpd mill throughput for its second mine.
The third mine on Santacruz’s agenda is Gavilanes, which is even higher grade than the average 200–250 grams/ton (200–250 g/t) silver at Rosario and San Felipe. Gavilanes has a historic Inferred resource of 1.2 million tons ore averaging 420 g/t silver, representing some 15+ Moz silver. However, this historic resource calculation is based only on 500m of the known 1,000m strike length of the single GSA vein that was drilled for only 3,200m in 1990. Santacruz has already successfully identified six other veins on Gavilanes with the Descubridora vein being the most promising one right now.
I speculate that Tahoe Resources Inc. (THO:TSX; TAHO:NYSE) will also become an exciting story; its world-class Escobal deposit in Guatemala is averaging around 490 g/t silver equivalent, resulting in fantastic all-in production costs estimated to be below $15/oz. That is quite remarkable considering that Hecla Mining Co. (HL:NYSE) is now pretty much underwater at $26/oz and Pan American Silver Corp. (PAA:TSX; PAAS:NASDAQ) at $22/oz. Santacruz is set to achieve all-in production costs of an estimated $11/oz by 2014 with its Rosario mine, and its two other silver deposits are ready to follow an even larger path into highly profitable and low-risk silver mining. Cash is king, even more notably in tough times, so I now look for newborn cash-flow machines that are poised to grow big during the next few years as I bet on much higher gold and silver prices.
While Santacruz, a profitable producer with huge growth potential, has a current market cap of only $85M, there are also very attractive undeveloped projects like those of MAG Silver Corp. (MAG:TSX; MVG:NYSE). The company has a market cap of only $350M but is sitting on a large, 100+ Moz high-grade silver deposit that may to turn out to become Mexico’s largest silver mine. MAG Silver is also in great shape to put into production other properties during the upcoming years. You want to look out for companies that right now are successfully developing world-class deposits; when production kicks off in a few years, metal prices are expected to be much higher than today.
TGR: What other companies are you following?
SB: Other stocks that I like in this respect are Roxgold Inc. (ROG:TSX.V) and Orezone Gold Corporation (ORE:TSX), with their high-grade and large gold deposits both located in Burkina Faso, as well as ASX-listed Ampella Mining Ltd. (AMX;ASX), which has the 3+ Moz Batie West Gold deposit, Burkina Faso’s largest undeveloped gold resource at a 1 g/t cut-off.
I also follow Central African low-cost gold producer Endeavour Mining Corp. (EDV:TSX; EVR:ASX) in Ghana and ASX-listed Tiger Resources Ltd. (TGS:TSX; TGS:ASX), which has an excellent exploration and production portfolio of properties strategically located on the world-renowned Katanga Copper Belt in the Democratic Republic of the Congo (DRC). Tiger is a well-run company with experienced and well-connected management successful in the highly lucrative but somewhat risky-appearing regions of the world where others fail on a regular basis. Tiger’s Kipoi stockpiles of high-grade copper have a market value of $500M+ with production costs in the area of only $0.30/pound targeted for 2014; the company’s other properties enjoy extremely good exploration potential.
Alacer Gold Corp. (ASR:TSX: AQG:ASX), with its gold operation in Turkey, is also an interesting story to follow. Management is working successfully on cutting costs on all fronts.
I am certain that these companies will not only survive the current slaughtering of mining equities but will also evolve into better and much more profitable companies than they would have been without this crash, thus maximizing shareholder value even more if metal prices recover substantially.
I also like Levon Resources Ltd. (LVN:TSX.V; L09:FSE; LVNVF:OTC), with its 400+ Moz Cordero silver deposit in Mexico; Silver Bull Resources Inc. (SVB:TSX; SVBL:NYSE.MKT) and Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCPK), with their 100+ Moz silver equivalent deposits;NOVAGOLD (NG:TSX; NG:NYSE.MKT), with its 40+ Moz Donlin gold deposit in Alaska; Prophecy Platinum Corp. (NKL:TSX.V; PNIKF:OTCPK; P94P:FSE), with its multimillion ounce platinum group metals deposit in the Yukon; and Western Potash Corp. (WPX:TSX.V), with Milestone being developed into a modern, cost-effective mine in Saskatchewan.
I also follow closely with great interest the development of Sunridge Gold Corp. (SGC:TSX.V), Sulliden Gold Corp. (SUE:TSX; SDDDF:OTCQX; SUE:BVL), Aurcana Corporation (AUN:TSX.V; AUNFF:OTCQX) andIMPACT Silver Corp. (IPT:TSX.V), and prospective juniors like Vendome Resources Corp. (VDR:TSX.V),Meadow Bay Gold Corp. (MAY:TSX.V; MAYGF:OTCQX), La Ronge Gold Corp. (LAR:TSX.V) andComstock Metals Ltd. (CSL:TSX.V).

Comstock recently made a promising discovery in the prolific White Gold district in the Yukon. The area has very similar geology and mineralization with Kinross Gold Corp.’s (K:TSX; KGC:NYSE) Golden Saddle deposit, which is just 10 kilometers (10km) to the northwest, as well with Kaminak Gold Corp.’s (KAM:TSX.V) Coffee project 40km to the south. Comstock’s initial drill results of grades of 1+ g/t gold over 80m+ exceeded all expectations.
Comstock just announced the assays of two stepout drillings: Hole 12 returned 2.1 g/t gold over 36m starting right at surface at 9m depth including an 11m interval averaging 3.2 g/t at 22m depth below surface. Hole 11 returned 43m averaging 1.4 g/t gold including an 13m intercept averaging 3.4 g/t. Both drill holes will increase the NI 43-101 resource base significantly as the footprint of the VG Zone has now been extended by some 350x350m, whereas the zone remains open in all directions. The results of five other drill holes will be released shortly.
I highly respect Comstock’s CEO, Rasool Mohammad, who is also the driving force behind La Ronge. La Ronge is exploring its Preview SW property in the prolific La Ronge Gold Belt of Saskatchewan. With an NI 43-101 Indicated and Inferred gold resource of nearly 400 Koz with an average grade of 2+ g/t and a 0.5 g/t cut-off, La Ronge is in a great position to expand the resource base of this deposit in the upcoming months. I am confident that Rasool will produce loads of positive drill reports that I anticipate will affect both stocks greatly in the near future.
TGR: Are there other companies you would like to talk about?
SB: Rubicon Minerals Corp. (RBY:NYSE.MKT; RMX:TSX) has successfully developed the highly interesting 3+ Moz Phoenix gold deposit toward the preliminary economic assessment level. The deposit is located in Red Lake, Ontario. Production can commence as soon as 2014 or whenever the gold price has recovered.
Another advanced gold project in its final permitting stage is Lydian International Ltd.’s (LYD:TSX) flagship Amulsar gold deposit in Armenia. It looks remarkable: simple and easy to mine, having a low capex of only $250M, yet valued at $1+ billion in the latest feasibility study.
Colossus Minerals Inc. (CSI:TSX; COLUF:OTCQX) owns an advanced-stage gold project in Brazil that may go into production at the right time within the next few years when metal prices have recovered, making such a large gold deposit increase in value even more.
Luna Gold Corp. (LGC:TSX) also has a well-advanced deposit in Brazil with great NI 43-101 upside potential targeting gold production starting at 125 Koz in 2014.
I follow Brazil Resources Inc. (BRI:TSX.V; BRIZF:OTCQX) closely because I like the management team around Chairman Amir Adnani and his well-established contacts around the world.
TGR: Do you follow rare earths?
SB: Yes. I am positive that Australia-based Alkane Resources Ltd. (ANLKY:OTCQX; ALK:ASX) will bring into production its Dubbo rare earths project in New South Wales in early 2016. Management is right on track demonstrating how to successfully develop a large deposit into a profitable mine quickly, namely with memorandums of understanding, agreements and strategic alliances. Dubbo represents a world-class deposit enriched with zirconium, hafnium, niobium, tantalum, yttrium, as well as light and heavy rare earths elements (REEs). Chinese production dominates these materials, providing over 90% of yearly supply and it is increasingly limiting its exports. Alkane already seems to have found the right partners to advance this project. The financing of around $1 billion is planned to be arranged by Sumitomo Mitsui Bank of Japan, Credit Suisse Australia and Sydney-based Petra Capital, and is expected to coincide with the final project approvals, allowing mine construction to commence in Q2/14.
Alkane’s Definite Feasibility Study of April 2013 shows Dubbo being a “technically and financially robust project.” A base case of a 20-year mine life gave a net present value of $1.23 billion, yet mine life is likely to be in excess of 70 years, which makes this deposit an important strategic asset for REE world supply. What makes Alkane a great investment today is that shareholders do not have to wait two or three years until REE production at Dubbo starts; shareholder value is likely to be increased substantially within the next few months as construction on the company’s Tomingley gold mine is underway and commissioning is anticipated in late 2013. With a resource of 800+ Koz, a head-grade of 2 g/t, a yearly gold production of around 50 Koz for a minimum of eight years and operating costs at only $1,000/oz, this project is set to generate important cash flow in the near future to advance the Dubbo project successfully without the need for excessive dilution.
Strategically, I also like Rare Element Resources Ltd. (RES:TSX; REE:NYSE.MKT), which has a 100% interest in the Bear Lodge property in Wyoming, U.S. This is one of the largest disseminated REE deposits in North America; it is high grade with favorable metallurgy and excellent infrastructure within one of the world’s best mining jurisdictions. When the time is right, it will most certainly be put into production.
Woulfe Mining Corp. (WOF:TSX.V) owns a large tungsten-molybdenum deposit in South Korea; I like these metals thanks to their great price appreciation potential in this decade.
I also like companies such as Rio Alto Mining Ltd. (RIO:TSX.V; RIO:BVL), whose stock experienced heavy selloffs during the last months, trading at around $2/share down from $6/share, and Monument Mining Ltd. (MMY:TSX.V), whose stock has been holding remarkably stable at the $0.30/share level assuming that strong hands try to not let the price go below this level. Both operators own world-class gold mines and infrastructure plus offer great growth potential for the upcoming years.
Rio Alto is reporting higher than expected head grades, which is a rare trend in today’s mining business—most seniors like BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK), Barrick Gold Corp. (ABX:TSX; ABX:NYSE) and Newmont Mining Corp. (NEM:NYSE) are struggling as their grades decrease more than expected and they are unable to keep up production levels while costs rise. Their only chance of maintaining market value is to acquire other resources, properties and companies. Rio Alto does not have such problems and stands well even in today’s depressed markets, thanks to the superb management around CEO Alex Black. The company has developed the La Arena deposit in Peru into a world-class gold mine with production costs well below $1,000/oz and an output of around 200 Koz/year. Rio Alto at $2/share seems like a great bargain and not only for the short term.
Monument plans to bring into production a second, polymetallic mine shortly, Mengapur, which I anticipate to emerge as a much larger than expected mine that may be ramped up with a strategic partner. I hope the partner is no one less than the government of Malaysia; management has established respectable relationships with high-ranking officials over the last years. A successful model would be Australia-based Tiger Resources’ 60/40%-partnership with the DRC government.
Golden Arrow is another company with great management relationships with governmental officials. Joe Grosso is doing it again big with this latest Argentinian success story that may become in the foreseeable future a very large and easily mineable resource of 100+ Moz silver equivalent with outstanding NI 43-101 upgrade potential. That’s the sort of junior mining stock with a $10–50M market cap that you want to be involved with from an early stage.
TGR: Do you want to talk about any other companies?
SB: Another great management story may be Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE), whose chief geologist, Dave Mathewson, explained to me in an interview in 2011 the background and geological settings of the Railroad property. Railroad is located just south of the productive Rain mine operated by Newmont in Nevada. Dave Mathewson discovered the Rain deposit when working for Newmont. This is the kind of unique management story that can be decisive when looking out for the right people who made the right choices at the right time. I am optimistic that Railroad eventually will turn out to be a larger gold deposit than Rain, which itself contains 6+ Moz. No one knows the rich but tough Carlin Trend better than Dave Mathewson.
Another deposit I value highly—in addition to being a potential takeover candidate—is Gold Reach Resources Ltd. (GRV:TSX.V). The company’s copper-gold-molybdenum deposit is adjacent to the renowned Huckleberry copper-molybdenum mine in British Columbia. Copper Mountain Mining Corp. (CUM:TSX) restarted a large copper mine near Princeton, 250km northeast of Vancouver, in 2011, producing some 80 million pounds per year. Mitsubishi Materials Corp. (MMC:FSE) has a 25% stake and mining giants like Xstrata Plc (XTA:LSE) are potentially looking for companies like these to take over, especially during times of ridiculously low market valuations that we have at the moment.
Some 3km south of the Copper Mountain mine and mill lies a large and quite prospective property that belongs to junior explorer Anglo-Canadian Mining Corp. (URA:TSX.V). I have been following this company for years, eagerly waiting to find out that it is actually sitting on a mineable porphyry copper gold deposit (or skarn) right on trend and right next to the prolific Copper Mountain porphyry plug.
Another such small junior mining stock that we followed was Urastar Gold Corp., which was active in Mexico where it held a highly prospective property adjacent to mining, infrastructure and large seniors. Urastar was acquired a few months ago by Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE).
The following is mining news wording I believe we are about to see increase notably with so many highly undervalued but highly prospective junior mining stocks being acquired basically for peanuts. This is sad but true in terms of shareholder value, yet still worth an investment nonetheless if you discover the ones to target at the right time:
“Under the terms of the Agreement, each Urastar shareholder will receive in exchange for each Urastar Share held, C$0.25 in cash. The cash consideration offered represents a premium of approximately 42.9% based on the closing price of the Urastar Shares on the TSX Venture Exchange (“TSXV”) of C$0.175 on March 25, 2013 and a premium of approximately 46.8% over the 20-day volume weighted average price of the Urastar Shares on the TSXV for the period ending March 25, 2013. The transaction value on a basic shares outstanding basis, and assuming exercise of in-the-money share purchase warrants, is approximately C$10.70 million.”
TGR: Thank you for speaking with us today.
Stephan Bogner is a mining analyst at Rockstone Research, where he has independently analyzed capital markets and resource stocks for more than 11 years. He is also CEO of Elementum International AG of Switzerland. Bogner earned his degree in economics in 2004 at the International School of Management in Dortmund, Germany. He spent five years in Dubai brokering and reselling physical commodities and now resides in Zurich, Switzerland.
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1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Santacruz Silver Mining Ltd., Colossus Minerals Inc., Golden Arrow Resources Corp., Gold Standard Ventures Corp., Sunridge Gold Corp., Rubicon Minerals Corp., MAG Silver Corp., Tahoe Resources Inc., Roxgold Inc., Silver Bull Resources Inc. NOVAGOLD, Prophecy Platinum Corp., Sulliden Gold Corp., IMPACT Silver Corp., Lydian International Ltd., Brazil Resources Inc., Alkane Resources Ltd., Silver Standard Resources Inc., Fortuna Silver Mines Inc., SilverCrest Mines Inc., Comstock Metals Ltd. and Great Panther Silver Ltd. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Stephan Bogner: I or my family own shares of the following companies mentioned in this interview: All except Credit Suisse, Mitsubishi Materials Corp., Sumitomo Mitsui Bank of Japan, Xstrata Plc, BHP Billiton Ltd., Barrick Gold Corp., Newmont Mining Corp., Hecla Mining Corp. and Urastar Gold Corp. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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PATRIOTS VS TYRANTS: The Worldwide Banker Dictatorship – Harley Schlanger

Harley Schlanger, historian and national Spokesperson for Larouchepac.com joins us to discuss the progress in reimplementing the 1933 Glass-Steagall Act in the United States. Harley reminds us that the very history of these United States is the never-ending fight between lovers of liberty and the tyrants who want to destroy it. We must tie down the Banksters and prevent further crimes against humanity, or live under a global banking government with no checks and no balances. Our choice is clear. We also talk about world events, Syria, Egypt and much more.

Goodbye Full-Time Jobs, Hello Part-Time Jobs, R.I.P. Middle Class

by Michael Snyder 
A fundamental shift is taking place in the U.S. economy.  In fact, this transition is rapidly picking up momentum and is in danger of becoming an avalanche.  The percentage of full-time jobs in our economy is steadily declining and the percentage of part-time jobs is steadily increasing.  This is not a recent phenomenon, but now there are several factors which are accelerating this trend.  One of them is Obamacare.  The truth is that Obamacare actually gives business owners incentive to cut hours and turn full-time workers into part-time workers, and according to the Wall Street Journal and other prominent publications this is already happening all over the United States.  Perhaps this is part of the reasons why the U.S. economy actually lost 240,000full-time jobs last month.
In a recent article entitled “Restaurant Shift: Sorry, Just Part-Time“, the Wall Street Journal explained the choices that employers are faced with thanks to Obamacare…
The Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Some companies have said the requirement could increase their costs significantly, although others have played down the potential hit.
The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.
Thankfully the implementation of this aspect of Obamacare was recently delayed, but a lot of employers are saying that it won’t make a difference.  They know that it is coming at some point, and so they are already making the changes that they feel they will need to make in order to comply with the law…
Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern.
“Does the delay change anything for us? Absolutely not,” Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. “We won’t start hiring full-time people.”
This is very sad, because we have already been witnessing a steady erosion of “breadwinner jobs” in this country.
It is very, very difficult to support a family if you just have a part-time job or a temp job.  But those are the jobs that our economy is producing these days.
In fact, if you can believe it, the second largest employer in the United States is now a temp agency.  Kelly Services is actually the second largest employer in the country after Wal-Mart.
Isn’t that crazy?
And full-time employment continues to lag far, far behind part-time employment.  The number of part-time workers in the United States recently hit a brand new all-time record high, but the number of full-time workers remains nearly 6 million below the old record that was set back in 2007.
For much more on this, please see my previous article entitled “15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast“.

At this point, employees are increasingly considered to be expendable “liabilities” that can be dumped the moment that their usefulness is over.
For example, employees at one restaurant down in Florida were recently fired by text message
It’s bad enough losing your job, but more than a dozen angry employees say they were fired from a central Florida restaurant via text message.
Employees at Barducci’s Italian Bistro said they lost their jobs without notice after the restaurant suddenly closed and are still waiting for their paychecks.
This shift that we are witnessing is fundamentally changing the relationship between employers and employees in the United States.  The balance of power has moved very much toward the employers.
Most employers realize that there is intense competition for most jobs these days.  If you get tired of your job, your employer can easily go out and find a whole bunch of other people who would be thrilled to fill it.
So why has the balance of power shifted so dramatically?
Well, for one thing we have allowed millions upon millions of good paying jobs to be shipped out of the country.  Now American workers literally have to compete for jobs with workers on the other side of the planet that live in nations where it is legal to pay slave labor wages.
This should have never happened, but voters in both major political parties kept voting for politicians that were doing this to us.
Now we all pay the price.
Another factor is the rapid advancement of technology.
These days, businesses are trying use machines, computers and robots to automate just about everything that they can.  The following example comes from a recent Business Insider article
On a windy morning in California’s Salinas Valley, a tractor pulled a wheeled, metal contraption over rows of budding iceberg lettuce plants. Engineers from Silicon Valley tinkered with the software on a laptop to ensure the machine was eliminating the right leafy buds.
The engineers were testing the Lettuce Bot, a machine that can “thin” a field of lettuce in the time it takes about 20 workers to do the job by hand.
The thinner is part of a new generation of machines that target the last frontier of agricultural mechanization — fruits and vegetables destined for the fresh market, not processing, which have thus far resisted mechanization because they’re sensitive to bruising.
So what happens when the big corporations that dominate our economy are able to automate everything?
What will the rest of us do?
How will the middle class survive if they don’t need us to work for them?
Over the past couple of centuries, we have witnessed several fundamental shifts in our economy.
Once upon a time, a very high percentage of Americans worked for themselves.  There were millions of farmers, ranchers, small store owners, etc.
But then the industrial revolution kicked in to high gear and big corporations started to gain more power.  Millions of Americans went to work for these big corporations, but it was okay because they paid us good wages to work in their factories and the middle class thrived.
Unfortunately, the big corporations have realized that things have changed and that they don’t really need us anymore.  They can replace us with technology or with super cheap labor overseas.
So that leaves the rest of us in quite a quandry.  Very few of us own our own businesses.  In fact, the percentage of self-employed workers in the United States is at an all-time record low.  And the number of us that are needed by the monolithic corporations that dominate our system is dropping by the day.
All of this is very bad news for the middle class.  The only thing that most of us have to offer is our labor, and the value of our labor is continually declining.
Unless something dramatic happens, the future of the middle class looks very bleak.

eport: Brinks Vaults Are Being Depleted: “This Has the Appearance of a Run On the Bank”

The price of gold and silver has seen a massive decline as of late, prompting one analyst to suggest that there is no compelling fundamental reason to own precious metals and the only thing investors can do now is “hope and panic, in that order.”
But while current prices and technical charts may leave some with the feeling that gold’s bull run is over and the bubble has popped, others are scooping up as much yellow and silver metal as they can find, and in some cases they’re doing it by the tens of thousands of ounces.
According to recent data from the Chicago Mercantile Exchange, private investors are rapidly exchanging their paper holdings and turning them into deliverable physical assets, an indication that the purported ‘free market’ price for gold on global exchanges is grossly undervalued.
Brinks is now being depleted.  
They have gone from 447,199 on July 3rd to 134,525 on July 9th which is a drop of 312,674 oz.
If this is correct, then this is a decline of 70 percent in the gold held in private accounts at Brinks in just one week.
If this is data is correct, it would not be too much of a stretch to say that this has the appearance of ‘a run on the bank.’
Jesse’s Cafe Americain via Steve Quayle
Commodities guru Doug Casey recently noted that it costs mining companies about $1200 an ounce to get gold out of the ground. Given that the price of gold is hovering right at that amount as of this writing it should be obvious that the going price for gold at this time is not sustainable. Either demand has waned and gold producers are going to be closing up shop soon because their business models will not be able to function under these prices, or we’re set to see prices bounce back significantly in coming months and years.

If we are to believe that investors are losing interest in precious metals, then how is it possible that major gold retailers like JM Bullion were reporting weeks-long delivery delays citing “astounding volume” from the retail sector?
Even the US Mint has seen such high demand (118% increase year-over-year) that they have actually suspended the sale of some of their gold American Eagles because they are unable to source the gold blanks required to strike the coins.
Obviously what mainstream analysts are reporting and what is happening in the real world are two different things, as evidenced by the large scale physical deliveries being reported around the globe.
The price of gold may have dropped 25% in the last 12 months, but a similar scenario unfolded from 1975 to 1976 when gold dropped nearly 50%, only to recover and go to new highs, quadrupling in value over the subsequent five years.
We’ve noted previously that the volatility in financial markets will be so extreme that even gold investors will be shaken.
If there’s one thing that should be clear, it’s that the global economic crisis is nowhere close to be resolved, and recovery could be a decade or more away. In fact, chances are we have yet to see the worst of it.
It is during environments exactly like these – when the people fear their government and lose confidence in its ability to mitigate crises – that precious metals become the investment asset of last resort.
It has happened throughout history. And it’s happening right now.