Temelín: Strategic Growth Project for Russian-Czech Relations

Czech Prime Minister Petr Nečas arrived in Russia on a four-day working visit late May, 2013. Trade and energy policy are among the topical issues for Prague and Moscow – 6% increase in turnover is good news for both parties. Infrastructure investment projects like Temelín nuclear power plant could be the cornerstone of successful bilateral cooperation. Temelín NPP means not only thousands new jobs, but also affordable energy for the Czech industry. It can truly be a safety net in times of European economic meltdown.

(Photo: www.ceskapozice.cz)

By Igor Alexeev
Intellihub.com
May 30, 2013
Recent visit of Czech Prime Minister Petr Nečas to Russia resulted in signing a number of memorandums and agreements on hydropower, combined-cycle power plants and other large-scale projects of mechanical engineering. Partnership for high-tech development also includes one crucial nuclear energy project in a small village of Temelín in southern Bohemia. The Temelín Nuclear Power Plant, with its 2,000 MW of installed capacity, is the largest power resource in the Czech Republic and a profitable business opportunity. The stakes are high: tender winner will have to double NPP’s energy output building two new reactors by 2017. Both units are to be completed in 2025 and should produce electricity for 60 years. Czech industrial sector is in need of stable and affordable energy source to boost national GDP in the middle of crisis-stricken European Union (now industry accounts for 40% of Czech GDP and employment).
The French company Areva participated in the tender process through last October but had to leave it. ČEZ Group, the policy-maker in the Czech Republic on energy issues, eliminated Areva’s bid citing serious mistakes. The French are currently trying to challenge the decision in the Office for the Protection of Competition (UOHS), but Czech experts believe Areva’s chances to open an antitrust procedure are rather slim. Eventually US-Japanese corporation “Westinghouse-Toshiba” and Russian-Czech engineering consortium of “Skoda JS”, “Atomstroyexport” and “Gidropress” have come through to the tender’s finals.
The Czech financial regulator is now working to bring down the prices. On a more subtle level there is also a political rivalry going on between Prime Minister Nečas (Civic Democrats, “ODS”) and Finance Minister Miroslav Kalousek (Conservative “TOP 09”). “I must say that offers of both bidders surprised us very unpleasantly in terms of price,” Kalousek said to the “Hospodarske Noviny” newspaper earlier in May.
“The tender will be transparent and the best bid will win,” Prime Minister Nečas announced in Moscow on May, 28. The Czech Republic “absolutely welcomes the participation of the Russian-Czech MIR.1200 consortium in tender procedures to complete the two Temelín NPP units,” he confirmed. Russia treats Czech Republic as a traditional partner and plays with an open hand. “If we are able to prove the solidity of our position, Czech companies will receive very significant orders worth up to 6 billion euro,” Russia’s Prime Minister Dmitry Medvedev said to the press. Considering the volume of Czech business community’s net investments to Russia, this highly pragmatic scenario appears to be the most probable. First, the power core of Temelín NPP that needs an upgrade is the Soviet- designed VVER1000 reactor. Russia can ensure consistency of operations which is extremely important in such technology-intensive project. Second, Russia’s engineering solutions are well-known to be robust and stable – an important feature in densely populated Europe.
However, the US-Japanese nuclear giant Westinghouse-Toshiba does not lose hope despite its shattered public image after the Fukushima tragedy. Westinghouse’s European branch vice-president Mike Kirst said in reaction to Dmitry Medvedev’s words that the corporation would not officially comment on Russia’s move. This strategy of silence could be a part of a cunning PR strategy. The US has a long history of aggressive unofficial lobbying for its transnational corporations[1]. For example, Monsanto’s notorious PR-activity abroad has recently caused global citizen protests.
In December, 2012 Hillary Clinton visited Prague in attempt to save the situation for Westinghouse. “Who reaps the benefits?” – asked Democratic Party activist Tom Gallagher half a year ago following Czech-US talks. Westinghouse-Toshiba spends about $2,000,000 annually lobbying Washington to remind the “right” people on the Hill that it is a loyal American company. The US State Department’s international lobbying for the corporation could be easily explained to the American citizens as “protecting their national interests”. When some see it is right to invest in publicity, inhabitants of small towns and villages in Bohemia, where reactors are planned to being built, would obviously prefer construction companies to put money on modernsafety actuation systems.
The final contract is to be signed by the end of 2013, but the licensing and design phase will run 44 months after the agreement’s signing. It should be a matter of national consensus in the Czech Republic that Temelín NPP is a too serious strategic issue to be a subject of disputes between two ruling parties. Prime Minister Nečas guaranteed the tender transparency, therefore market will decide on the future of Temelín.
*****

Top 10 lies told by McDonald's CEO at annual shareholders' meeting

Cross-posted from Alternet.
Last week at McDonald’s annual shareholder’s meeting, CEO Don Thompson got caught off-guard when a team of 15 advocates, led by Corporate Accountability International, descended upon corporate headquarters to question the fast food leader’s relentless exploitation of children and communities of color.

Leading the way was Tanya Fields, executive director of the BLK ProjeK and mother of four. In her dramatic statement, Fields described her neighborhood in the Bronx as a “food swamp filled with corner stores and fast food,” noting that with three outlets within walking distance of her home, “McDonald’s happens to be the biggest alligator in that swamp.” She concluded: “Sorry, but four apple slices in plastic packaging won’t cut it.”

McDonald’s CEO Don Thompson’s response was to ignore Fields altogether and instead give the usual cheerleading speech about all the great things his company was doing. Then he took questions, and the fun really began.

Here are the top 10 lies told by Don Thompson during the Q&A session:

In response to 9-year-old Hannah Robertson (read her statement):

1) “First off, we don’t sell junk food, Hannah.”

Where to even begin? A quick look at the menu belies that statement, while this “big breakfast” item packs more than 1,000 calories: half a day’s worth.

Thompson tried this spin more than once:

2) “We sell lots of fruits and veggies at McDonald’s and we sell side salads for a dollar on the dollar menu.”

In 2011, McDonald’s made a big deal about how it would automatically include apple slices in Happy Meals. Considering that McDonald’s is now the single largest purchaser of apples in the nation, that may qualify as “lots of fruit.” Then again, the company is also the single largest purchaser of both beef (a billion pounds a year) and potatoes. I suppose Thompson would count fries as a vegetable?

While it’s true McDonald’s sells a side salad on its dollar menu (one of 13 items), if you only have a one dollar to spend, what’s the likelihood you would choose a small salad over the 310-calorie “grilled onion cheddar burger”?

3) Claiming “chicken nugget Happy Meals and fat-free milk” are healthy.

According to the McDonald’s website, Chicken McNuggets contain roughly 30 ingredients, including: sodium phosphates, sodium acid pyrophosphate, sodium aluminum phosphate, monocalcium phosphate and calcium lactate.

The “fat-free milk” Thompson touted numerous times is actually chocolate milk, containing 10 grams of added sugar, which as registered dietitian Andy Bellatti told me, is more than 75 percent of a day's worth for children ages 4-8 (per the American Heart Association’s guidelines). He added: “As it is, American children are consuming an exorbitant amount of sugar; no one should be encouraging sugary beverages simply because they contain calcium and vitamin D.”

Next, in response to a question from Corporate Accountability International about how McDonald’s is getting kicked out of hospitals over obvious concerns about the conflicting messages, Thompson claimed:

4) “Many hospitals have asked us to come back in or to never leave.”

Thompson must be forgetting about how the CEO of Truman Medical Center in Kansas City kicked McDonald’s out just last year, citing an “inconsistent message.” Perhaps Thompson was also unaware of at least three other hospitals that had ended their contracts with McDonald’s prior to Truman: Lurie Children’s Hospital (formerly Chicago Memorial Hospital), Children’s Hospital of Philadelphia, Vanderbilt Medical Center and Parkland Health & Hospital System.

Also, Thompson must have missed this memo: more than 3,000 health professionals and institutions from around the world have signed a letter urging McDonald's to stop marketing junk food to children.

Continuing the healthcare theme was a powerful statement by pediatric endocrinologist Dr. Andrew Bremer, who called out the CEO for the company’s marketing to children: “Last year you said, and I quote: ‘Do me the honor… of not associating us with doing something that is damaging to children.’ Well with all due respect, Mr. Thompson, your corporation is doing just that.”

In his response, Thompson seemed to be getting a little desperate, sidestepping the issue of marketing to children altogether, claiming:

5) “We provide high-quality food, we always have. It’s real beef, it’s real chicken, it’s real tomatoes, real lettuce, real fruit, real smoothies, real dairy, real eggs.”

Really? The “real eggs” in an Egg McMuffin are “prepared with” the following:

Liquid Margarine: Liquid Soybean Oil and Hydrogenated Cottonseed and Soybean Oils, Water, Partially Hydrogenated Soybean Oil, Salt, Soy Lecithin, Mono and Diglycerides, Sodium Benzoate and Potassium Sorbate (Preservatives), Artificial Flavor, Citric Acid, Vitamin A Palmitate, Beta Carotene (Color).

Even the “real smoothies” contain unpronounceable additives. See for example, the “fruit base” of the McCafe Mango Pineapple Smoothie, which consists of:

Water, Clarified Demineralized Pineapple Juice Concentrate, Mango Puree Concentrate, Pineapple Juice Concentrate, Orange Juice Concentrate, Pineapple Puree, Passion Fruit Juice, Apple Juice Concentrate, Natural (Botanical Source) and Artificial Flavors, Contains less than 1% of the following: Peach Puree, Cellulose Powder, Pear Juice Concentrate, Xanthan Gum, Peach Juice Concentrate, Pectin, Citric Acid, Colored with Fruit and Vegetable Juice and Turmeric Extract, Ascorbic Acid (Preservative).

But wait, there’s more. The Mango Pineapple Smoothie also contains “low fat smoothie yogurt,” consisting of: “Cultured Grade A Reduced Fat Milk, Sugar, Whey Protein Concentrate, Fructose, Corn Starch, Modified Food Starch, Gelatin, Active Yogurt Cultures.” And did I mention the 47 grams of sugar? But I am sure it’s “real sugar,” right Mr. Thompson?

Next, continuing to pound Thompson on marketing to kids was Kia Robertson (parent of Hannah; see Kia’s statement here). Then the CEO trotted out the tired industry defense on exploiting children:

6) Globally, we follow guidelines on responsible marketing to children.

Parents in Brazil would beg to differ. Just last month, McDonald’s was fined $1.6 million by the consumer protection agency in Sao Paolo for violating local laws on targeting children.

Here in the U.S., McDonald’s is far from responsible. A report from Yale University found that McDonald’s targets children as young as age 2 at Ronald.com. (This site now redirects to HappyMeal.com, where children are forewarned at the top of the page: “Hey kids, this is advertising!”)

The Yale report also found: “Although McDonald's pledged to improve food marketing to children, they increased their volume of TV advertising from 2007 to 2009.” Preschoolers saw 21 percent more McDonald's ads and older children viewed 26 percent more ads in 2009 compared to 2007. So much for guidelines.

Then Thompson actually said these words:

7) “And we are not marketing food to kids.”

Two words: Happy Meals.

8) To further this point, he claimed “We are not marketing in schools.”

Since a picture is worth a thousand words, see here, here, and here for Ronald McDonald visits to schools. Corporate Accountability International’s report contains more examples of school sightings of McDonald’s clown ambassador.  The company likes to claim, as CEO Thompson did, that Ronald is “just a clown” and that he doesn’t actually hawk food per se, never mind the branding.

McDonald’s also promotes “McTeacher’s Nights” in which, as the company describes it: “Educators, students, parents, and friends are invited to their local McDonald’s to ‘work’ and raise money for a designated school related cause.” Free labor plus free PR for McDonald’s, how brilliant is that?

In more defensiveness, (you almost had to feel sorry for him) CEO Thompson next tried this line:

9) We are not the cause of obesity.

Did he not see Supersize Me?

OK, McDonald’s is obviously not the only cause of our nation’s health woes, but research has shown a connection between the location of fast-food outlets and adverse health outcomes in communities.

For example, one study found that nearly one-third of U.S. children ages 4 to 19 eat fast food, which increases the risk of obesity due to an increase in daily calories. Another study showed that students with fast-food outlets near their schools were more likely to be overweight, and to consume more soda and fewer fruits and vegetables. And this connection was stronger for African-American children, while a third study found a similar pattern among low-income African-American adults. Speaking of which…

In response to Michelle Dyer (see her statement here), who challenged Thompson on McDonald’s marketing to communities of color, the African-American CEO began by joking, “this hits kind of close to home, wonder why that is?” Then he got very defensive, claiming:

10)  “We do not, have not, will not, try to target people of color… I’ve been here 23 years. I know we don’t do that and we wouldn’t do that. We don’t do that under my leadership.”

These three McDonald’s websites speak for themselves:

• 365Black.com
• meencanta.com
• myinspirasian.com

According to this Bloomberg article, in 2011 McDonald’s CEO’s salary topped $8.75 million. For that kind of money, Don Thompson should have far better talking points at the ready. Let’s see what happens next year.

Meanwhile, you can take Corporate Accountability International’s action to tell CEO Don Thompson to stop marketing to children here.

Image from Brendan McDermid/Reuters

Treasury's Tax Loophole Mistake Saves Companies Billions

As the U.S. economy crumbled in early 2009, President Barack Obama offered a plan that he said would save American jobs: a crackdown on corporate tax loopholes that encourage companies to send profits abroad to avoid paying billions of dollars in U.S. taxes each year.
Tax lobbyist Ken Kies was not worried. A decade earlier, he had led a fight to preserve a key loophole - known in Treasury Department shorthand as the "check the box" rule - when another Democratic president, Bill Clinton, had tried to kill it.
"I told my clients, 'Don't sweat this. This is never going to happen,'" recalled Kies, who has advised corporate giants Microsoft and General Electric on the issue.
Kies was right.
Business groups rose up against Obama's plan, arguing that it could damage U.S. businesses already threatened by the weak economy. Democrats in Congress balked, Obama dropped the idea and the loophole survived.
The story of the "check the box" loophole, which allows U.S. companies to choose for themselves how to classify their subsidiaries for tax purposes, and a companion policy known as the "look-through" rule, shows how Washington bureaucrats, lobbyists and politicians have worked together - sometimes wittingly - to save money for American corporations and deprive the federal government of billions in tax revenue each year.
What began in 1996 as an effort by the Treasury Department to simplify the U.S. tax code mistakenly ended up as a massive tax loophole for corporate America, which seized upon it and has never let go.
Besides fueling an explosion in earnings that U.S. companies keep abroad - now more than $1.8 trillion, the Commerce Department estimates, double the amount from less than a decade ago - the loophole has become a symbol of how difficult it can be to repeal a tax benefit once it becomes entrenched.
At congressional hearings last week, several lawmakers blasted Apple Inc. for using the "check the box" loophole and other international tax strategies to avoid paying what they estimated as $9 billion in potential U.S. taxes in 2012.
Two of Apple's most aggressive questioners, Democratic Senator Carl Levin of Michigan and Republican Senator John McCain of Arizona, have called for closing the "check the box" loophole. But even they have voted to keep it alive several times in recent years when it has been inserted into other legislation.
Levin's office did not respond to requests for a comment. McCain declined to comment for this story.
"Once a policy mistake is made that is favorable to taxpayers, and particularly to big taxpayers, it is extremely difficult to reverse," said a former Treasury Department official who helped write the "check the box" rule and was involved in Obama's effort to repeal it.
The former official spoke on condition of anonymity, citing the sensitive nature of the tax break.
The "check the box" loophole - which costs the United States about $10 billion per year, according to the White House - also has been a reflection of Washington's "revolving door" culture of policy-making and lobbying. Some of the bureaucrats who helped to write the rule went on to work for corporations that used it to lower their tax bills.
They include William Morris, who was Treasury's associate international tax counsel when the rule was imposed.
Morris, who did not respond to requests for comment on this story, joined GE in 2000 and is now director of the company's global tax policy. The company, like many other big multinationals, keeps its tax burden well below the official U.S. corporate rate of 35 percent in part by taking advantage of "check the box" and other international tax strategies.
GE's annual reports indicate that the company does so largely because many of its profits are directed to its vast network of foreign subsidiaries. In a filing with the U.S. Securities and Exchange Commission in February, GE said its overseas affiliates were holding $108 billion in offshore profits, which is more than any other U.S. company.
Morris's precise role in GE's tax strategy is unclear. The company declined to comment for this story.
Other former IRS and Treasury officials involved in shaping the tax loophole now hold senior positions at law and accounting firms in Washington and New York.
BIRTH OF A LOOPHOLE
Offshore tax shelters have bedeviled the U.S. government virtually since the inception of the tax code in 1913.
A 1962 compromise between President John Kennedy and Congress imposed U.S. taxes on "passive" income such as royalties and interest earned abroad, but not on "active" income from regular business operations.
That law, known as Subpart F, made the tax code increasingly complex as businesses grew larger and more diverse. The law was revised 10 times between 1969 and 1996 as the U.S. Internal Revenue Service tried to figure out how to classify, and then tax, tens of thousands of corporate units.
In 1996 the Treasury Department moved to simplify matters with a rule that enabled companies to "check the box" on a tax form to describe a given corporate entity - including whether it was, for tax purposes, irrelevant, a so-called "disregarded entity."
For a company and its subsidiaries that all operate in the United States, the rule streamlined tax filing by allowing the subsidiaries' income to be reported on the same forms as the parent company's income.
When applied to U.S.-based multinational companies, however, the "disregarded entities" status could be used to set up high-volume subsidiaries in low-tax jurisdictions such as Luxembourg or Ireland. A key part of Apple's tax strategy, for example, is having a subsidiary in Ireland that takes in all of the income from Apple's retail stores in Europe.
Treasury had given little thought to how the "check the box" rule might affect U.S.-based multinational corporations, according to several people involved in the effort.
Treasury officials realized they had created a massive loophole when they noticed a spike in cross-border financing shortly after the rule took effect.
"The mistake was extending it to foreign entities," Donald Lubick, Treasury's top tax official at the time, told Reuters. "That was apparent pretty quickly."
Clinton's Treasury Department moved to revoke the "check the box" rule in early 1998. But multinational companies such as Hallmark, Coca-Cola, IBM and Philip Morris launched a full-court press to convince Congress to keep the rule in place.
Enter Kies, a former tax specialist for Congress' Joint Tax Committee who was eager to put his expertise and contacts to work as a tax lobbyist.
Kies's former Republican bosses - Representative Bill Archer of Texas and Senator William Roth of Delaware - accused the IRS and Treasury of overstepping their authority in trying to take away the loophole.
Kies, meanwhile, says he pursued a strategy that he figured would resonate with businesses, lawmakers and regular citizens: He argued that eliminating the "check the box" loophole would damage U.S.-based multinational companies by forcing them to pay more taxes not only in the United States, but also to high-tax nations such as France.
Roth's Senate Finance Committee passed a bill in April 1998 to prevent Treasury from making any changes to "check the box." That language was watered down to a non-binding resolution by the time the measure passed the Senate the next month, but Congress' message was clear: Don't mess with the loophole.
Treasury soon gave up its effort to revoke it.
"In light of that reception that this rule got on Capitol Hill, we withdrew the notice," said Philip West, who was then the top international tax official at Treasury and now advises clients on international tax strategy for the law firm Steptoe & Johnson.
'CHECK THE BOX' GROWS UP
By 2004, thanks in part to the "check the box" rule, U.S.-based multinational corporations paid an effective tax rate of about 2.3 percent on $700 billion in foreign earnings, according to the Obama administration.
To make "check the box" tougher to revoke, Kies and other corporate lobbyists urged Congress to turn the rule into a law.
Congress did so in 2006 with legislation that became known as the "look through" rule. It bolstered the "check the box" loophole by giving corporations more latitude to move some types of income from one foreign unit to another without paying a tax.
The "look through" rule became law with little debate, according to congressional records. It was tucked into a broad extension of other tax cuts.
The 2006 law wasn't permanent, but supporters have managed to extend it repeatedly by embedding it in large and important but unrelated pieces of legislation that were headed toward easy passage in Congress.
That is what happened in 2009, when Obama threatened to cut the loophole.
Congress has extended it temporarily twice since then as part of larger pieces of legislation. Both Levin and McCain voted to extend it in January as part of the legislation that kept the U.S. government from going off the "fiscal cliff," a package of across-the-board tax hikes and spending cuts that threatened to plunge the U.S. economy into another recession.
Both also voted to extend it in 2010 as part of a broad tax bill.
Obama has not proposed a repeal of the loophole since 2009.
During the Senate hearing last week on Apple's tax strategy, Mark Mazur, Treasury's assistant secretary for tax issues, said in written testimony that the Obama administration remained "concerned about the misuse of various income-shifting devices, including misuse of the 'check the box' rules."
Mazur noted that the White House has made proposals to discourage profit-shifting offshore. But it's unclear whether Obama will try again to have the "check the box" rule revoked.
For perspective, Obama could read the words of another president who also fell short in his assault on tax shelters, this one failing to raise taxes on overseas holding companies.
"We face a challenge to the power of government to collect uniformly and fairly, and without discrimination, taxes based on statutes adopted by Congress," that president wrote.
The letter was signed by Franklin Roosevelt and dated June 1, 1937.
© 2013 Thomson/Reuters. All rights reserved.

Wall Street "Too Big to Fail" Banks and Corporations Are the Real Takers: Count the Ways

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
The takers are on the loose, mugging most of the American population and destroying a vital economy and representative democracy in the process.  They break the rules, think only of themselves, and take unaccountable advantage of decent people in society.
No, they aren't the Americans who have earned their Social Security benefits, or those who were laid off their jobs so venture capitalists such as Mitt Romney could earn an extra billion or so, or the urban and rural poor who can't find jobs because factories have been sent overseas to charnel house sweat shops (such as the one in Bangladesh in which more than 1000 slave-wage workers were killed just a short time ago).
Who are the takers in our society? The corporations who make record-breaking profits at a time when workers are enduring decreased (adjusted for inflation) pay or losing their jobs – and the too big to fail financial institutions who take advantage of an all but monopoly-hold on our money supply.
The following are just a few examples of the takers in action.
Banks: Yesterday, we talked about this largely over-looked fact in terms of media coverage: seniors and the working class are not only squeezed by the threat and actual decrease of earned benefits and pay, they receive virtually no interest on their hard-earned savings.  What do the banks get (which are really now multi-faceted, hydra-headed financial institutions)? A robbers' take by using the money on which they pay literally pennies in interest to loan out at up to near 30% on some credit cards.  That's not to mention the still shady sub-prime mortgage market, hedge fund insider trading, and large bank penalties and fees for everything from checking accounts to loans.These banks aren't banks: they are financial entities with tentacles that control DC to ensure lack of regulation, which allows them to take and take and take from those of us who actually labor for a living.
Agri-business: First they came and squeezed so many of the small farmers out of business.  Now they are taking away our fundamental human right to own and farm the basic grains of life: seeds.  That's the ultimate taker, taking away the building block of the food chain by patenting seeds and agricultural products, and then suing farmers and others who through no negligence of their own end up with patented seeds blown onto their fields. You can't be more of a taker than one who steals the agrarian seeds of life and forces payment for them throughout the world.
Logo Brand Corporations: Naomi Klein brilliantly detailed how consumers were being sucked in by omni-present advertising that sells "aspirational" products internationally. Just look at Nike, Apple, or Calvin Klein.  These are highest-profit/lowest-possible-wage name brands that we often purchase for their logo life style identity image. Yet, in doing so, we allow such companies to exploit labor overseas, abandon it in the US, and make enormous profits on items with retail prices that far, far exceed their costs of production and shipping. Logo brand corporations take our dollars, increase their record profits, hire exploitative labor sub-contractors in financially desperate nations – and they make relatively minor financial investments in building the domestic US economy.
Predatory Venture Capitalists: Mitt Romney represented the ultimate $250 billion dollar venture capitalist blood sucker on the US workforce and economic structure.  All he did was implement strategies to take companies down, sell off their parts and decrease labor costs.  Maybe he did more than that – after all he has five children – but not much except fly around clueless between his mansions and donate to the Mormon Church.  There are some good venture capitalists who actually build businesses (including sustainable projects), but they tend to be the excepton rather than the rule.
Corporate Intellectual Capital: Who provides the education that allows companies such as Apple, Microsoft, General Dynamics, and Northrop Grumman to prosper?  Do they pay for the education of their workers?  Not a chance. The public school system – and public and private colleges – are the fundamental basis of the brain power behind US corporations.  Not to mention that major businesses are making and have made billions and billions of dollars off of the public commons such as television airwaves and the Internet.  Many inventions that came through publicly funded research were privatized for a song and have earned endless profits for corporations and the one percent. Corporate intellectual capital is a gift from the American people.  The corporations take it without paying it back and then pocket the profits from the brainpower that we have paid for and nurtured as a nation.  Can you be much more of a freeloader than that?
BuzzFlash at Truthout can go on with this list, but it's Friday, and we don't plan to spend our weekend getting up to a hundred reasons we know who the real takers in our society are.
They are the 1% freeloaders, freeloaders on a society that provided everything they needed to become the ultimate gilded grifters.
Note: Inspired by the style of frequent BuzzFlash at Truthout columnist Paul Buchheit.
(Photo: Nisha A)

What’s Really Happening with China’s Silver Demand?

by Miguel Perez-Santalla, BullionVault
Tuesday, 28 May 2013

China’s demand for silver fell hard in April. But is that all there is…?

ANALYSTS at Barclays Bank recently noted that silver imports were down 28% in the month of April year on year.

But in an article reporting that news, the author makes it sound like demand was also off significantly for unwrought silver, for silver powder, and for jewelry manufacturing as well. Only if you take a myopic view would such assumptions be correct. However, just because trade between China and the rest of the world is down does not mean that silver demand is down. What it does reveal is a decrease for external demand of silver from the Chinese market.

China still remains a net importer of silver even with exports up of silver products. To me it’s amazing that they need to buy silver through imports at all. In 2011 the Chinese government incentivized the mining industry in an effort to get off of dependence for base metals from foreign countries. With China experiencing growth as high as 10.4% over the last four years and in 2011 a 9.3% growth their demand for metals and minerals for construction and industry has grown exponentially as well.

China is now the number two industrial consumer behind the USA. So of course, as any wise business would do, they look for cheaper more productive forms of sourcing. In an effort to reduce their costs they have invested in the mining and smelting sector. In doing this, according to a Thomson Reuters GFMS report for the Silver Institute, production at China’s copper, lead and zinc mines were estimated to have increased by an average of 57% in 2011.

This is significant to silver, because as opposed to the average world supply – where silver is mined 71% of the time as a byproduct of other metals – in China the figure is much higher at around 95%. So logically if production of base metals increases, then production of domestic silver will increase as well.

Now, according to the US Geological Survey, China’s direct mine production was up 100 metric tonnes from 2011 to 2012. The drop in April 2013 signifies around 48 tonnes of silver.

Obviously that looks like it represents nearly 50% of the increase of supply. But mining supply continues to grow as reported by Thomson Reuters GFMS that the Ying operation completed a mill expansion in mid-2012 that increases their operating capacity by nearly 25% and other dedicated silver miners such as Minco and Silvercorp may come on board growing annual production possibly another 170 tonnes or more as well.

The increased technological advances in the mining and refining fields are improving their efforts at recovery as well. The US Geological Survey estimated that at the end of 2011 China had the fifth largest reserves of silver worldwide behind Peru. Then there is no wonder that this country may become self-sufficient in silver.

Even so because of inflation and their continued growth China will remain a significant consumer. Not only will they continue to grow in the industrial, electronics and jewelry sectors but also in the retail investment sector. In 2011 they represented 8% of global net purchases for silver bars and coins. This as relative newcomers to physical bars as they only became available as of July 2009.

So the truth is they still imported 5.5 million ounces in April 2013 according to Mu Li, a commodity analyst at CPM Group. That is still a lot of metal and it is not going to disappear overnight. As China’s population continues to prosper all things of value will be in demand and silver which is an important component of many products, a beautiful metal as jewelry and a great way for investment diversification for the people of China will not lose it luster anytime soon.

Miguel Perez-Santalla
BullionVault

Miguel Perez-Santalla is vice president of business development for BullionVault, the physical gold and silver exchange founded a decade ago and now the world’s #1 provider of physical bullion ownership online. A fierce advocate for retail investors, and a regular speaker at industry and media events, Miguel has over 30 years’ experience in the precious metals business, previously working at the United States’ top coin dealerships, as well as international refining group Heraeus.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

'Liberty Reserve' And Why Some Money Launderers Are "More Equal" Than Others

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

“All animals are equal, but some animals are more equal than others.”
- George Orwell’s Animal Farm

It’s been many, many years since I read George Orwell’s Animal Farm, but the message conveyed in it will remain with me forever.  The book is many things, but more than anything else, it is a portrayal and critique of human nature and the political systems that we create. For those that need a refresher, or have not read the book, here’s the basic plot.
There’s a farm headed by a Mr. Jones, who drinks so much he becomes unable to take care of the farm and feed the animals.  Over time, the animals (in particular the pigs), decide human beings are parasites and the pigs lead a revolt and run Mr. Jones off the property.  They change the farm’s name from Manor Farm to Animal Farm and create a list of 7 commandments.  They are:

1. Whatever goes upon two legs is an enemy.
2. Whatever goes upon four legs, or has wings, is a friend.
3. No animal shall wear clothes.
4. No animal shall sleep in a bed.
5. No animal shall drink alcohol.
6. No animal shall kill any other animal.
7. All animals are equal.

Rather quickly, the pigs assume leadership over the farm and one pig in particular, Napoleon, consolidates power after running his primary competitor off the property.  It goes downhill from here fast.  The pigs start to walk on two legs, drink alcohol and sleep in beds, amongst other things. Understanding that their new lifestyle in in direct contrast with their original seven commandments, they simply decide to make some adjustments.  The adjustments are:

1. No animal shall sleep in a bed with sheets.
2. No animal shall drink alcohol to excess.
3. No animal shall kill any other animal without cause.

Rather quickly, even these adjustments becoming too binding for the glutinous and power hungry pig oligarch class.  They decide to just condense everything down to one commandment:  All animals are equal, but some animals are more equal than others.
The above process is one for the ages, a process that has been reenacted time and time again by our species over the millennia.  It is exactly what is happening in these United States right now.
The reason I spend so much time on the Constitution and civil liberties these days is because I can see the above unfolding right before my eyes.  I also see an opportunity to stop it before it reaches its final, most destructive stage.  Whether it’s the Department of Justice turning journalism into a criminal act, the IRS going after political enemies, or our Noble Peace Prize winning President droning thousands of innocent men, women and children all over the world with flying robots, the oligarch class in this country is dismantling the Bill of Rights one amendment at a time.

Once the founding document that has served this nation so well over the centuries (certainly not perfectly, but still far better than other nations), is chipped away at enough that it is rendered meaningless, the final more brutal and in your face feudal structure will be implemented.  We cannot allow this to happen under any circumstances.
There are countless examples of rampant criminality and corruption as well as blatant evidence of a two-tier system of justice in America today.  Too many to note or write about, but in this case I want to focus on this concept of “money laundering” in light of the recent shutdown of Liberty Reserve.  This is how the Wall Street Journal describes the story:

The money was virtual, but prosecutors say the crime was real.

Officials brought charges against a group of men who allegedly manufactured an Internet-based currency to launder about $6 billion in ill-gotten gains, a sign of authorities’ rising concern with digital cash.

Liberty Reserve, which was incorporated in 2006, was a “bank of choice for the criminal underworld,” according to the indictment, which said the operation allegedly laundered the money through 55 million transactions before it was shut down earlier this month. The company has about one million users world-wide, including about 200,000 people in the U.S., according to prosecutors. They called the plot one of the largest money-laundering operations ever uncovered.

A spokesman for Liberty Reserve couldn’t immediately be reached for comment. Prosecutors said Tuesday that they arrested five of the seven men charged in the indictment Friday in Spain, Costa Rica and Brooklyn, N.Y., and charged them with operating an unlicensed money-transmitting business. The officials said they plan to seek extradition of those arrested abroad, and that the two remaining men are at large.

On Tuesday, in the first use of the 2001 Patriot Act against a virtual currency, the Treasury Department invoked a section of the law to choke off Liberty Reserve from the U.S. financial system. The Treasury’s proposal would prohibit U.S. financial institutions from opening or maintaining accounts for foreign banks that process transactions for Liberty Reserve and require special steps to guard against any transactions involving it.

Ok, now let’s compare the above to the way the authorities went after major financial institutions found laundering hundreds of millions of drug cartel money. HSBC is the most high profile example.  From Reuters:

(Reuters) - HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities for allowing itself to be used to launder a river of drug money flowing out of Mexico and other banking lapses.

Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel between them laundered $881 million through HSBC and a Mexican unit, the U.S. Justice Department said on Tuesday.

“We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes,” HSBC Chief Executive Stuart Gulliver said.

Bank officials repeatedly ignored internal warnings that HSBC’s monitoring systems were inadequate, the Justice Department said. In 2008, for example, the CEO of HSBC Mexico was told that Mexican law enforcement had a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.

No bank or bank executives have been indicted. Instead, prosecutors have used deferred prosecutions, under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing its behavior.

The difference in approach and in the application “justice” could not be more clear.  In the case of Liberty Reserve, the entity was isolated from the U.S. financial system and those arrested will be targeted for extradition.  Meanwhile a global manhunt is most likely on for the two remaining men at large.  In other words, “money laundering” was uncovered and the “justice” in this case is that the operation was closed and the participants arrested.  Ok.
Compare that to the HSBC settlement.  No bank or bank executives were indicted despite  the clear fact that there was a great deal of irresponsibility and criminality involved here.  Not only that, but the bank merely has to pay a portion of its profits and life goes on.  Like the IRS agents, they say they are “sorry” and promise to never do it again.  That’s what happens when oligarchs or their minions break the law.  When a regular citizen breaks the law, your life is ruined forever.
The crackdown on Liberty Reserve has nothing to do with “money laundering.”  It’s about a cartel of “too big to jail” banks and the fraud financial system they operate eliminating any players that try to encroach on their turf.  That isn’t capitalism, or socialism and it certainly isn’t anything close to freedom.  It is a parasitic, oligarch created feudalistic structure that must be done away with.  I often hear people say “we never learn from our mistakes.”  Incorrect.  People learn from their mistakes when there are consequences to their actions.  Of course criminals don’t learn from their mistakes when there are no serious consequences to their crimes.  Jail time would do the trick for a lot of bankers, politicians and bureaucrats.
In the meantime: Some money launderers are simply more equal than others.

Eurozone in crisis: One in four youths is jobless as unemployment across 17 nations in the single currency reaches record high

Total unemployment rises to 19.4 million amid fresh criticism of austerity

Young people are bearing the brunt of Europe’s jobs crisis, it was confirmed, as unemployment across the eurozone soared to a record high.

Nearly one in four 16 to 24-year-olds across the 17 nations in the single currency is now out of work, according to monthly figures published by the EU’s data office, Eurostat.
The latest 95,000 rise in April took the overall jobless count to a record 19.38 million people, or 12.2 per cent, and puts unemployment on course to breach the 20 million mark by the end of the year.
The figures come against the backdrop of a eurozone mired in its longest recession since the launch of the  single currency in 1999.
They also prompted fresh criticism of the austerity strategy being pursued by struggling southern European states, with one in four people out of work in Spain and Greece as such measures take their toll.
But young people are suffering the most, with 3.62 million out of work across the single currency bloc – 24.4 per cent of under-25s, a figure up 188,000 on a year earlier.
Well over half of those under 25 in Greece and Spain are not in work, compared to more than 40 per cent in Italy. By contrast in Germany – which has managed until recently to maintain growth despite the wider recession across the eurozone – unemployment stands at a much lower 5.4 per cent and just 7.4 per cent among under-25s.
Tom Rogers, senior economic adviser to the Ernst & Young Eurozone Forecast, warned of a “relentless” rise in youth unemployment. “Youth joblessness at these levels risks permanently entrenched unemployment, lowering the rate of sustainable growth in the future,” he said.
The European Central Bank (ECB) has cut interest rates to a record low of 0.5 per cent in a bid to spur the economy into life, but this week the Organisation for Economic Co-operation and Development called on the the ECB to do more to salvage a “dire situation”.
Pier Carlo Padoan, chief economist of the OECD, believes the eurozone’s lingering woes are the key risk to a global recovery and called on the ECB to adopt money-printing policies pursued by other central banks around the world, including the Bank of England.
In contrast with the eurozone’s jobless figures, the US economy has been growing steadily since emerging from recession in 2009 and its unemployment rate fell to 7.5 per cent in April. The jobless rate in the UK is also at a much lower level of 7.8 per cent, although workers have suffered real-terms pay cuts as salaries fail to keep up with the rate of inflation.
Professor Guglielmo Meardi, an expert on European employment relations at Warwick Business School, said: “After three years of labour market reforms and austerity, jobless figures are at a record high in the eurozone, while they decline elsewhere. This seriously questions the appropriateness of the tools used so far, all the more so that the countries that have reformed and cut with most zeal, Spain and Greece, are the ones with the worst results.
“In the short term, labour market deregulation facilitates dismissals but does not facilitate recruitment, so a negative economic cycle may be the wrong time to introduce it.”
The sharpest change in unemployment rates among the 17 eurozone countries was in Cyprus, which saw its jobless rate rise to 15.6 per cent from 14.5 per cent. The island became the fifth eurozone member to seek a bailout in March.
The OECD, which this week slashed its growth forecasts for the eurozone to a 0.6 per cent contraction in 2013, forecasts that unemployment will not peak until next year. Martin van Vliet, an ING Bank economist, added: “Looking ahead, an end to the eurozone labour market downturn is not yet in sight. Indeed, the European Commission’s business survey remains at levels consistent with further increases in unemployment. Even if the eurozone economy exits from recession later this year, the labour market is likely to remain in recession until next year.”
Analysts say the ECB is likely to take further measures to shore up lending to small and medium-sized businesses, which are currently not taking out loans for fear of a worsening economy and because banks are charging high rates. “So far the ECB’s actions have not translated into lower lending rates for businesses and households, failing to boost activity,” said Anna Zabrodzka, an economist at Moody’s Analytics.