tv Prime Interest RT July 12, 2013 6:29am-7:01am EDT
wake of the coup d'etat in egypt is this region condemned to a vicious cycle uprisings and brutal suppression what about the claim islamic democracy are incompatible and just the west really have an interest in seeing the people of the middle east free to decide their own destiny. good afternoon welcome to prime interest i'm bob english in washington d.c. here are the stories we're telling today well so much for the summer doldrums after the markets closed yesterday then told the markets up again even gold he said the easy money spigot will remain open wax on wax off well talk we'll talk market manipulation with the gadget next and there is a chill blowing through tech land that's because after apple's gamble to go to trial well the judge came down hard she ruled the antitrust suit that apple was guilty of price fixing e-books now the tech giant will likely be regulated by the feds finally an eighty year old ban that was a pillar of the securities industry is about to be lifted it will be easier for
small businesses to raise money the flipside is the potential for fraud also increases and borean will dig into the fine print of these new s.e.c. will and you won't want to miss just underhill as she charts heads arbitrage and negative tax rates so let's get to what's in your prime interest. in one thousand nine hundred eighty eight one of the largest hedge funds at the time was long term capital management they started out making bets on treasury bonds and were successful the problem was they became. so big they had to look for
the markets to bet on well they turned to gold they leased or rented it from a central bank for a low rate and then they'd need at least sold it then they use that money to invest in something with a higher return using money right but the markets were roiled and all of the fun bed started going the wrong way and who had title to the gold that's a critical question well the federal reserve organized a bailout and got things back to normal but gold leasing would accelerate over the years and again who owns it we decided to talk to bill murphy of the gold action committee to get an answer first we asked him what get his mission is. founded january of ninety ninety nine by my colleague christine myself exposed the manipulation of the gold and silver markets by what we thought was just brilliant banks because it was very obvious what was going on in the trading activity but as we got into it we realized it was much bigger than that it had to do with the us government. at the treasury to international settlements the bank of other central
banks and instead i'm going ever since what we've done is. come up with a bunch of evidence to prove our case latest market action in gold and silver is evidence of just that and could you dig into some of that evidence that you were talking about just now i believe there are a couple so you have to see whistleblowers what was the result of the. first of all we have all kinds of official documents for the b i yes and various institutions that reveal. quietly they don't want to get out but it's got to what they're doing and then there have been whistleblowers about the activity of morgan in the gold and silver markets and other bullion banks and it's quite a story actually. your organization revealed actually j.p. morgan that has the largest short silver position on and they got that piece of the . vision how does that affect the market having one short holder well that's what
we have and i trust the united states i mean when we were in front of the see if t.c. we exposed how big it was we've gone to the sea of t.c. about if they refuse to do anything. testified how they are manipulating the nippy letting the silver market when you're that big you can do it she gave us testimony . in front of the c f.t.c. . just blacked out my testimony and then the next day and you're going to get run over by a car guy it's two cars getting away your chase killed the poor guy for doing the right thing well certainly causation doesn't necessarily equal correlation but that is a great story can you describe the way you describe the way the gold market is that we have paper gold and we have physical gold we have various locations central banks how does it all fit together it's a great question i mean people think that the paper market market different in really i know why they say that but it's not because it's
a london fix every day that's where physical mark physical dealings all of the world are settled but it's driven by the paper market that can drive the price down using. another derivatives and not. to react you know either step up to the plate or back off and if you know prices been driven down from close to eight hundred dollars to just a while ago. yes and twelve hundred dollars in gold and that was driven in the derivatives market but the physical market followed it down now we've got a big balance here we're starting to go the other way and what is the role of exchange traded funds in all of this if any and could you explain what those are for viewers in the different types. of funds for people many in the institutional world where they can you know make your investments on wall street and it's backed by supposedly buying buying gold and buying silver and these big energy c.t.'s go and buy it up it's a big difference in the senate east because it's something like
a g l d or they can do whatever they want without physical supply so they can actually be using the supply against their own investors versus someone like a spot asset management where you know what you've got you can get your gold and silver from at any time if they're totally different in the way they operate let's talk about gold leasing is it possible for this deal do to lease that's gold and we know about central banks we've seen their gold how do these put together if at all well gold lace english part of the gold price suppression scheme scam started you know way back when where banks would borrow go from central banks still the proceeds into the marketplace and use them to run their operations they could do instead of spending way back when six or seven or eight percent to borrow money they could borrow central banks very cheaply and this led into the price suppression scheme which was started by robert rubin and larry lawrence summers former treasury secretaries of the united states so it's cold it's been mobilized to suppress the price and how it relates to. i think now what's going on with these
major e.t.s. is they force the price down and the banks now want to get their gold back. you know to get to the central banks because they know what's coming for the price of new years and years ahead the price is going to go bonkers so this big price collapse has allowed them to get some of their gold back and where is it coming from yes especially the g.l.d. which is unloading its go so it certainly seems like central banks are using this as a buying opportunity where do you see the future in terms of central banks use of gold they want so much of it. well. i don't know that they want so much of it where it goes a tiny market what they want to do is not have an influence or other markets like the bond market the dollar and so on they're desperately afraid how gold can affect interest rates i mean lawrence summers himself wrote gibson's paradox and the gold standard about the relationship between gold and interest rates they're petrified
of interest rates taking off right now some black swan event which could cause a derivative explosion so they don't want gold the gold price moving up too sharply and they really use it to. manage their other markets in terms of public perceptions possible that we'll ever see another return to the gold standard even a quasi gold standard where the central banks use it for international settlements in some way. it's possible i mean god is all of that is for free markets which we don't have any united states a moment it could happen it would have to be revalued at a much much higher price and yes it could happen it could be why they're trying to get their gold back now before something like that occurs but if it never happened and we're not saying it will it would have to be between all the scent of the western central banks not just the u.s. what do you see as a long term future for gold we've seen a intermedia correction here i know you expect higher prices in the future and how
does manipulation relate to all this can they keep can the people that you say who are suppressing the price of gold keep doing it for perpetuity. their gold card jealously call it. they started this basic drive sincerely october they've gone to just about as far as they can and they have a little more to go this fall should be spectacular as many people know gold is going from the west to the east they're going to run out of supply we have strict tackler most coming in gold and silver you'll see silver over a hundred bucks gold is going to at least three to five thousand dollars of their game is about over they could have a few more weeks to go but that should be that's that's certainly a sign is dire thank you for joining me this is bill murphy the chairman of the gold antitrust action committee thank you so much thank you.
the jobs i've directed the as things for you to write the rules to remove the ban on general solicitation that's the finally published the rules yesterday and here late but not without foot dragging and debate so let's dive into the fine print of these new rules these and selling say you can now advertise to the general public to south sheriff and a public offering however you still have to be. well the two and that asked the rule permits an issue or to engage in general solicitation provided that all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that such purchasers are accredited and vaster is the first and most significant provision is the repeal of the general solicitation this rule was eighty years old and has been called overbearing until yesterday if you did not have a preexisting relationship with an investor you could not approach them to raise
capital to start a business you were pretty much can be confined to your friends and family and colleagues limiting capital formation to those with substantial and fluent networks their appeal will give entrepreneurs and investors tremendous amounts of opportunities in possibilities to network and start a new ventures and businesses will now legally be able to use social media to raise money a small business funding group tweeted yesterday that removing the band on general solicitation all have the greatest impact on all of us this is going to have huge implications on the economy as it opens the floodgates to new funding opportunities for small businesses however there are concerns about removing the ban allowing firms to publicly adverts advertise could give fraudsters greater opportunities to solicit their services two or more people into their schemes as c.c. chairwoman white addressed this issue and her opening statement at the meeting yesterday. is just not mean however that the commission should not take steps to
pursue additional investor safeguards if and where such measures become necessary once the ban on general solicitation is lifted. the f.c.c. rule only lifted the ban on general solicitation but you can only sell to accredited investors to be an uncredited investor you either have to have one million dollars of investable assets not including your home or made two hundred. thousand dollars per year for the last two years further the rule states that you have to take a reasonable steps to verify that purchasers are in credit investors this may not be a big deal for an established firm that has a compliance department but a small startup may not have the tools available to them to verify their investors credentials in order to do this you would need to review iris forms or seek written confirmation from a registered broker dealer before this rule the bird was on the investor to prove his status well the jobs act was intended to help small businesses raise capital
the way the rules were written it could be counterproductive i think red tape and compliance that's the sea took one more step to address this issue of fraud by passing a rule that would bar felons and other bad actors from participating and offering and bester advocacy groups asked the f.c.c. to update the bad actor rule before lifting the ban on solicitation for fear is that felons could try to scam innocent television it is that investors on the television or in the internet these rules will not be effective for another sixty days or they are in the public comment period if you would like to file your comments or concerns with the security and exchange commission visit s c c. i wasso be continuing this conversation on twitter at perry and r.t. . we all know death and taxes are the only certainties in life but the tax structure itself is a byzantine nightmare it isn't it coming up just charge how some of the biggest
market why not. find out what's really happening to the global economy with mike stronger no holds barred look at the global financial headlines kinds of reports. we go from goldman of you lation jobs maneuvering to tax code tinkering according to a recent g.a.o. study on average the largest us corporations they paid less than half of the federal corporate tax rate we know turn to prime interest producer justin underhill
justin how are these large corporations able to accomplish this all corporate profits as a share of g.d.p. have risen to all time highs well corporate income tax payments have fallen to lows the x.-axis here excuse me the y. axis the amount of profits and taxes expressed as a percent of g.d.p. and the x. axis is years ranging from one nine hundred forty five to two thousand and twelve and over most of this period. profits have steadily increased especially rising during the nineteen eighties and this at the same time the amount of taxes paid by the very same corporations has steadily declined over time now why don't these corporate taxes increase with profits is not because tax rates are low in fact the u.s. is one of the highest corporate tax rates in the world at thirty five percent but there is something that has changed dramatically over the past thirty years billions of dollars worth of special tax breaks subsidies and ever growing
loopholes have been introduced into the tax code and these gifts in the form of tax breaks don't come entirely free they are bought so how does this work well one of the ways they get bought is through direct campaign contributions and to get a sense of this will profile three companies general electric. and wells fargo these companies. have spent upwards of three million dollars on current members of congress in the two thousand and twelve two thousand and six to two thousand and twelve campaign cycle and wells fargo spent one point seven million dollars and here's the amount g.e. should have paid and should have paid if they were paying the thirty five percent tax rate now not only did these companies not pay that much lower they actually paid negative tax rates between two thousand and eight and two thousand and ten you can see that in the yellow they were paid by the government as a reverse tax and this is
a regressive corporate tax system where these large companies can pay more and get these tax breaks or smaller businesses can't afford that so it seems like campaign turn to contributions are mostly for these financial committee members and if that's true more than seventy percent of the money spence is members leadership of the house in the senate as well as the senate finance committee members of the house ways and means. the members on the top five. beneficiaries from the thirty corporations that paid no taxes between two thousand and eight and ten are standing who are john boehner eric cantor boyd blunt and mitch mcconnell sounds like a few familiar names or it also seems like they have a vested interest in opposing any legislation to close these loopholes exactly essentially they maintain their power through these loopholes they're being paid off through campaign contributions and there's very little effort to change this
there have been some legislation proposed to change the loopholes in the tax code but you probably are not going to go anywhere well i understand these companies spend a lot of money on their tax departments to yes i actually spend some of the most a lot of money on on it's tax apartment and they bring good things to what they do bring good things to life but one of the things for their tax apartments known as one of the best tax apartments in the world they're headed by john samuelson who is a former treasury official so this is another stop on the revolving door and they also have former i.r.s. members and they also people that actually wrote some of the tax code working for them and it is. imagination that will bring good things to life and imagination at work this is certainly not imagination making their taxes imaginary. all right so what strategies do these companies use to avoid taxes well there are several different strategies that they use one is some of the fun ones are called there's
a double irish as well as the dutch sandwich yes there are certainly yummy for these corporations how this works is you set up to a subsidiary of ireland and then you also set up a subsidiary and holland through this you can then route payments from holland to one of the irish subsidiaries through regulations and tax negotiations they're able to get. through without paying any taxes and then route under certain circumstances route those payments to the cayman islands and so this sort of circuitous route is a way that many corporations including all get around paying taxes but also you can play that there's a game called tax for this ok online and you can play this game and we actually have video of it here it's pretty fun you actually play as a corporation and you try to find ways to hide your profits and find ways to not
pay taxes and you can actually try out the double irish the dutch sandwich for yourself in this game that's excellent and that's a great way to educate budding corporate c.e.o.'s on how to avoid taxes but you know can you blame them for taking advantage of these loopholes well you know they lobbied aggressively for these loopholes and so of course they're taking advantage of them that's not surprising but it's very hard for anything to get to be done about this there's very little pushback thank you just a thank you. joining me is our t.v. correspondent. it's great to be here with you thank you for joining me on the first
of all let's go to our first story this comes from n.b.c. world moves us aid to egypt was formally put under review thursday in the wake of last week's military backed power shift as arab nations rushed to pledge twelve billion dollars to the country's new government the pentagon said the president has commissioned a review of u.s. assistance to the egyptian government this marks a policy policy shift by the obama. which said on monday that suspending the new one point five billion dollars support to cairo would quote not be in the best interest of the u.s. so i give the floor to you. well does that tell you that the u.s. does not really know how to handle the egyptian situation. i think that a lot of people will tell you that this is the answer especially because what happened in egypt. there is no definition of what's happening or what happens in egypt obama did not use the word coup however some members of the congress that use
the word coup and by low the u.s. is to cut funding to egypt if that was in fact a coup and it seems like we're still sending these f. sixteen planes over there we don't want to disrupt lockheed martin's revenue stream so i think are we giving this mark mixed messages to them. maybe they would see that as the mixed messages however this is part of a previous agreed upon deal that they decided maybe this is the time to go ahead and complete it the military the pentagon and they gyptian military is in close relationship and that really may be a lot of people would tell you really what defines the u.s. relationship as a whole and it seems like the u.s. relationship even be that necessarily more because they got twelve billion dollars in funding from the u.a.e. for you know saudi arabia so is the u.s. still relevant in these negotiations and how is the u.s. going to reassert its power if it wants to control this region many people were
arguing as the demonstrations were taking place in egypt that the u.s. influence in egypt is really do creasing and maybe the pledge of the arab countries do poor in money to egypt is just a proof to this theory however the u.s. is saying that no we still have and a lot of actually experts are saying that no we're still in touch with the egyptians and we do have leverage in egypt we do have influence there this is maybe . debatable issue only time will tell we've seen demonstrations in egypt against obama and against the us ambassador and only time will tell how much influence the us still does have an internal let's get to something maybe we could do about the relevance of aid in general my position is i'm against all for and it's a principled stance i think it only causes trouble i'm against the u.s. imperialism why should we give aid to anybody but it's not just egypt that's getting a lot of other countries are getting the aid to egypt however this is part of the
camp david peace deal so this is not some kind of. this is not some kind of charity that the u.s. has given to egypt many people you know there are many people would tell you that i'm just trying to explain the perspective of maybe they did since they gyptian is made the deal with israel the camp david peace treaty with the israelis and according to this quoting to this treaty bijections and the israelis where to get some aid they gypsies were getting that one point five billion the majority of which one point three billion was going into a military guess what that gets recycled back to the u.s. and other other countries it seems like foreign aid the biggest problem with it is it's not charity at all like you said it actually gets funneled to elites in the country and then it gets funneled back to u.s. corporations and now we have the i.m.f. maybe maybe the i.m.f. is going to be needed here but the i.m.f. is kind of a similar rock if they go into countries twist their arm they make them take the money because they need the money but then the i.m.f.
makes them pay high interest rates for years under so-called austerity plans made a beautiful song about dying nothing really that yes that's wonderful well what else can we say about this what are their issues what are the implications for the rest of the arab world are we going to see more arab springs. that's very hard to say now we've seen where the arab spring in syria has had and that's a direction that many people are afraid that maybe other countries are headed and that's why maybe a lot of people are considering why. it's going to happen first of these countries before we think maybe as a country and they're not about ok well i'm going to have to wrap this up so rima thank you so much for joining me if you want to weigh in on today's show be sure to like us on facebook at facebook dot com slash prime interest you can follow at home depot and you can follow me at english again thank you for joining me on today's daily tool and.
it was a day of manipulation here at prime interest first our beloved cherub and jawbone the roast market's up yet again and we learned apple will soon be a puppet of the feds now that they lost that antitrust lawsuit what can we say more about build evidence about goldman appeal ation is going to make a great book someday if somebody hasn't already written it and it looks like the same old story when it comes to gaming uncle sam's treasury department we got your number and we're sure he's quaking in his boots so thanks for watching and be sure to come back tomorrow from everyone here at prime interest have a great night. live
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edward snowden has quoted to me from god to edward he's been holed up and with the man himself expected to find a comment on america's global hunger for him. also civilians to breed pesos has a new a pool fighting of american corporations are raking in millions by selling your data to a government agency. or bringing you live pictures from egypt right now where rival crowds are encouraged to take to the streets all across the country i've be the country remains bold and political turmoil which some interruptions believe is playing into the. crowd and thousands of orange order members multiple small an island as police to.