tv Prime Interest RT July 11, 2013 8:30pm-9:01pm EDT
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 talked the markets up again even gold he said the easy money spigot will remain open wax on wax off well we'll talk market manipulation with the gatto 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 rolled 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 perry 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 arbitraging 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. 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 made it lee 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 bet 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 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 banks for international settlements the bank of other central banks and 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 fishel 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 j.p. morgan in the gold and silver markets another billion banks and it's quite a story actually. organization revealed j.p. morgan that is 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 to me. see if d.c. we expose how big it was we've gone to the sea of t.c. about if they refuse to do anything. testified how they are which were manipulating manipulating 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 you're chasing. 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 we have gold and we have physical gold we have various locations central banks how does it all fit together. question i mean people think that the paper market and physical
market are different in really i know why they say that but it's not because it's a london fix every day that's more 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 it's you know. been driven down from close to eight hundred dollars to just a while ago there. 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 those are funds for people many of 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 something like a sprout asset management where you know what you've got you can get your gold from 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 oppression scheme which was started by robert rubin and larry lawrence summers former treasury
secretaries of the united states so it's goal that was 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 forced 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 in the 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 to 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 the 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 since early october they've gone it just about as far as they can it may 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 moves coming in gold and silver you'll see silver over one hundred bucks goes going to at least three to five thousand dollars their game is about over they could have a few more weeks to go but that should be that's that's certainly sounds 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 job that i directed the as things seem 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 unsling say you can now advertise to the general public to sow shared and a public offering however you still have to be. wealthy two and that asked the rule permits and sure to engage in general solicitation provided that all purchasers of the securities are accredited investors and the issuer takes a reasonable steps to verify 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 confined to confine to your friends and families and colleagues limiting capital formation to those with substantial and halfling networks their appeal will give entrepreneurs and investors to mendis amounts of opportunities and possibilities to network and start new adventures 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 the c. chairwoman white addressed this issue and her opening statement at the meeting
yesterday. it's 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 s.e.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 the 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 while the jobs act was intended to help small businesses raise capital the way the rules were written it could be counterproductive adding 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 are innocent 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 as the si dot gov i will also 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
we go from goldman to be a lation in 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 howard these large corporations able to accomplish this all corporate profits of a share of g.d.p. have risen to all time highs while corporate income tax payments have fallen to lows the x.-axis here excuse me the y.
axis is 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 these 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 us is one of the highest corporate tax rates in the world at thirty five percent but there is something. it 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 arisan and wells fargo and these companies g. m 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 where smaller businesses can't afford that so it seems like these can train campaign turn to contributions are mostly for these financial committee
members and if that's true more than seventy percent of the money spent is on members leadership of the house in the senate as well as the senate finance committee members of the house ways and means committee members and the top five. beneficiaries from the thirty corporations that paid no taxes between two thousand and eight and ten are steady why are john boehner eric cantor 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 and 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 what 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 light the do bring good things to life but one of the things for their tax apartment is 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. imagination that would 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 two subsidiaries in 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 wrote 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 but in 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 today thank you. joining me is our two 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 administration which said on monday that suspending the annual one point five billion dollars support to cairo would quote not be in the best interests of the u.s. so i give the floor to you. well those that tell you that the u.s. does not really know how to handle the situation and i think that's i think that a lot of people will tell you that this is the answer especially because what happens in egypt. there is no definition of what's happening a what happened 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 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 much 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 maybe 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 may not even be that necessary anymore because they got about 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 a debatable issue only time will tell we've seen demonstrations in egypt against obama and against the u.s. ambassador and only time will tell how much influence the u.s. 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 of war 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 going to the aid 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 the difference they gyptian has
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 were 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. other other countries it seems like foreign aid the biggest problem with it is its own 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 to make them take the money because they need the money but the i.m.f. makes them pay. high interest rates for years under so-called austerity plans made a beautiful song about the i am not a really it yes that's wonderful well what else can we say about this what other 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 arab spring in
syria has had and that's a direction that many people are afraid that maybe other countries are had and that's why maybe a lot of people are considering what's going to happen first of these countries before with thing maybe other 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 thank you. it was a day of manipulation here
a prime interest first our beloved cherub and jawbone the response gets up yet again and we learned apple will soon be a puppet of the fed now that they lost that antitrust lawsuit what can we say more about 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 a prime interest have a great night. place . science technology innovation all the latest developments from around russia we've got the future covered.
is it possible to navigate the economy with all the details of his text and misinformation and media hype will keep you up to date by decoding the mainstream stating if in your mind. let me let me one wouldn't let me ask you a question. here on this network is what we're having a debate we have our nights out of. the previews the fleet was expecting there to get here in a situation where being free to talk about your mailing me.
today i'm politicking turmoil in egypt as the united states struggles to find the path forward immigration reform it hangs in the balance. and wonder new about leaker edward snowden it's all next on politicking with larry king. joining me on set is michael reagan president of the reagan legacy foundation and conservative commentator also the democratic strategist she worked for the two thousand and four kerry edwards campaign will get right into it guys the washington post called president obama's response to what's going on in egypt was the new york times said he's reacting with appropriate caution who.