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Q:  How does this new law in Minnesota affect Miles Franklin business?

Does the law mandate any reporting requirements to the state which would

compromise investor confidentiality? Is there a new state tax involved which would increase your cost of doing business, and thus be passed on to investor’s?

See article below:


David Schectman’s Answer:

The new Minnesota law does not affect Miles Franklin in a negative way.  We have taken all the required and necessary steps to be compliant.  The law is geared to police the firms that are shady and this has no effect on us.  Also, we are not considered a “dealer” by the State of Minnesota.  Client funds are not mailed to Miles Franklin in Minnesota.  They are sent to a trust account in North Dakota and our supplier handles the shipping.  That is how we have always done business, so in essence, we are not a Minnesota dealer.  The “dealer” is a large North Dakota wholesale company.  Nothing in the law will compromise your confidentiality and there are no new tax consequences to affect our pricing.

Q:  Can you explain what the cost basis (compared to actual cost) is on silver mining operations, I keep hearing of different mines that can produce from $8-$14 dollars an ounce? It sounds like a stock pump, but if its even close, I am getting very concerned about the price of silver and a better world for me tomorrow.

Bill Holter’s Answer:

There are several ways to calculate “cost” of production.  First, much of silver is produced as a byproduct of copper, zinc etc. production.  The value of the silver is used as a “credit” to lower the cost of the copper, zinc or whatever production.  As for pure silver mines, there is a “cash” cost and also an “all in” cost.  The cash cost consists of what it costs to mine the silver once the mine is up and running.  This would include equipment, energy, labor etc.  Then you have the “all in” cost which would include any monies spent on drilling and exploration, acquiring land or deposits.  While the average cash cost of production is currently in the mid to high teens per ounce, the average all in cost is mid-twenties.  Yes there are some low cost producers like Fortuna who have a cash cost of only $4 per ounce but as the price has dropped, more and more operations have turned unprofitable.  A perfect example is Aurcana with their Shafter, Texas mine, they have put their property on “care and maintenance” until the price rises presumably to $30 or more per ounce.  This is a deposit with over 100 million ounces which will not come to market and was projected to be the 3rd largest producer in the U.S.  In the end it will be supply and demand …the current manipulated prices are assuring that supply diminishes and demand increases.

Q:  President Obama said in a televised speech this month that American auto & manufacturing are flourishing.  Businesses are in their longest, uninterrupted stretch of job creation in history.  Is this just more propaganda and lies or is there truth to his claims?

I live in the Raleigh, NC area and I see, in the last year, construction including highway, homes, and apartment complexes really picking up.  Can you shed some light on this type of growth?  Is this going on in other parts of the country?

Many thanks for your Daily Summary, the information is invaluable.

Andy Hoffman’s Answer:

It sounds like the propaganda is getting to you – as well as the complimentary tools of manipulating markets, to paint a picture that fits that story.  Of course, let’s just forget the “glitch” in the story, in that rates have fallen to record lows despite the so-called recovery.  In other words, the “most damning proof yet of QE failure.”  Or the fact that commodities are crashing, including lumber.  Or that the majority of stocks are falling, whilst the “Dow Jones Propaganda Average” amazingly never falls.  Or that real economic data is at best flat, and negative when incorporating real inflation rates.  Or for that matter, that U.S. housing data has been declining for a year, as I wrote of in last week’s Housing “Recovery” – RIP.

Regarding housing, prices rolled over a year ago, and ONLY “1%” homes above $1 million are still selling – care of endless free money to Wall Street and rigged markets that pad bankers’ pockets with large bonuses.  Most new building is in the rental, multi-family units segment as home ownership has fallen to multi-decade lows.  Too bad rents are at all-time highs, too, squeezing consumers on both ends.  Permits, starts, and home sales are down – as are prices in all but the “1% segment.”  Not to mention, mortgage purchase applications at a 14-year low.  Frankly, the only “strength” in housing these days is the “confidence” of industry propagandists, who are bearish about the future about as often as Wall Street is about stocks.  Which is NEVER.

As for autos, of course Obama said that as he bailed out GM.  Which, by the way, has been an unmitigated disaster.  GM has executed record channel stuffing (of unwanted vehicles) in the past year, and all industry growth has been in leasing not buying.  Moreover, we’re at a record level of subprime auto lending as the Fed’s ZIRP policy has re-ignited the horrifying lending practices that led to the 2008 collapse.

Sorry so rambling, but mountains of evidence refute such conclusions.  And generally speaking, whatever a politician says, the opposite is most likely true – particularly with big elections upcoming.