A monthly publication by and for members of
The Silver Users Association

MARKET WATCH Month High Low Average September 6.92 6.13 6.40 August 6.67 6.52 6.69 July 6.71 5.94 6.37 June 6.17 5.63 5.85 May 6.19 5.51 5.85 April 8.21 5.82 7.06 March 7.94 6.71 7.29 February 7.94 6.04 6.47 January 6.63 6.20 6.36 back to top U.S. GEOLOGICAL SURVEY (USGS) The total amount approved: $939.4 million, an increase of $19.7 million above the administration?s requested level and $5 million below the House-approved level. The Committee rejected the administration?s proposed $6.4 million cut to the Mineral Resources program - the House also rejected this recommendation. This rejection was requested by NMA in its testimony to the Committee earlier in the year. Office of Surface Mining Reclamation and Enforcement (OSMRE) The total amount approved: $109.9 million for regulation and technology, a $1 million increase above the administration?s requested level and the House-approved amount. The committee directed the OSM to use the $1 million increase for a contract with the National Research Council of the National Academy of Sciences for a "study of coal to include, among other things, a review of coal reserves, an assessment of the categories of coal research currently being carried out in the United States, and a review of how technologies are being transferred to coal mine operators and other users." The panel also directed the OSM to have the "study completed within 2 years, interim reports to the committee as appropriate." The Abandoned Mine Land (AML) Reclamation Fund received $190.8 million, a $53 million decrease from the administration?s requested level and $3.3 million below the House-approved level. Regarding the reduction in funds for the AML Fund, the committee stated: "In the absence of legislation extending the collection of fees under the Surface Mining Control and Reclamation Act (SMCRA), the committee has not provided funds for the administration?s proposal to provide additional funds to pay down the state share balances in the AML fund of certified states." During the committee?s consideration of the bill, Ranking Member Robert Byrd (D-WV) offered an amendment that would extend the AML fee by one year - the authority to collect fees otherwise expires on Sept. 30. Interior Subcommittee Chairman Burns (R-MT) and Energy & Natural Resources Committee Chairman Domenici (R-NM) opposed the 1-year extension citing the authorizing committee?s efforts to deal with the issue and a six-month extension was suggested instead of one-year - in the end, the committee approved a nine-month extension by voice vote, which would extend the fee to June 30, 2005. back to top FCAP: AMERICA?S AIR QUALITY HAS ?DRAMATICALLY IMPROVED? America?s air quality has "dramatically improved" since passage of the Clean Air Act in1970 and continues to get better despite robust economic growth, the Foundation for Clean Air Progress (FCAP) said this week. Yet, nearly three-quarters of the American public believes air quality has either deteriorated or stayed the same, according to an August public opinion poll and a new study of government data, FCAP said. "There?s a clear disconnect between the nation?s significant emission reduction progress and public perception," said FCAP President William D. Fay. The organization commissioned the study and survey from Meszler Engineering Services and Wirthlin Worldwide, respectively. The group said the Environmental Protection Agency?s (EPA) own monitoring data show Americans are breathing "far healthier air than was the case in 1970." FCAP said the agency?s most recent data, for 2001-02, show: The health-based standards for nitrogen dioxide and sulfur dioxide were attained everywhere in the U.S. The standards for lead and carbon monoxide were attained in 3,129 of the nation?s 3,132 counties; 70 percent of the nation?s population now breathes air that meets the original National Ambient Air Quality Standards (NAAQS) for ozone; and, Exposure to particulates has been "significantly reduced." In the Meszler Engineering report, Ambient Air Quality Trends, EPA data collected at nearly 10,000 monitors in 2001-02 show "air quality in the U.S. is substantially better today than at any time since data collection began in earnest in the 1970s." The Wirthlin poll, however, shows that seven out of 10 Americans believe overall air quality has either diminished or stayed the same. "With so many Americans unaware of the dramatic air quality improvements, what we?ve got is a clean little secret," Fay said. Two important points, Fay said, are while air quality has improved since 1970, major economic indicators have risen as well. "The nation is producing more, driving more, consuming more energy and generally riding a three-decade wave of economic expansion," he said. "While logic might suggest that robust growth should generate more air pollution, the opposite is true. We have both healthier air and a healthy economy." In addition, the nation consumes 56 percent more electricity than it did in 1985, yet today?s nitrogen dioxide and sulfur dioxide emissions are approximately half of what they would have been had the utility industry not taken action to reduce pollution. "In short, industry has lowered, and will continue to lower, emissions in spite of continued growth in demand." back to top POSSIBLE SPIKE IN SILVER, PLATINUM MOVES LOWER, GOLD COULD BE VOLATILE IN BOTH DIRECTIONS Gold, silver, and platinum prices all rose sharply over the past three weeks. Gold rose from an intraday low of $383.80 on 2 August to $415.50 at one point Friday, 20 August. Silver rose from $6.11 at one point on 28 July to $7.01 on 20 August. Platinum shot from $791 on 28 July to $885.80 on 16 August. Prices came off for all three metals on Monday 23 August. Gold and silver prices continuing to fall on Tuesday, 24 August, but the prices for all three metals remain high by recent standards on a short-term basis. Over the next few weeks, these markets may diverge in their price directions. Silver prices could rise sharply. It had seemed like another round of selling could have pushed silver lower first, but with the September contract now just five business days away, that may not occur. Platinum meanwhile remains vulnerable to a further steep drop, before the approach of its active Nymex futures contract becomes an issue. Gold appears set to be volatile, with large moves possible in both directions. Palladium treaded in place for most of early August, showing a bit of strength late last week, while copper rose roughly 10 cents. Palladium looks like a top being wound up for release, having sat out the recent rally in other metals? prices. Copper prices have shown a good deal of strength, consolidating at a higher level, which some in the market believe may be the precursor of a major upward bolt in prices in the next few weeks. Silver Silver prices could spike sharply higher over the next two weeks. The active September contract becomes deliverable on 1 September. As of 20 August there were 259.7 million ounces of open interest in the September contract. There were 58.9 million ounces of silver registered against this, and another 52.5 reported by not registered. Over the next five trading days, the shorts are going to have to offset their commitments. This probably will apply upward pressures on silver prices. The silver market is tight, meanwhile, with strong demand from both industrial users and investors. back to top SMALL BUSINESS ECONOMIC CONDITIONS IMPROVE IN THE SECOND QUARTER Economic conditions for small business improved in the second quarter of 2004 according to the recently released Quarterly Indicators: The Economy And Small Business. The report, issued by the Office of Advocacy, shows proprietors' income increased at an annualized rate of 14.8 percent and the National Federation of Independent Business (NFIB) optimism index remained in record high territory. "The outlook for small business continues to be good," said Thomas M. Sullivan, Chief Counsel for Advocacy. "The economic conditions in the second quarter place small business in a strong position. Over the past year the economic trends have been positive and that's been good for small business owners and their employees." The report draws on a variety of data sources to describe the economic conditions faced by small business, which account for a significant portion of the overall economy. It is the second release in a new quarterly series that is a single source for current data on small business. The report notes that interest rates remained low with the prime rate at 4.0 percent while the rate for small business loans of less than $100,000 averaged 4.2 percent. Worker productivity remained strong with a 4.6 percent increase in nonfarm business output per hour. And, the 2.8 percent increase in Gross Domestic Product (GDP) marked the eleventh consecutive quarter of positive real output growth since the recession of 2001. The Office of Advocacy, the "small business watchdog" of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues. back to top PRESIDENT SET TO APPOINT TAX PANEL The White House says President Bush will, by Executive Order, create a bipartisan panel to advise the Treasury Secretary on options to fundamentally reform the tax code." The panel will be asked for "revenue-neutral options" and report back to the secretary "as early as possible in 2005." This proposal addresses a recommendation in the Commerce Department?s "Manufacturing in America" report that calls for a Treasury Dept. "study of tax simplification that focuses on provisions that are particularly complex for manufacturers," including depreciation, corporate AMT and the R&D credit. back to top HOUSE PASSES "JUNK FAX" BILL The House adopted H.R. 4600, the Junk Fax Prevention Act, before it adjourned in August. The Senate Commerce Committee approved similar bill S. 2603, clearing the bill for floor action. SUA members are urging the Senate to act quickly on S. 2603, so that the House has time to act on any changes and send a final bill to the President by the end of September. A consumer group, staff at the FCC and a couple of State Attorneys General have objected to some provisions in the bill and are requesting changes opposed by the business community. Manufacturers want a bill that will recognize that organizations with established business relationships with customers or members may send them "advertising" faxes without the extremely strict and burdensome paperwork requirements recently mandated by the FCC. The FCC's new rule, scheduled to become effective January 1, 2005, has prompted an outcry from many businesses because the mandatory paperwork requirements will not help solve the junk-fax-to-consumers problem. back to top NEW "FAIRPAY INITIATIVE" SET TO GUARANTEE OVERTIME RIGHTS FOR MILLIONS OF WORKERS United States Secretary of Labor Elaine Chao announced last month that the final rules governing overtime eligibility for white-collar workers under the Fair Labor Standards Act are now in effect as of August 23, 2004. The newly updated Overtime Security Rule is said to strengthen and protect overtime pay for 6.7 million American workers. The new rules clarify and update ambiguous and confusing overtime regulations that were first created back in 1939 and have not been substantially updated in fifty-five years. The new rules are getting mixed reviews. On the one side you have the labor folks who believe these new rules are harmful and will take overtime pay away from those in the middle income bracket. Labor groups do admit that these new regulations will help lower tier paid employees, but will jeopardize middle income families who rely on overtime to pay their monthly bills. While stumping in Wisconsin recently Democratic Vice Presidential nominee Senator John Edwards (D-NC) echoed this sentiment when he told crowds that a Democratic administration would protect overtime pay, increase minimum wage and keep jobs from going abroad. Sen. Edwards told supporters that the current Bush administration regulations would deprive 6 million U.S. workers of a way to supplement their incomes. The Bush administration was quick to reply to the Kerry-Edwards attack pointing out the new regulations would grant overtime pay to some workers not now eligible. As the November elections draw closer you can expect both sides to blur the line of who is helped and hurt by the new regulations. According to Secretary Chao the new Overtime Security Rule will provide stronger protections for workers with new sections added that clearly state "blue-collar" workers, police officers, fire fighters, paramedics, emergency medical technicians, and licensed practical nurses are entitled to overtime protections. Although the administration has included these new sections, some groups, like nurses are fearful that they will fall victim to the loss of overtime pay, which will in turn be harmful to doctors and patients as nurses will decline to work longer shifts for the same pay. With a nursing shortage in this country, the new rules could have a major impact to the health of millions of Americans. Some groups say this is only one example of the consequences of the new rules. To help SUA has put together a review of the Overtime Security Rule to help employees and employers a like weave through the regulatory maze. Under the new rules, commonly referred to as the "FairPay" regulations, the number of workers eligible for overtime is expanded by nearly tripling the salary threshold. Under the previous 50-year-old regulations, only workers earning less than $8,060 annually or $155 per week were guaranteed overtime. Under the new FairPay rules, workers paid less than $23,660 or $455 per week are now automatically guaranteed overtime regardless of their titles or duties. A number of salaried workers earning above this threshold will also gain the right to overtime under the new, stronger rules. This strengthens overtime protections for 6.7 million low-wage salaried workers, including 1.3 million salaried white collar workers who were not entitled to overtime pay under the previous regulations. Businesses will have to pay an additional $375 million and workers will gain that amount in additional earnings every year. Hourly workers are guaranteed overtime regardless of how much they are paid. Blue collar and manual laborers and workers, such as construction workers, operating engineers, carpenters, and longshoremen are also guaranteed overtime under these newly effective rules. Police, firefighters, emergency medical technicians, licensed practical nurses and other first responders now have strengthened overtime protections. Union workers under collective bargaining agreements are not impacted. SIDE-BY-SIDE COMPARISON OF OLD AND NEW REGULATION: Comparing the Tests for Executive Employees   Short Test Before 08/23/2004 Standard Test Effective 08/23/2004 Salary Level $250 per week $455 per week Duties Whose primary duty consists of the management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; and Includes the customary and regular direction of the work of two or more other employees therein. Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; Who customarily and regularly directs the work of two or more other employees; and Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. Comparing the Tests for Administrative Employees   Short Test Before 08/23/2004 Standard Test Effective 08/23/2004 Salary Level $250 per week $455 per week Duties Whose primary duty consists of the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employer?s customers; and Which includes work requiring the exercise of discretion and independent judgment. Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer?s customers; and Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Comparing the Tests for Professional Employees   Short Test Before 08/23/2004 Standard Test Effective 08/23/2004 Salary Level $250 per week $455 per week Duties Whose primary duty consists of the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study; and Which includes work requiring the consistent exercise of discretion and judgment; or Whose primary duty consists of the performance of work requiring invention, imagination, or talent in a recognized field of artistic endeavor. Whose primary duty is the performance of work requiring knowledge of an advanced type (defined as work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment) in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or Whose primary duty is the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Comparing the Tests for Outside Sales Employees   Short Test Before 08/23/2004 Standard Test Effective 08/23/2004 Salary Level No minimum salary required No minimum salary required Duties Who is employed for the purpose of and who is customarily and regularly engaged away from the employer?s place or places of business in making sales; or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and Who does not devote more than 20 percent of the hours worked in the workweek by nonexempt employees of the employer to activities that are not incidental to and in conjunction with the employee?s own outside sales or solicitations. Whose primary duty is making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and Who is customarily and regularly engaged away from the employer?s place or places of business in performing such primary duty. Comparing the Tests for Computer Employees   Short Test Before 08/23/2004 Standard Test Effective 08/23/2004 Salary Level $250 per week or, if paid hourly, 6 ? x $4.25 (i.e., $27.63 an hour) $455 per week or $27.63 an hour Duties Primary duty of performing work that requires theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering, and employed and engaged in these activities as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field, as provided in ? 541.303, which includes work requiring the consistent exercise of discretion and judgment. ? 541.303(b): Whose primary duty consists of one or more of the following: The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or A combination of the aforementioned duties, the performance of which requires the same level of skills. Computer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field are eligible for exemption, but only if the employee?s primary duty consists of: The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or A combination of the aforementioned duties, the performance of which requires the same level of skills. EXEMPTIONS Executive Exemption To qualify for the executive employee exemption, all of the following tests must be met: The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week; The employee?s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and The employee must have the authority to hire or fire other employees, or the employee?s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. Administrative Exemption To qualify for the administrative employee exemption, all of the following tests must be met: The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; The employee?s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer?s customers; and The employee?s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Professional Exemption To qualify for the learned professional employee exemption, all of the following tests must be met: The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; The employee?s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; The advanced knowledge must be in a field of science or learning; and The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. To qualify for the creative professional employee exemption, all of the following tests must be met: The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; The employee?s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Computer Employee Exemption To qualify for the computer employee exemption, the following tests must be met: The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour; The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below; The employee?s primary duty must consist of: The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or A combination of the aforementioned duties, the performance of which requires the same level of skills. Outside Sales Exemption To qualify for the outside sales employee exemption, all of the following tests must be met: The employee?s primary duty must be making sales (as defined in the Fair Labor Standards Act (FLSA)), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and The employee must be customarily and regularly engaged away from the employer?s place or places of business. Highly Compensated Employees Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption. Blue Collar Workers The exemptions provided by FLSA Section 13(a)(1) apply only to "white collar" employees who meet the salary and duties tests set forth in the Part 541 regulations. The exemptions do not apply to manual laborers or other "blue collar" workers who perform work involving repetitive operations with their hands, physical skill and energy. FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt under the Part 541 regulations no matter how highly paid they might be. Other Laws & Collective Bargaining Agreements The FLSA provides minimum standards that may be exceeded, but cannot be waived or reduced. Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances establishing a higher minimum wage or lower maximum workweek than those established under the FLSA. Similarly, employers may, on their own initiative or under a collective bargaining agreement, provide a higher wage, shorter workweek, or higher overtime premium than provided under the FLSA. While collective bargaining agreements cannot waive or reduce FLSA protections, nothing in the FLSA or the Part 541 regulation relieves employers from their contractual obligations under such bargaining agreements. back to top TIFFANY SUES EBAY A major lawsuit was filed recently against eBay. Tiffany Company is claiming eBay the auction site profits from the widespread sale of counterfeit Tiffany products. Tiffany did a test buy of some 186 silver jewelry products said to be Tiffany?s. Of the total, 73% turned out to be fake, 5% were genuine, and 22% fell into a gray area (for example, some were described as Tiffany inspired). Tiffany lawyers say that the company felt it had a particularly strong complaint against eBay since the online company had bought sponsored links for Tiffany?s on Google and Yahoo, and because the retailer has such a tight distribution network. In response, an eBay statement says "We have not seen a complaint yet, so we can?t comment on it specifically. However, we take these concerns very seriously, which is why we have worked closely with Tiffany and thousands of other rights owners for many years through our VERO Program to help address these types of issues." back to top SUA FALL MEETING: A LOOK AHEAD TO 2005 October 18, 2004 SUA members and prospects arrive in Washington at the Army-Navy Club October 19, 2004 Meeting of the committee chairs to discuss budget and other programs 5:30 p.m. Reception to welcome SUA members with emphasis on welcoming prospects 6:15 p.m. Buffet dinner w/ speaker (Sponsored by Mitsui & Company (USA) Inc.) Invited Speaker: Dave Wenhold, One of Washington?s top grassroots tacticians October 20, 2004 8:00 a.m. Sit down breakfast (Sponsored by Ames Goldsmith) Invited Speaker Lisi Kaufman, Chief of Staff for Commerce Secretary Don Evans 9:30 a.m. Board Business 10:30 a.m. Invited Speaker Amy Swonger, Deputy Asst. to the Vice President for Legislative Affairs 11:00 a.m. Invited Speaker Kelly Ludlum, Majority Staff Director, House Agriculture General Farm Commodities & Risk Management Subcommittee 11:30 a.m. Stephen Gold, NAM 12:00 p.m. Adjourn ** Other Guests Include: Jeff Christian, CPM Group back to top About SUA The Silver Users Association is a non-profit organization that was established in 1947 to represent the interests of companies that make, sell and distribute products and services in which silver is an essential component. The Washington Report is a member service of the Silver Users Association. 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