MARKET WATCH
| Month |
High |
Low |
Average |
| January 2005 |
6.85 |
6.43 |
6.63 |
| February 2005 |
7.52 |
6.55 |
7.07 |
| March 2005 |
7.60 |
6.91 |
7.27 |
| 2004 |
8.21 |
5.51 |
6.67 |
ASSOCIATION NEWS
News:
Meetings:
- SUA Spring Meeting Dates Set
May 17-18 in Washington, DC at the Army-Navy Club.
Anyone interested in sponsoring, please contact Paul Miller at pmiller@mwcapitol.com.
- JCK June 3-7
Las Vegas, NV
Note:
- Please send us any updates to your company profile so that we can update our records and web site.
SILVER USERS ANNOUNCES ITS MAY MEETING AGENDA
Monday, May 16, 2005
SUA members and prospects arrive in Washington at the Army-Navy Club
Tuesday, May 17, 2005
8:00 a.m. Leave for golf course
3:00 p.m. Return from golf
4:30 p.m. 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/ invited speaker: David Lebryk, Deputy Director, United States Mint
Wednesday, May 18, 2005
8:00 a.m. Sit down breakfast w/ invited speaker: Richard Maxwell, V.P. Trade, Finance and Insurance, Export-Import Bank of the United States
9:30 a.m. Board Business
10:30 a.m. Invited Speaker: John Duncan, Assistant Secretary for Legislative Affairs, Department of the Treasury
11:00 a.m. Invited Speaker: Lucinda Low, Miller & Chevalier. Topic: Money Laundering
11:30 a.m. Invited Speaker: Michael Gorham, CFTC
12:00 p.m. Adjourn
BUSH SIGNS CLASS ACTION REFORM INTO LAW
President Bush signed the class action bill (S. 5) into law last week with support from both sides of Congress. The bill - the Class Action Fairness Act of 2005 - also supported by business groups and tort reform advocates, will relax procedural rules for transferring large, multi-state class actions from state court to federal court.
Supports of the bill say it is needed to end so-called "forum shopping" by plaintiffs' lawyers who file a disproportionate number of class actions in a few state court jurisdictions, resulting in huge attorney fee awards at the expense of plaintiffs.
Opponents of the bill include consumer, civil rights and environmental groups say that federal courts will not be as receptive to hearing class actions based on state law, leaving consumers and others without adequate access to the courts.
President Bush he now plans to work with Congress to pass reforms for the asbestos and medical liability systems.
CPO CONSENTS TO COURT ORDER FOLLOWING CFTC CHARGES OF FRAUD
The U.S. District Court for the District of Maryland entered a consent order of permanent injunction late last month against a former resident of the state accused by the Commodity Futures Trading Commission of misappropriating customer funds (CFTC v. Silberstein, D. Md., 1:04-cv-666, 2/28/05).
In a March statement, the commission said Andrew Silberstein also operated as a commodity pool operator without registering with the CFTC and issued false account statements to clients.
The February 28 order permanently bars Silberstein from future violations of the Commodity Exchange Act, trading commodity futures or options for himself or on behalf of others, and engaging in any securities or investment advisory business in Maryland. He also will pay a $120,000 penalty and $440,000 restitution.
According to the commission, Silberstein initially solicited and pooled approximately $632,000 from at least seven clients to trade S&P futures contracts. The order finds he misappropriated approximately $146,000 from that pool for his personal use, and lost $220,000 in trading.
Furthermore, the order found that the defendant concealed his misappropriation and trading losses from clients by sending them false account statements showing his trading on their behalf was profitable.
NATIONAL MINING ASSOCIATION'S GERARD LEAVES POST
After a long search for a new president and CEO, the American Chemistry Council has called on an executive from outside the industry: Jack Gerard, the president of the National Mining Association since 2001 and a top fundraiser for President Bush's 2004 re-election campaign.
Gerard will start at the Council on July 1, is one of K Street's highest-paid association executives, receiving a compensation package of almost $1.1 million in 2002.
PROPOSED RULES ON MANUFACTURING TAX BREAK EXPECTED BY SUMMER
The government hopes to propose rules on a newly enacted domestic manufacturing tax break by summer and is looking at a wide range of issues under the relief, including contract manufacturing and the definition of qualified activity.
The proposed regulations are "on track" for this summer and the government wants final rules out by April 21, 2006 - 18 months after the tax break was signed into law as part of the American Jobs Creation Act. The rules would implement Notice 2005-14, the first ser of comprehensive guidance under new tax code section 199, Deduction for Qualified Production Activities.
In the contract manufacturing area Treasury is said to be considering some safe harbors under the proposed rules, but it is doubtful the government will change the test for ownership of property in a contract manufacturing situation. That test, which grants the tax break to the party that has the benefits and burdens of ownership during the manufacturing process, has drawn significant criticism from the tax community.
COURT FREEZES ASSETS, RECORDS AFTER CFTC ALLEGES FRAUD
The U.S. District Court for the Southern District of Florida froze the records and assets of several individuals and companies recently after they were charged by the CFTC with fraudulently soliciting customers to trade foreign currency futures contracts and misappropriating funds.
The defendants Mercury Partners Inc., Mercury Financial Partners Inc., Mercury Management LC, Bruce Crown, Andrew Bartos, and Michael Morgan all violated the Commodity Exchange Act and CFTC regulations. According to the commission, the accused solicited approximately $140,000 from customers for the purpose of trading options on foreing currency futures contracts.
DEATH TAX REPEAL LIKELY TO PASS HOUSE
The House is expected to approve SUA-backed H.R. 8 (Hulshof-R-MO) this week. It would permanently repeal the death tax, which is phased out in 2010, but returns in 2011 under previous legislation.
Death Tax Repeal Permanency Act of 2005 - Declares that the sunset provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, which terminate its application to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010, shall not in fact apply to title V of such Act, which repeals estate and generation-skipping transfer taxes. (Thus makes the repeal of such taxes permanent.)
STUDY SAYS PACT IS "UNAMBIGUOUSLY A WINNER"
The U.S.-Central American and Dominican Republic Free Trade Agreement (CAFTA-DR) is "unambiguously a winner" for U.S. manufacturing, according to a new analysis by the National Association of Manufacturers (NAM).
The study says the agreement will level the playing field for U.S. exporters by providing the same open access to CAFTA-DR markets that these countries already have to the U.S. market. "This study reiterates why this agreement should be a no-brainer," said John Engler, president of the NAM. "CAFTA-DR will level the playing field for U.S. manufacturers, generate $1 billion of new U.S. manufacturing exports, save billions of dollars in existing exports, promote democracy and political stability and improve the labor and environmental conditions in the region.
"People who claim that CAFTA-DR will have a detrimental impact on the U.S. economy are seriously mistaken," Engler said. "Together these seven countries have an economy the size of Sacramento, California. To say they pose a major threat to us is ludicrous."
"On the other hand, they offer a major opportunity for U.S. exporters," Engler continued. "The NAM analysis concludes that CAFTA-DR will provide U.S. manufacturers $1 billion of additional manufactured goods exports, creating some 12,000 related job opportunities for American workers in the process. But without the agreement, the U.S. stands to lose up to $4 billion in existing exports to CAFTA countries, affecting up to 48,000 U.S. jobs."
Engler said failure to approve CAFTA-DR would effectively shift business from Central America to Asia. "If these countries were to lose their apparel industry to Asia, particularly China, more than half a million people in the region would be put out of work," Engler said. "Can you imagine the effect this would have on political stability in the region and the pressure it would create to migrate to the United States? CAFTA-DR needs to be passed at the earliest possible opportunity!"
CHINESE IMPORT GROWTH DWARFS THAT OF OTHER TRADING PARTNERS
As the U.S. trade deficit widened last month despite an increase in U.S. exports, the National Association of Manufacturers today pointed to China's continuing currency manipulation as a "major cause" for the stubborn imbalance.
The U.S. trade deficit increased $2.5 billion to a record $61 billion in February, according to the latest Commerce Department figures. Though U.S. exports edged up slightly to $100.5 billion, imports rose $2.6 billion to $161.5 billion. "The dollar has moved back toward historic levels against most market-determined currencies," observed NAM Vice President for International Economic Affairs Frank Vargo. "Not surprisingly, imports from trading partners with such currencies have slowed considerably and U.S. exports to them have picked up.
"But China and some other Asian nations continue to keep the dollar artificially high so they can keep their exports to us far higher than they would be without such anti-market manipulations," Vargo explained. "After adjusting for relevant price changes," Vargo continued, "the volume of Canadian and Mexican imports was up just 4 percent in February over the previous 12 months, and the volume of E.U. imports was up less than 2 percent. "By contrast, China's imports have increased by 51 percent during the same timeframe and have accounted for a whopping 44 percent of growth in overall goods imports to the U.S.," Vargo noted.
"It's most unfortunate that the dollar's correction has been shouldered only by those economies that don't artificially manage their currencies for export promotion. To correct this problem, the Administration, other governments and international institutions must work harder to persuade countries such as China to let their currencies be valued by market forces. The current situation hurts countries playing by the rules and dangerously fans neo-protectionist embers," concluded Vargo.
UNINSURED WORKERS NOW CAN GET SUBSIDIZED AFFORDABLE HEALTH PLAN BENEFITS AT LOW OR NO COST TO EMPLOYER
Voluntary Benefits Solutions (VBS) offers good news to business owners of small- to medium-size operations who thought it was beyond their means to provide health care for hourly workers. Certain uninsured workers can receive benefits at no cost to employers, or without employers paying a small fortune.
Fairfield-based VBS can subsidize health care premiums for uninsured workers and their families using such carriers as Blue Cross, HealthNet, Kaiser and Colonial Life. What is equally as important is companies can lower existing premium costs up to 50% and keep their current health network, providers and doctors.
A code by the federal government enables VBS to bring affordable health coverage to those who need it most - the approximately 30 million working poor and their dependents living in the U.S.
Now employees earning salaries ranging from $6.75 to $16 an hour qualify for benefits as long as there is a minimum of one dependent child in the household. The eligibility extends to workers regardless if they are employed full- or part-time, temporary or contracted. Many companies that pay low wages - mom-and-pop businesses, franchise owners, franchisors, childcare centers, manufacturing, and other industries - can now present workers with peace of mind knowing their health needs can be met through the VBS system.
Both major comprehensive and supplemental benefits are available for the target workplace, according to Tyrone Moore, VBS Chief Executive Officer, an industry veteran of 16 years. "We also provide administrative support to HR and payroll departments to ensure a smooth process for the administration and implementation of the VBS benefits package," Moore said.
VBS is licensed to operate in eight states, including California and Georgia, which are among the few with the highest population of uninsured working families. Licenses are pending in 10 states, and VBS' goal is to reach all 50 states.
"Employers benefit from lower costs in workers compensation claims and FICA taxes, and improved retention and recruitment among lower- and mid-level skilled workers," Moore said. Bay Area employers praise VBS' services, including Chet P. Hewitt, agency director of Alameda County Health & Human Services, which had been unable to fully meet the need of its uninsured due to the state budget and the rise in health care costs. "Fortunately, the good news is that Alameda County has recently partnered with VBS to address this need of affordable health care for the uninsured workers in the county," Hewitt said.
"VBS was the only broker willing to work with us and [was] able to get us coverage through Blue Cross," said Janet Mosley, Vice President of Operations at The Child Care Coalition in Vacaville, CA. "VBS has been a lifesaver in keeping our employees covered and happy."
A DIGITAL BOMBSHELL
by Ted Butler
For the past few years, the main bearish argument against silver has been the encroachment of the digital process in photography. Particularly in the amateur consumer category, it has been argued, incessantly, that the silver-halide film process would be made extinct by digital.
It did not matter to the bears that the film process was the main source of silver recycling, and the demise of film in photography would greatly reduce the supply of recycled silver. Nor did the bears care that much of the printing of photographs from digital cameras was on paper containing silver. All that mattered in the hundreds and hundreds of articles written over the past few years was that silver was dead on arrival in photography, thanks to the explosive growth of digital cameras. People, who literally knew nothing about the real facts in silver, knew enough to pronounce digital would kill silver photography.
Certainly, there was no denying the sales growth of digital cameras. Even though the first digital camera (Sony's Mavica) was introduced more than 25 years ago, the same year as IBM's Personal Computer, sales of digital cameras only took hold in the past few years. But if there was a delayed reaction by the consumer to embrace digital photography, it was more than made up in a hurry. Nowadays it's almost impossible to even find advertisements for regular film cameras. Digital cameras have been just about the hottest and most popular consumer electronic item for the past few years, sporting strong double-digit growth, year after year.
Since we have all become accustomed to the high sales growth rate of digital cameras, my reaction was nothing short of shock to this article that appeared; on April 4, in the prestigious Financial Times of London. It's such a bombshell, in my opinion, that I am reprinting it in its entirety. Japanese exports of digital cameras fall in February.
The decline in exports reflects falling global demand and a saturated market. However, demand is still growing in North America. By Michiyo Nakamoto Financial Times Exports of digital cameras from Japan fell for the first time in February, highlighting the rapid reversal of fortunes in what was once a fast-growing market. Japanese digital camera exports in that month totaled 3.29 million units, a decline of 0.9 percent year-on-year said the Camera and Imaging Products Association.
On a value basis, the decline in exports was even steeper, at 11%, reflecting the sharp drops in digital camera prices that have plaged the industry. The decline in digital camera exports by Japanese manufacturers, which control about 80 percent of the world market, reflects the deterioration in the balance of global demand and supply as manufacturers have increased shipments in spite of growing market saturation. Exports to Europe, in particular, declined 10.7 percent, for reasons not clarified in the CIPA report. The large drop in shipments to Europe wiped out a 3 percent increase in exports to North America.
The deterioration in the profitability of the digital camera market was underscored recently when Sanyo Electric said it would make a bigger-than-expected loss in the year ended in March, due to declining demand for its digital cameras. Sanyo is the world's largest maker of digital cameras, most of which it supplies to third parties that market them under their own brands. The group had initially forecast digital camera shipments for the year ending last month of 18 million units, but was forced to revise this figure down to as little as 11 million.
However, Sanyo said the sharpest decline came in the Japanese rather than overseas market. Meanwhile, Olympus said it would make an $166 million operating loss in its imaging division, which is believed to be largely as a result of losses in its digital camera business. The pressure has hit Kyocera, which last month said it would wind down production of current models and not develop new ones. In spite of the gloomy news elsewhere, the value of digital camera shipments within Japan rose moderately in February helped by the shift to more expensive, single-lens reflex cameras. Both Sanyo and Sony, a major supplier of digital cameras that expects to have increased shipments from 10 million in fiscal 2003 to 14 million last year, said they expected price trends to stabilize this year.
My main conclusion, of course, is how this digital camera sales fall-off relates to silver. Here, I think the impact could come sooner. For years, we have been conditioned to assume that digital will replace film. This is a slap in the face to that way of thinking. I think there are many people who will be shocked by this new information. The main bear argument has been dashed in an instant, by the facts. With all the bullish arguments for silver still intact, who would have thought that the main bearish argument would be seriously challenged? The most ironic aspect to this digital camera debate is that the very time of maximum sales and recognition of their penetration in the market, over the past two years, that has occurred precisely at the same time silver has acted better in price than any time in the past two decades. I mean, if digital was making film obsolete, why would the price of silver behave so well? Now, we may have an answer - the future doesn't bode so well for digital cameras.
SINO SILVER COMPLETES ACQUISITION OF 60% INTEREST IN SINO-TOP RESOURCES & TECHNOLOGIES, LTD.
Sino Silver Corp. ("Sino Silver") (OTCBB:SSLV - News) is pleased to announce that Sino-Top Resources & Technologies, Ltd. ("Sino-Top") has obtained its business license from the Chinese authorities. Sino Silver has also completed the funding of the acquisition of its 60% equity interest in Sino-Top. Sino Silver acquired its 60% equity for $1million, $500,000 of which has been paid, with the balance due over a two-year period. Sino-Top owns exploratory rights to four properties in the Erbaohuo Silver District in Northern China and has options to acquire exploration and mining rights to seven additional properties in that territory.
The four properties cover an area of 105.2 km2 and were identified by the North China Nonferrous Prospecting Bureau General Exploration Agency (NCGEA) as hosting silver-polymetallic mineralization in skarn and fracture controlled geological environments. Sino-Top expects to begin exploration and development work in early April consisting of geological, geochemical and geophysical surveys, trenching, underground tunneling and diamond drilling.
In addition, Sino Silver has signed a Letter of Intent with Silver Dragon Resources, Inc. (OTCBB:SDRG - News; "Silver Dragon"), relating to the sale of fifty percent (50%) of its interest in the net proceeds from the sale of minerals or mining rights, as a result of the exploration, evaluation and possible future development of the Aobaotugounao Ag-Pb-Zn property by Sino-Top.
This sale is subject to a number of conditions, including, but not limited to, the delivery to Silver Dragon of all geological and technical data related to the property and execution of a definitive agreement. The transaction requires a total payment by Silver Dragon of $350,000 to Sino Silver, with $150,000 presently held in escrow, to be paid upon the signing of the agreement and the balance to be paid over two years. Sino Silver will also receive 500,000 shares of common stock of Silver Dragon over a one-year period. No assurances can be given, however, that this transaction will be consummated.
Certain statements in the news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to plans for future business development activities and prospective financial matters. Such forward looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Potential risks and uncertainties include, but are not limited to, general economic conditions, specific factors affecting the silver markets, competition, interest rate sensitivity and exposure to regulatory and governmental requirements and changes, as well as those risks disclosed on the Company's Annual Report of Form 10-KSB for the year ended December 31, 2004.
NEW JERSEY MINING COMPANY GETS SILVER STRAND APPROVAL
New Jersey Mining Company (OTC BB:NJMC.OB - News) announces that it has received a Decision Notice and Finding of No Significant Impact from the U.S. Forest Service (USFS) for its Silver Strand mine project in the Panhandle National Forest east of Coeur d'Alene, Idaho. The decision was made by officials of the Coeur d'Alene River Ranger District.
Once a 45-day appeal period is completed, NJMC can commence operations after submitting a revised Plan of Operations that incorporates a few modifications stipulated by the USFS, receiving all third party permits (most of which are in hand), and posting a reclamation bond.
The Silver Strand mine contains reserves of silver-gold ore that will be mined and shipped to the Company's mill near Kellogg, Idaho. Currently, ore reserves and resources stand at 17,500 tonnes with a grade of 5.87 grams per tonne (0.171 ounces per ton) gold and 337 gpt (9.8 opt) silver. The primary focus of the mining operation will be to expand the silver-gold resource by exploring the orebody at depth by driving a ramp downward, and at the same time recover gold and silver from the ore to help finance the exploration. A mining rate of 1,000 tonnes per month is planned for the Silver Strand in a seasonal operation typically operating from April through November.
Management thinks that the Silver Strand is an excellent exploration property with potential for a deposit containing up to 100 million ounces of silver equivalent. A comprehensive geophysical survey has recently been completed to help understand the structure of the mine area and to reveal extensions of the known mineralization which are obvious drill targets. A second prong of the exploration plan for the Silver Strand will be to drill these geophysical anomalies from the surface and underground. One of the geophysical anomalies will be intercepted by the ramp planned for the mining operation.
New Jersey Mining Company is involved in exploring for and developing gold, silver and base metal ore resources in the Coeur d'Alene Mining District of northern Idaho. The Company has a portfolio of mineral properties in the Coeur d'Alene Mining District including the New Jersey mine, the Silver Strand mine, the Golden Chest mine, the CAMP project, the Scotch Thistle project, and the Silver Button project.
This release contains certain forward-looking statements within the meaning of the Federal Securities Laws. Such statements are based on assumptions that the Company believes are reasonable but which are subject to a wide range of uncertainties and business risks. Factors that could cause actual results to differ from those anticipated are discussed in the Company's periodic filings with the Securities and Exchange Commission, including its annual report on Form 10-KSB for the year ended December 31, 2004.
ELLIOTT WAVE UPDATE ON SILVER: MANY TRIANGLES IN PLAY
By Dan Stinson
The last newsletter included a chart for Silver and the count for Silver has played out as forecasted. We have even more detail and further insights on what we can expect to occur next.
We have been neutral on Silver and the Silver stocks that we cover since the last newsletter when we projected the price of silver to drop below $7.00. Now that Silver has broken below $7.00, many are wondering what to expect now. Triangles are corrective patterns, but can sometimes extend further than expected and can also re-define the angle of the triangle with a wave that travels further than expected. This occurred with one stock that we are following, but it did not change our status on this stock because we were aware of the triangle. We even labeled the top trendline of the triangle for this stock as suspect for a higher price for wave d. It was not a recommended buy at that juncture.
We have identified many triangles, including Silver, HUI and gold and numerous silver stocks, that all appear very similar and are moving together.
The Silver chart below indicates that wave e of the contracting triangle is still in play. This wave can complete as a zigzag(abc) or a smaller contracting triangle(abcde) itself. After examining many Silver contracts and Silver stocks, we will likely see the final wave e complete as a contracting triangle. This would indicate that we should see continued choppy sideways action as the price action moves tighter into the apex of the triangle. The sideways action in a triangle is the indecision in the markets and we should expect an explosive breakout when the decision is made. We still believe we should see the breakout to the upside, but with the analysis of this triangle pattern, we can wait and let the market tell us. The price action at the apex of the triangle and subsequent breakout should be close to the lowest price for the wave e low, so we can wait for a clear signal as the triangle progresses. Our analysis on the USD and Gold also supports this count. We should see further upside for the USD and support at the lower triangle trendline and especially the wave c low is crucial for the breakout to the upside of the triangle. We are watching Gold as well and it should also maintain price action above the lower trendline as the USD completes its current rally.
Notice that the Feb 24th chart had a false spike for the wave d high. This spike made little difference to the outcome of the forecast and the subsequent ABC pattern to follow, but what it did do, is make us aware that the following wave e, had to complete as 3 waves(abc) or 5 waves (abcde) and there would be further sideways action to complete the triangle. The Feb 24th wave d high was not complete and it utilized the ABC to complete its wave, instead of the beginning of the wave e zigzag. These points are very small, but this is the depth of analysis that is involved in providing the most accurate forecast possible. This updated chart should make the forecasted price action easier to follow, with the wave e zigzag and triangle options. Our HUI chart is also a compelling Elliott Wave chart that indicates a triangle is completing and the price action should resolve to the upside as well.
These charts are only a guide so that you can follow the action and watch for the potential breakout. The action could play out exactly as illustrated or it may need adjustments as we follow it through. The action could also negate the triangle count all together, but it allows us to focus on a likely outcome as illustrated above. Triangles can break to the upside or to the downside, so these charts should also assist to keep us on the right side of the play.
The identification of the triangles and subsequent analysis has kept us on the right side of the market. If you are interested in viewing these updated charts and other detailed charts with targets on a daily basis, please see the registration details below.
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.
If you want to be removed from this mailing list, please reply to this e-mail and include "unsubscribe" in the subject line plus your name and company.
|
| 
