Jim’s Mailbox

Posted at 10:04 PM (CST) by & filed under Jim's Mailbox.

Hello Gentlemen,

I don’t imagine that the Venezuelan Finance Ministry did this now because they have no intention of ever purchasing tonnes of gold from local producers.

Where there’s smoke there’s fire!

I’d further speculate that the central bank would buy from domestic producers before buying from foreigners producing in Venezuela.

Best wishes,
Scott

Scott,

This is clear evidence of the move of even second stage central banks away from the US dollar and towards gold.

Regards,
Jim

Venezuela Orders Gold Producers to Sell More Locally (Update1)
By Daniel Cancel and Matthew Walter

May 4 (Bloomberg) — Venezuela more than doubled the amount of gold that local producers must offer to the central bank in a bid to increase its reserves of the metal and reduce reliance on supporting them with U.S. dollars.

The Finance Ministry said today that 70 percent of gold produced in Venezuela must be sold domestically, and 60 percent must be offered first to the central bank, in a resolution published in the Official Gazette. The remaining 30 percent can be exported. Previously, 20 percent had to be offered to the Central Bank.

The resolution affects Vancouver-based Rusoro Mining Ltd., said Andre Agapov, the company’s chief executive officer. Rusoro will still have the right to sell its gold elsewhere should the central bank refuse to purchase it, he said today in a telephone interview.

More…

Dear Jim,

Seagate Technology, the world’s largest maker of hard disk drives, is headquartered in Scotts Valley, California. Yet the documents it files with the Securities and Exchange Commission lists its address on South Church Street in George Town, the capital of the Cayman Islands.

Seagate is just one of the companies that may be affected by President Barack Obama’s proposal yesterday to raise about $190 billion over the next decade by outlawing techniques used by U.S. companies in offshore locations to avoid paying taxes. While the U.S. corporate tax rate is 35 percent, Seagate paid an effective tax rate of 5 percent in the year ended June 2008, according to data compiled by Bloomberg.

The Caymans have no corporate income tax for companies incorporated there. The Caribbean island has helped scores of U.S. companies, including Coca-Cola Co. and Oracle Corp., to legally avoid billions in tax payments to the U.S. government, says U.S . Senator Byron Dorgan.

CIGA Rusty Bayonet

Coca-Cola, Oracle, Intel Use Caymans to Avoid Taxes (Update1)
By David Evans

May 5 (Bloomberg) — Seagate Technology, the world’s largest maker of hard disk drives, is headquartered in Scotts Valley, California. Yet the documents it files with the Securities and Exchange Commission list its address on South Church Street in George Town, the capital of the Cayman Islands.

Seagate is just one of the companies that may be affected by President Barack Obama’s proposal yesterday to raise about $190 billion over the next decade by outlawing techniques used by U.S. companies in offshore locations to avoid paying taxes. While the U.S. corporate tax rate is 35 percent, Seagate paid an effective tax rate of 5 percent in the year ended June 2008, according to data compiled by Bloomberg.

The Caymans have no corporate income tax for companies incorporated there. The Caribbean island has helped scores of U.S. companies, including Coca-Cola Co. and Oracle Corp., to legally avoid billions in tax payments to the U.S. government, says U.S. Senator Byron Dorgan.

More…