March 16, 2009 – The following three entries were submitted to the Federal Observer, days apart. Each by themselves, was of passing interest – BUT – collectively, they began to make me wonder, “What the hell are they up to now???” Hmmmmmm – the Government is broke! The daily headlines read just like 1929 though 1933, and we’re printing our way into obscurity…. What’s next? [Ed.]

Consistent with a deep distrust of what my government says and does, what do you make of this? Of course, it’s lacking transparency for the rest of us, but what is the underlying intention of Frank’s enforcers?

1. Preserve any gold remaining in our Treasury, if any?
2. Preparatory to curtailing US Mint production of bullion eagles?
3. Eliminate Americans’ desire for remembering our earlier patriots?
4. Physical shortage of gold blanks and bullion?
5. Curtailing demand of bullion which promotes higher world prices?
6. Only a committee can decide who’s an American hero?

Wanna bet who’ll be the first selection under his new law? TED KENNEDY.

NOTE:  Don’t worry too much about Teddy’s coin. It would be the first coin that Washington couldn’t throw across the Potomac – it would drown.

But, guess what? This leaves the commemorative gold coin issue wide open to the STATE LEGISLATURES! Can you begin to imagine the premiums those state-minted coins would demand as they became readily collectible from all 50 states? A whole new numismatic venue would immediately be evident! Even my ancestor Jos. Frye  (claimed by Maine which, however, did not become a state until 1820 in the Missouri Compromise) could even be honored! Gen’l Frye was appointed by Washington to replace Paul Revere. (Revere had abandoned his defensive post on the Maine coast, and was subsequently court-martialed.) 

Congress Adopts New Authorization Rules

It now will be harder to authorize new commemorative coins and new congressional gold medals after action taken in the House of Representatives.

House Financial Services Committee chair Rep. Barney Frank, D-Mass., and his 70-person committee have adopted new rules on how the committee will handle commemorative coinage matters and proposals for congressional gold medals.

The move was quietly announced as Congress debated the trillion dollar stimulus package and escaped critical notice.

Every Congress sets internal rules to describe how they will govern; the alternative is to be deluged with proposals that members do not want to take the time to consider unless there is overwhelming support from members and their constituents, which is what the new rules attempt to do.

The way that they handle it is to declare “out of order” anything that deviates from the established norm, which was approved by the entire committee on Feb. 10 as part of its reorganization.

“It shall not be in order for the Subcommittee on Domestic Monetary Policy and Technology to hold a hearing on any commemorative medal or commemorative coin legislation unless the legislation is co-sponsored by at least two-thirds of the members of the House,” is the first rule.

That means that 290 members of the House must either co-sponsor legislation or sign a discharge petition. The task is a daunting one, and that is intentional. It’s designed to prevent an Elvis coin or one honoring “Bozo the Clown” and keeps with the solemn purpose that coinage has to depict something worthy of a great nation.

Rules also say now that, “It shall not be in order for the subcommittee to approve a bill or measure authorizing commemorative coins for consideration by the full committee which does not conform with the mintage restrictions established by section 5112 of title 31, United States Code.”

Dumb as this sounds, this keeps the denominations the same – half dollar, silver dollar) and $5 gold piece – and does not allow for creative marketing, such as issuing a new $3 gold piece.

“In considering legislation authorizing congressional gold medals, the subcommittee shall apply the following standards – (i) the recipient shall be a natural person; (ii) the recipient shall have performed an achievement that has an impact on American history and culture that is likely to be recognized as a major achievement in the recipient’s field long after the achievement.”

The first section is designed to make sure Coca-Cola doesn’t get a national medal; the second to make sure it is not a fad of the moment.

The committee’s rules also provide that, “the recipient shall not have received a medal previously for the same or substantially the same achievement,” a provision designed to avoid embarrassment of duplicating the achievement. For example, Admiral Hyman G. Rickover was given the congressional gold medal in 1958 and again in 1982.

Another requirement is that, “the recipient shall be living or, if deceased, shall have been deceased for not less than 5 years and not more than 25 years,” and ” the achievements were performed in the recipient’s field of endeavor, and represent either a lifetime of continuous superior achievements, or a single achievement so significant that the recipient is recognized and acclaimed by others in the same field, as evidenced by the recipient having received the highest honors in the field.”

This is also designed to solve other issues, such as George Gershwin honored in 1985 (he died in 1937, 48 years earlier), Peanuts cartoonist Charles Shultz, who died Feb. 12, 2000, and was given posthumous recognition with the congressional gold medal by law passed June 20, 2000, substantially less than five years.

Some other names that would have been recently affected: baseball great Jackie Robinson, awarded the congressional gold medal in 2003, or 31 years after he died (1972), Dr. Martin Luther King Jr., assassinated 1968 and given a gold medal by Act of Congress some 36 years later in 2004.

Rep. Michael Castle, R-Del., proposed legislation that would have limited congressional gold medals to no more than two per year. On Jan. 26, 2005, the House approved it by a vote of 231 to 173. That measure then died in the Senate.

Written by David L. Ganz for  Numismatic News.

Rahall Proposes Bill to End All Mining in the U.S.

Nick Rahall, chairman of the House Resources Committee, reintroduced mining reform legislation in the House of Representatives on January 27, 2009. The Congressman has obviously been away from real work for far too long. H.R. 699, the Hardrock Mining and Reclamation Act of 2009, should be labeled H.R. 666 because it appears to have been written by the Devil himself. If it passes as written, it will completely destroy an entire industry.

Here are a few “highlights” from H.R. 699:
• Casual use would be redefined to allow only those activities that do not cause “any disturbance of public lands and resources.” The collection of samples, use of gold pans and non-motorized sluices would be the only activities allowed without a Notice or Plan. Taking a vehicle off-road would also require a Notice or Plan. Any extraction of minerals for sale or use would require a Notice or Plan.

• H.R. 699 would be retroactive. Existing mining that is not already operating under a Notice of Plan would require proof of a valuable discovery to retain a mining claim, and those operating under a Notice or Plan would have ten years to bring their operation under compliance with the new regulations.

• The patenting of mining claims, which has been suspended by yearly legislation since 1994, would be permanently discontinued.

• The federal government would be entitled to an 8 percent gross royalty for all locatable minerals for any new mining operation. Even if the miner is unable to make a reasonable profit at current commodity prices, he would have to give 8 percent to the federal government. Existing operations at the time the bill is passed would be subject to a 4 percent gross royalty, and any federal lands added to the operation after enactment of the bill would be subject to the 8 percent royalty.

• The reporting requirements are absurd. Anyone transporting a locatable mineral, concentrate or product derived from a locatable mineral shall carry documentation declaring the amount, origin and intended destination. Miners shall create and maintain reports relating to the quantity, quality, composition, volume, weight and assay value of all minerals extracted from a mining claim. Failure to produce these reports when requested by any officer or employee designated by the federal government may result in involuntary forfeiture of the mining claim.

• The federal government would be authorized to conduct audits of all claim holders, operators, transporters, purchasers, processors, or other persons directly or indirectly involved in the production or sales of locatable minerals.

• Mining claim maintenance fees would be raised to $150 per claim, and would be adjusted at least every five years based on the Consumer Price Index. The location fee would be increased to $50 per claim.

• Tens of millions of acres would be added to existing areas that are already off-limits to mining, including Wilderness Study Areas; areas of critical environmental concern; areas designated for inclusion in the National Wild and Scenic Rivers System; areas designated for potential addition, or eligible for inclusion; and any area identified in the set of inventoried roadless maps contained in the Forest Service Roadless Area Conservation Final Environmental Impact Statement, Volume 2, dated November 2000.

• Any State, political subdivision of a State, or Indian tribe could petition the Secretary of Interior to withdraw areas based on drinking water supplies, wildlife habitat, cultural or historic resources, scenic vistas or other similar values. Indian tribes could also petition for the withdrawal of areas for religious or cultural value.

• The bill would give the Secretary the authority to deny any operation that may cause undue degradation.

• To get an approved Plan, the operator would have to be able to show that no treatment of discharged water will be necessary 10 years after mine closure, and any Plan could be changed or halted if additional information about scientific, cultural or biological resources becomes available.

• The miner would have to submit an application to the federal government to request any cessation of operations greater than 180 days. A miner would have to obtain consent of the federal government to transfer ownership of any operation, and the transfer would require a fee to be paid to cover the government’s administrative costs.

• Financial assurance (bonding) would be required for any operation—presumably this would also apply to suction gold dredging—and the amount would be evaluated and adjusted every 3 years. Where water treatment is necessary, financial assurance funds would not be released until there is 5 full years where treatment is not necessary.

• States would be allowed to implement regulations that exceed the regulations in this bill.

• The federal government would be allowed to collect administrative fees to cover expenses incurred while regulating mining operations.

• Mining operations would be subjected to a minimum of one complete inspection per year.

• The bill would provide environmental lawyers an unending source of income. Any citizen would be allowed to file a civil lawsuit against the miner or the federal government to force compliance with the mining laws after giving sixty days written notice. The court would be allowed to award the costs of litigation, including attorney and witness fees, as the court deems appropriate.

• Any miner who fails to comply with any portion of a permit would be subjected to a fine of $25,000 per day.

• Any citizen who believes they are being adversely affected by a mining operation could request an inspection. If the Secretary agrees that an inspection is warranted, the complainant would be allowed to join in the inspection. Complainants could remain anonymous if desired.

• Any person who engages in mineral activities without the required permit, if convicted, would be punished by a fine of not less than $5,000 per day or by imprisonment for up to 3 years or both.

• Designated employees of the Department of Interior and Department of Agriculture would be given full law enforcement powers over permitted miners, including the power to subpoena miners to force attendance, testimony, and disclosure of all paperwork, and warrantless searches of vehicles and buildings expected to contain locatable minerals or products derived from them would be allowed.

• The Secretary would be forced to prevent mineral activities that could have an adverse impact on the resources and values of National Conservation System Units.

H.R. 699 would completely wipe out all small-scale mining in the United States. Small-scale miners do not have the time and resources to handle the fees, lawsuits and reporting requirements.

Large-scale mining would be also phased out as mining companies would be unable to deal with the unattainable requirements of these regulations, citizen lawsuits, thin profit margins, reporting requirements, and the uncertainty that comes with the federal government’s new authority to halt a mining operation when “undue degradation” is occurring or a scientific, biological or cultural resource is discovered. Many areas that may have potential would be inaccessible. No one in their right mind would provide funding for exploration or operations under the proposed conditions.

The most likely outcome would be that the environment would suffer as mining companies move all operations to countries with little or no regulations.

Like the current situation with oil, Americans would be forced to obtain natural resources overseas, sending money to countries that don’t like Americans and would love to control our prices.

The legislation is co-sponsored by Reps. George Miller (D-CA), Henry Waxman (D-CA), Ed Markey (D-MA), Howard Berman (D-CA), Raúl Grijalva (D-AZ), Rush Holt (D-NJ), Jim Costa (D-CA), Donna Christensen (D-VI), Pete Stark (D-CA), Dale Kildee (D-MI), Maurice Hinchey (D-NY), Earl Blumenauer (D-OR), Patrick Kennedy (D-RI), Ron Kind (D-WI), Lois Capps (D-CA), Adam Schiff (D-CA), Mike Honda (D-CA), John Salazar (D-CO), Anna Eshoo (D-CA), Niki Tsongas (D-MA), and Gerry Connolly (D-VA).

The legislators who have sponsored this bill should be labeled as un-American, voted out of office, and sent packing for attempting to decimate one of the few industries that has managed to stay afloat and provide an honest paycheck during these tough economic times.

Please take a minute to contact your Representative and Senator to let them know your stance on H.R. 699. Better yet, why not start a recall effort if one of the bill’s sponsors is in your area, or stop by their local office for a bigger impact?

Written by Scott Harn for Prospecting and Mining Journal

And finally…..

The following from my precious metals importer:

I thought this was an interesting read and the main reason we can never return to the Gold Standard. Also, using a 15:1 production ratio, Silver would have to be at $463 per-Ounce. – Steve

US $6,948 gold would support greenback

Just how high could the price of gold go? Really high, according to analyst Daniel Brebner and others at UBS Securities.

They plotted out a number of scenarios using various levels of strength for inflation and the U. S. dollar, and predicted that gold will not fall below US $500 an ounce between now and 2015, and could rise to US $2,500.

To get there would require inflation at 1970s levels and a weak U.S. dollar, UBS said. The bottom end of the range would require static inflation and a strong U. S. dollar.

There is one other possibility UBS raises: what if a new gold standard was adopted to support currencies, particularly the U. S. dollar? Using the current value of the U. S. monetary base and the country’s reported gold holdings, UBS calculated gold would need to be at US $6,948 to support the value of the U. S. dollar.

If China and Japan are included, UBS predicted that the price would be close to US$10,000 an ounce.
 
The UBS team noted that a gold standard would theoretically bring some confidence back to currencies and stabilize them. But it would create all kinds of problems by removing flexible exchange rates, and they noted that not much headway has been made in this area.

Peter Koven, Financial Post, Published: Wednesday, March 11, 2009

FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml