Brazil starts taxing U.S. dollar shorts


Market rigging and currency controls are already under way.

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Brazil Real Weakens for 2nd Day on Government Derivatives Tax

By Paulo Winterstein
Dow Jones Newswires
via The Wall Street Journal
Thursday, July 28, 2011

SAO PAULO, Brazil -- The Brazilian real opened somewhat weaker on Thursday, still recoiling from new taxes on currency traders as the government sought to slow the Latin American currency's climb after reaching 12-year highs against the dollar.

The real opened at 1.5632, slightly weaker than its previous close at 1.5624, according to Tullet Prebon via Factset.

The government on Wednesday imposed a 1% tax on short dollar positions and said that new regulations could lead that tax to as high as 25%. While few expect the government to follow through on the threat of raising the tax to 25%, the measure increases the cost of speculative positions that favor the appreciation of the real.

... Dispatch continues below ...


Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site

The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing.

The conference call is 18 minutes long and you download an mp3 of it here:

Or play back the call here:

Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here:

"Although this is a new weapon in the government's toolkit to combat BRL strength, we don't believe it's a silver bullet that will ultimately be able reverse the currency's ongoing strengthening trend," Banco Santander's Alejandro Estevez-Breton wrote in a note.

Continued inflows, in the form of foreign direct investment attracted by the economy's growth as well as speculative inflows thanks to one of the world's highest interest rates, will continue to pressure the real, according to Santander. The central bank raised the benchmark Selic interest rate to 12.5% last week.

The sky-high interest rates, however, may not go much higher so soon, the central bank signaled Thursday. After removing language last week of a "sufficiently prolonged" rate adjustment cycle, the bank also signaled that it is more confident that global growth will slow and commodity prices moderate.

Brazil's central bank said in minutes of its latest meeting that commodity prices have "shown a certain accommodation," a change from previous talk of "great uncertainty" in the international commodity market. The spike in commodity prices at the beginning of the year had pressured Brazilian inflation, but now pressure appears to be easing, the bank said in minutes of its July 20 meeting.

The bank also said that growth of the world's largest economies has shown additional signs of moderation.

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Prophecy Platinum Reports 10.97 Million Ounces Inferred
and 1.04 Million Ounces Indicated PGM+Gold in Yukon

An independent resource report on the Wellgreen project in the Yukon Territory in Canada has just confirmed that it as one of the largest platinum group metals projects in Canada and one of the few outside South Africa, Prophecy Platinum Corp. Chairman John Lee says.

The report, compliant with Canadian National Instrument 43-101, was written by geologist Todd McCracken of Wardrop Engineering Inc., a Tetra Tech company. It incorporated drill data from 701 diamond drill holes (182 surface and 519 underground) totaling more than 53,222 metres. Using a 0.4 percent nickel equivalent cutoff grade, the Wellgreen deposit now contains a total inferred resource of 289.2 million tonnes at an average grade of 0.53 g/t platinum, 0.42 g/t palladium, 0.23 g/t gold (1.18 g/t PGM and gold), 0.38 percent nickel, and 0.35 percent copper. Separately, the deposit also contains an indicated resource of 14.3 million tonnes at an average grade of 0.99 g/t platinum, 0.74 g/t palladium, 0.52 g/t gold (2.25 g/t PGM and gold), 0.69 percent nickel, and 0.69 percent copper.

Prophecy Platinum Corp. trades on the Toronto Venture Exchange under the symbol NKL, on the pink sheets in the United States as PNIKD, and in Frankfurt as P94P.

For the complete press release on the Wellgreen report, please visit: