The Mission Report

The MissionIR Report - Mid-August 2011

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Gold-standard Debate Back

Exactly 40 years ago, the U.S. dollar formally became a fiat currency, as then-President Richard Nixon "closed the gold window" and ended the greenback's precious-metal guarantee. And though a market price for the dollar was soon accepted as the new normal, the debate over a return to the gold standard has now resurfaced in a way we haven't seen in forty years.

Many practical hurdles to a gold dollar exist — most significantly the tremendous difficulty in defending a metal-backed currency, even if the new gold standard opened with a major devaluation for the U.S. unit. But putting that aside, the debate itself is interesting and echoes the previous major gold controversy in the late 19th and early 20th centuries.

Feelings were intense on both sides, as witnessed by 1896 Democratic presidential candidate William Jennings Bryan's famous speech decrying what he saw as Republican attempts to "crucify mankind upon a cross of gold."

Today, the debate is equally heated. Those calling for a return to gold — the minority in this modern debate — deride those opposed to such a move as "sheeple" (sheep-like people) who blindly trust in their governments and refuse to see that the world's central banks have devalued the dollar and other major currencies into irrelevance.

Meanwhile, those who dismiss a gold standard as impractical see its supporters as "Ayn Rand wackos" (in reference to the author/philosopher popular with some gold supporters), praying for the economic apocalypse as they clutch their bullion with sweaty hands.

Of course, while the heavy passions in the current debate seem to match those from a century earlier, we can see at least one thing that has changed since Bryan's days: the role of the banker in the great gold debate.

In 1896, bankers were seen as widely favoring retaining the gold standard. Adding silver — as Bryan and the "free silver" Democrats called for — was seen as an inflationary move, which would punish lenders (the banks) and help borrowers (particularly farmers). Bryan's "cross of gold" speech made reference to the plight of the indebted farmer.

Today, however, the banker is the enemy more often cited by the pro-gold camp. Some of those seeking a gold standard say, for instance, that U.S. quantitative easing has adulterated the dollar to the benefit of financial firms, and that the banking industry is the guardian of the fiat currency system.

Japan's Economy Shrinks Less Than Expected

Japan's economy contracted less than what was estimated by economists as reconstruction work limits the slump from the record earthquake and tsunami on March 11. Gross domestic product shrank at an annualized 1.3 percent rate in the three months ended June 30, marking three consecutive quarters of declines, the Cabinet office said today in Tokyo. The median forecast of 25 economists surveyed by Bloomberg News was for a 2.5 percent drop.

Finance Minister Yoshihiko Noda said today that the world's third-biggest economy will probably resume its expansion this quarter after pledging yesterday to take "bold action" to curb yen gains if necessary. The nation's former top currency official Eisuke Sakakibara said today Japan's currency may rise to a postwar record, threatening the profits of exporters from Toyota Motor Corp. to Sony Corp. just as global growth slows.

"The headline number is better than expected, but it's not like this is a strong number," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. "The strengthening yen will start to weigh on exports and capital spending. We can expect positive growth in the third quarter, but the yen may damp that momentum."

Japan's benchmark Nikkei 225 Stock Average rose 1.4 percent to 9,086.41 at the 3 p.m. close in Tokyo. The yen traded at 76.89 per dollar and has gained 5 percent against the U.S. currency in the past three months. Authorities sold the yen for the first time since March this month as it approached a high of 76.25.

A 15-yen change in the dollar-yen rate over the past year has "blown off" 300,000 yen, or $3,900, in profit on a $20,000 car, and a stronger yen has cut Toyota's fiscal first-quarter operating profit by 50 billion yen, Takahiko Ijichi, the carmaker's senior managing officer, said on Aug. 2.

A stronger currency makes Japanese products less competitive abroad and erodes overseas profits repatriated into yen. The yen has been stronger than the 82.59 average rate on which companies have based their profit forecasts, according to a quarterly Bank of Japan survey of business activity.

"The exchange rate is at a level that has an extremely damaging effect on the Japanese economy," Osamu Masuko, president of Tokyo-based Mitsubishi Motors Corp., said Aug. 4 after authorities intervened in the foreign-exchange market for the first time since March. "The resulting exchange rate still isn't acceptable."

Slower overseas growth may also weigh on demand for Japanese products. Tokyo Electron Ltd., the world's second- largest maker of semiconductor equipment, cut its net income forecast for the year ending in March by 49 percent to 34 billion yen ($442 million), citing lower than expected sales.

Rates on 15-year Mortgage Hit Record Low

Mortgage rates hit new lows this week, as worries about European debt markets drove investors to U.S. Treasurys, Freddie Mac's chief economist said on Thursday.

Rates on the 30-year fixed-rate mortgage averaged 4.32% for the week ending Aug. 11, the lowest the rate has been in 2011, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 4.39% last week and 4.44% a year ago.

Meanwhile, 15-year fixed-rate mortgages, as well as 5- and 1-year adjustable-rate mortgages, hit record lows this week.

Fifteen-year fixed-rate mortgages averaged 3.5% this week, down from 3.54% last week and 3.92% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.13%, down from 3.18% last week and 3.56% a year ago. And 1-year Treasury-indexed ARMs averaged 2.89% this week, down from 3.02% last week and 3.53% a year ago.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, while the adjustable-rate mortgages required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.

"Renewed market concerns about the European debt markets led investors to shift funds into U.S. Treasuries, pushing long-term yields lower," said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release.

"Further, in its August 9th Federal Open Market Committee statement, the Federal Reserve noted that economic growth so far this year had been considerably slower than it expected and that overall labor market conditions had deteriorated in recent months, leading the Committee to conclude that an exceptionally low federal funds rate should be maintained at least through mid-2013.

These developments helped to ease mortgage rates lower this week.

Low mortgage rates are making homes more affordable. The National Association of Realtors' affordability index indicates that over the past three quarters, homes have been more affordable than any other time since the group began keeping the index in 1970, Nothaft said.

According to a separate survey released by on Thursday, 30-year fixed-rate mortgages averaged 4.46% and 15-year fixed-rate mortgages averaged 3.61%. Seven-year ARMs averaged 3.45% this week, while the 10-year ARM averaged 3.93%, according to Bankrate.

Scorpex, Inc. (SRPX)

Scorpex recently announced its selection of Acadia Group to prepare its financials for a formal audit. The Acadia Group works with companies and their auditors to comply with the Securities and Exchange Commission's reporting and filing requirements. After completing the audit, the Company plans to file reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

"Audited financials are the first step towards preparing Scorpex for the next level of public disclosure. As a fully-reporting and audited company, our shareholders and future shareholders will be better informed and will see the value of our business." stated Joseph Caywood, CEO of Scorpex, Inc.

About Scorpex, Inc.

Scorpex, Inc. is focused on becoming a leader of hazardous and toxic waste disposal in the Baja Mexico/California region where demand for waste management exceeds capacity. To date, the company has constructed a 10,000 square foot storage facility, water reservoir and septic system, sprinkler system, and security fence and is in the process of developing other necessary infrastructure on its 26-acre site.

Joseph Caywood is the founder of Scorpex International and has developed the project for several years. His efforts have included overseeing construction, land acquisition, site development, permit applications, governmental relations, and submitting focused studies and reports by experts in this industry. As a result of his efforts, Scorpex will have the only industrial waste processing facility of its kind in Baja Mexico.

The Mexican economy has experienced significant growth in the manufacturing sector over the past several years. This growth has been fuelled by the NAFTA treaty and investments from foreign national companies. The growth of both new and existing industries has dramatically increased the need for the disposal of industrial waste throughout Mexico, especially in the Baja California region.

The company's future expansion plans include constructing other strategically placed, specially designed, storage, recycling and disposal facilities in various locations throughout Mexico. All facilities will be designed specifically for the purpose of processing the nation's growing industrial waste, including materials that are classified as industrial, toxic, and hazardous.


In a recent press release, SEFE, Inc. announced that it has appointed Harold Sciotto to its Board of Directors. The company noted Mr. Sciotto's experience in the alternative energy industry as complementary to development initiatives and the implementation of its business strategy.

"SEFE is completely unique in its pursuit of generating clean, carbon-free energy," stated Mr. Sciotto. "I am very excited to be a part of this revolutionary initiative and believe the experience I've accumulated over the course of my career will help accelerate the company's momentum."

About SEFE, Inc.

SEFE, Inc. is focused on developing and deploying a promising solution to our world's energy problems. It is now more obvious than ever before that fossil fuels are increasingly more difficult to find and harvest. It is also well known by now that alternative energy, such as solar, wind and nuclear, has its own list of unsolvable issues. SEFE's unique technology, in comparison, harvests unadulterated, carbon-free, always-on and problem-free energy from a never ending source.

The company calls it True Energy because it's not an alternative to anything and it certainly isn't petroleum based. SEFE's solution works by capturing and converting naturally occurring static electricity in the atmosphere into a constant, abundant and decidedly green source of renewable energy. The patented technology has been designed to be robust, easy to implement and user-configurable from the start so that these systems can be deployed anywhere and generate current usable by any localized source.

Because the cost of deploying and maintaining SEFE systems is relatively low, the company believes it can sell a kWh of electricity at $0.03 per unit. In comparison, nuclear energy costs approximately $0.14 per kWh and wind energy costs approximately $0.07 per kWh. SEFE is currently prosecuting four pending United States Patent Applications to protect their core intellectual property. Once issued, these patents will provide barriers to entry and fortify their foundational business construct.

The company has grown from a national company to an international concern with planned partnerships in China, India, Australia and the EU. SEFE is also well supported by a highly capable management team that has accumulated more than 30 years of experience in corporate management and governance. The company also employs a host of associates who are experts in fabrication and product development, FAA regulations, engineering and utility consultation, among others.

Sky Power Solutions Corp. (SPOW)

Sky Power Solutions Corp. announced optional Lithium Ion battery packs for storing electric power and providing a backup supply of electricity during electrical blackouts. Sky Power Solutions is focused on providing decentralized out flow to the grid to help prevent future blackouts as the installed base increases and the demand for electricity continues to rise.

With an optional upgrade, users of the Solar Electric Generation System can capture and store electric power using Lithium Ion batteries for later use. During power outages, the system provides emergency electricity to its users. Multiple battery packs can be combined to increase capacity and add additional backup power. During periods of rolling blackouts, Sky Power Solutions' system can automatically switch to the installed battery bank for uninterrupted electric power.

About Sky Power Solutions Corp.

Sky Power Solutions Corp. is focused on developing and marketing lithium-powered vehicles, products, and commercial and residential properties, in addition to its focus on the solar industry. Everything from scooters, bicycles, mopeds, motorcycles, cars and homes are being converted successfully to zero-emission, lithium-powered vehicles and facilities.

The company leverages the advantages of a hexagonal structure for the accommodation of more energy. The elements and special transition metals have been carefully selected to ensure Sky Power's products are safe, environmentally friendly and less expensive. As an emerging leader in the sector, Sky Power is positioned to benefit from the rising demand for clean energy.

Leveraging its expertise in lithium energy, Sky Power is also pursuing burgeoning opportunities within the solar industry. Electric consumption in the United States is increasing at a rate that will outpace projected capacity and Sky Power Solutions has positioned itself for expansion into the residential electric power generation market.

As consumer acceptance of all electric cars adds to rising demand for electric energy, Sky Power aims to capitalize on the growing opportunities by enabling consumers to generate and return 30-40% of their electric usage back to the grid using "Net-Metering" and the Sky Power System. Providing a total energy solution, the company is poised for exceptional growth.


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