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Fed’s Balance Sheet Exceeds $7 Trillion for First Time in History

The Fed’s balance sheet jumped by another $103 billion over the past seven days (ending Wednesday the 20th), pushing it above $7 trillion for the first time in history.

The Fed has now added $3.28 trillion to its balance sheet since September 2019, when the Repo Crisis forced it to restart large scale asset purchases. That compares to a total of $3.5 trillion from QE-1, QE-2, and QE-3 combined, programs that took seven years to deploy and which were considered extremely accommodative just six months ago.

Yet again, the primary driver of the growth in the Fed’s balance sheet over the past seven days was $79 billion of Mortgage-backed Securities (MBS), of which the Fed now holds $1.86 trillion, the most ever. The Fed is buying MBS significantly faster than during the 2008 Housing Crisis.

The Fed also bought another $32 billion of treasury securities and performed another $5 billion in central bank currency swaps. It also added $1.4 billion to its secondary market corporate credit facility, the first significant funding of that facility. It shrunk the loans it has extended to the rest of its special purpose vehicles by $6.3 billion.

QE-Infinity marches on…


NEWS: Prime Mining Corp. Announces C$10,000,000 Marketed Offering and Appointment of New Board Member

Prime Mining Corp. (“Prime” or “PRYM” or the “Company”) (TSX VENTURE: PRYM) (OTCQB: PRMNF) (Frankfurt:A2PRDW) is pleased to announce that it has entered into an agreement with Clarus Securities Inc. and Desjardins Securities Inc. (the “Co-Lead Agents”), whereby the Co-Lead Agents will raise up to C$10,000,000 (the “Offering”) through an Offering of up to 20,000,000 units of the Company (the “Unit(s)”) to be priced at C$0.50 per Unit. Each Unit will consist of one common share in the Company (each a “Common Share”) and one common share purchase warrant (each a “Warrant”).  Each Warrant shall be exercisable for one Common Share at an exercise price of $1.10 for a period of 60 months following the Closing Date (as defined below).

The proceeds raised from the Offering will be used by the Company for exploration and development of the Company’s Los Reyes mineral property (the “Property”) and for general corporate purposes. The Company expects to execute an amendment to an existing agreement with the Property owner that will accelerate a final US$1.5 million option payment to no later than September 30, 2020 and provide Prime rights to acquire the owner’s overriding 2% royalty and underground mining back-in right.

The Offering is scheduled to close on or about June 10, 2020 (the “Closing Date”) and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals of the TSX Venture Exchange. The securities to be issued under this Offering will be offered by way of private placement exemptions in all the provinces of Canada. The Units to be issued under this Offering will also be offered offshore, including in the United Kingdom pursuant to applicable exemptions and in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.  Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the issuer and its management, as well as financial statements.

Prime also announces that Mr. Murray John will be appointed to the Company’s Board of Directors (the “Board”).  Mr. John is currently Chairman of Discovery Metals Corp. and is a member of the boards of directors of Osisko Gold Royalties, Ltd and O3 Mining Inc. Previously, Mr. John was President and Chief Executive Officer of Dundee Resources Limited, a private resource-focused investment company, and Managing Director and a Portfolio Manager with Goodman Investment Counsel.  In addition to serving as President and CEO of Corona Gold Corporation and Ryan Gold Corp., he is a former director of several other mineral resource focused public companies. He has been involved with the resource investment industry since 1992 and has worked as an investment banker, buy-side mining analyst, sell-side mining analyst and portfolio manager. Mr. John graduated from the Camborne School of Mines in 1980 with a B. Sc (Hons) in mining engineering and has extensive industry experience working as a mining engineer. He received a Master of Business Administration from the University of Toronto in 1993.

Daniel Kunz, Executive Chairman of the Board of Prime commented: “We are delighted to welcome Murray to our Board. He is a seasoned mining-industry executive whose extensive business experience will be very valuable to our company as we focus our efforts on the Los Reyes gold and silver project.  The Board joins me in extending our thanks to Mr. Bruce Durham for his time and contributions to the company”.   Mr. Durham is resigning from Prime’s Board having been nominated by Minera Alamos, Inc. who is now below the minimum 5% holding to maintain representation.

About Prime Mining Corp.
Prime (TSX.V: PRYM, OTCQB: PRMNF, FRA: A2PRDW) is an ideal mix of successful capital markets and mining executives and experienced local exploration personnel who are expanding the exploration initiative at the historically productive Los Reyes project in Sinaloa, Mexico. Los Reyes holds substantial resource upside based on open extensions of known resources, ten kilometres of undrilled strike length and at least eight additional exploration targets. Prime Mining has a well-planned capital structure with significant team and insider ownership.

Full release

China unveils $500 billion stimulus for the economy as it scraps growth target due to the pandemic

China promised Friday to throw 3.6 trillion yuan ($500 billion) at its economy this year in extra stimulus measures as part of a bid to create 9 millions jobs and blunt the fallout from the coronavirus pandemic.

Chinese Premier Li Keqiang said China would not be able to set a target for growth in the world’s second biggest economy for 2020 because of the “great uncertainty” caused by Covid-19 and “the world economic and trade environment.”

But he pledged a much more aggressive fiscal response to the crisis, funded by a big increase in government borrowing.

This is the first time in decades that China has not set a growth target for its economy. Last year, Beijing targeted growth in the range of 6% to 6.5%. GDP grew 6.1%, its slowest pace in nearly 30 years.

The coronavirus pandemic and a weeks-long shut down throughout much of China dealt a historic blow to the country’s economy. GDP shrank 6.8% in the first quarter, the first contraction that Beijing has reported since 1976.

Tax cuts, infrastructure projects

In response to the economic turmoil, Li set out a series of measures at this year’s annual meeting of the National People’s Congress, the country’s rubber-stamp parliament.

The financial response will be significant for China. The government anticipates spending an extra 1 trillion yuan ($140 billion) this year so it can fund stimulus efforts, including tax cuts, rent reductions and other moves that could help create jobs and helping the poor.

That is likely to increase China’s budget deficit to 3.6% of GDP this year. It’s the first time the budget deficit target has been set above 3% since the country’s current fiscal system was established in 1994. Last year’s deficit was 2.8%.

The government will also issue 1 trillion yuan ($140 billion) worth of special treasury bonds, which Li said could be used to fund medical equipment and technology used for fighting the virus. And local governments will be allowed to issue up to 3.75 trillion yuan ($527 billion) in special bonds, which will help them to build 5G networks, railways, airports and other infrastructure projects. That represents an increase of about 1.6 trillion yuan ($225 billion) compared to last year.

All told, the scale of additional fiscal policy this year to support China’s economy amounts to just above 4% of GDP, according to economists at Capital Economics — making it similar in scale to the country’s response to the global financial crisis of 2008 and 2009. That percentage implies a value of roughly 4 trillion yuan ($560 billion) based on last year’s GDP.

“Despite embracing relatively forceful stimulus, the leadership appear to be under no illusions that getting the economy back on track will be a challenging and drawn out process,” the Capital Economics economists wrote in a Friday research note.

As part of its goals for 2020, Beijing wants to create nine million new urban jobs to help bolster employment in the country, according to Li.

Employment has long been a top priority for the government, but this year it is even more of one: Tens of millions of people were forced out of work by the pandemic, and analysts suspect the unemployment problem is much larger than Beijing’s official data suggests.

“The employment targets suggest that they anticipate an extended period of labor market weakness,” wrote Julian Evans-Pritchard, senior China economist for Capital Economics.

US-China tensions

Friday’s political gathering also came as tensions between the United States and China flare up again, raising the possibility that the two could resurrect their trade war.

Li said that China still wants “phase one” of the trade deal, which the two countries reached in January, to continue. That agreement reduced some of the tariffs each side had placed on the other, while allowing Beijing to avoid additional taxes on almost $160 billion worth of goods. China also committed to buying an additional $200 billion of US goods and services this year and next.

Li added that China must stay committed “opening our door wider to the world, keep our industrial and supply chains stable, and make opening up a catalyst for reform and development.”

The remarks from Li are “an attempt to calm trade fear at home,” said Stephen Innes, chief global markets strategist for AxiCorp.

Analysts from Beijing-based China Renaissance said the phase one deal will be “a key barometer” for US-China relations, especially as tensions escalate.


Bipartisan group of state AGs to Congress: Put marijuana banking protections into coronavirus bill

Attorneys general for 34 states and territories asked Congress on Tuesday to include protections in its coronavirus relief plans for banks that service legal marijuana businesses.

The bipartisan group of top law enforcement officials made the request to leaders of the Senate and House of Representatives amid a renewed push on Capitol Hill to provide safeguards for banks that work with legitimate marijuana businesses that operate under and against state and federal law, respectively, such as professional pot growers and medical and recreational dispensaries.

Thirty-three states have legalized marijuana to different degrees, including nine with thriving commercial industries in place. Cannabis remains illegal under federal law, however, so banks are often reluctant to service dispensaries and other businesses over fear of facing reprisal from government regulators.

In their letter to lawmakers, the attorneys general repeated an earlier call for Congress to provide a “safe harbor” for banks that work with marijuana businesses but suggested it do as much as part of any future relief package offered in response to the ongoing novel coronavirus pandemic, offering three reason why the believes legislative relief is needed now more than ever.

“First, threats to public safety caused by a cash-intensive business model, often the target of criminal activity, have intensified in the months since the pandemic began. Next, the presence of large cash transactions places law enforcement, tax regulators, consumers and patients at heightened risk of exposure to the virus. Finally, the ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019, will provide critical relief for state and local governments predicting budget shortfalls due to the pandemic,” argued the group of attorneys general, which is largely comprised of Democrats but includes seven Republicans.

“The current predicament of a rapidly expanding national marketplace without access to the national banking systems has resulted in an untenable situation,” they wrote lawmakers including House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, among others. “We stress that current legislative models are available to fix this situation.”

Indeed, a bill pending on Capitol Hill — the Secure and Fair Enforcement (SAFE) Banking Act — would achieve the group’s aim by stating in part that federal regulators may not “prohibit, penalize or otherwise discourage” a financial institution from working with legitimate cannabis businesses.

Passed last year in the House with bipartisan support, the SAFE Banking Act had been stalled ever since due to being ignored in the Senate where Mr. McConnell, Kentucky Republican, has control. Its consideration could become moot if the Senate passes the latest coronavirus relief package cleared by the House, however, which includes a provision containing language identical to the stalled banking bill.

“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses,” begins the part of the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, containing the revived banking bill.

Mr. McConnell has since taken issue with Democrats for including the marijuana banking bill in the HEROES Act, arguing last week that the sheer number of times the word “cannabis” appears in the House bill exemplifies a “totally unserious effort” on their part to pass a relief bill and suggested its language might not withstand the Senate’s scrutiny.

The latest letter to congressional leadership was led by Colorado Attorney General Phil Weiser, a Democrat, and North Dakota Attorney General Wayne Stenehjem, a Republican. Their co-signers include counterparts in Alaska, Arkansas, California, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.


VSBLTY Groupe Technologies CEO Discusses RadarApp Collaboration Deployment in Colombia Following Mexico City Successes

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VSBLTY Groupe Technologies Corp.’s (CSE:VSBY) (5VS.F) (OTC:VSBGF) success with security initiatives in collaboration with Smart City Solutions provider RadarApp in Mexico City has given rise to new adoption in Colombia, according to a recent press release. In an interview with Investorideas.com, VSBLTY Co-founder and CEO Jay Hutton explained that the work in Mexico’s capital was watched closely from the start.

“From the very beginning of the Mexico City project there were a lot of eyeballs on it, a lot of people watching it to see how well it would perform because it was breaking a lot of the traditional rules of how security systems are deployed in large cities,” he said. “As these systems [were getting] deployed, we had delegations from other countries and cities visiting Mexico City because the results were sort of unbelievable.”

An example of the kind of results Hutton is referring to is Cuajimalpa County’s becoming the safest in Mexico City. Cuajimalpa Mayor Adrian Ruvalcaba said:

“We have gone from the 11th Safest to Number One during 2019. The single major contributor to this change is the camera security network which is not yet even fully installed.”

Similarly, neighboring Cuauhtemoc County reported a 40 percent reduction of crime in the first year of the installation of the security network.

“As it turns out, the first one outside of Mexico City we’ve landed is Colombia, and [its] three major cities – Medellin, Bogota, and Barranquilla – have now seen initial deployments and we look to go even bigger very soon with them,” he said.

Hutton said the company is currently speaking with other governments in the region who seek to follow the examples set in Mexico City.

“We’re already in advanced conversations with other Latin American countries that are seeing the same need and seeing our ability to uniquely and cost-effectively to provide a solution,” he said.

The onset of the global Coronavirus pandemic has created sudden demand in cities for things like temperature scanning of crowds, something which VSBLTY and RadarApp’s security solutions have proven adept in executing. The press release quotes RadarApp Co-founder and CEO, Rodrigo Calderon:

“This technology is extremely adaptive which enables us to integrate thermal cameras and analytics. In addition to the impact that this platform has had on crime reduction, the technology is also providing crowd density information, which is assisting officials who are working to monitor public safety during the current Covid-19 pandemic.”

“For VSBLTY that’s just another set of data inbound that we can use our artificial intelligence engine to drive alerting on,” Hutton said. “So, it’s just perfect for us, and it fits into our structure quite nicely.”

Podcast host- Sam Mowers, Investorideas.com