As the editor of the Silver Bear Cafe, I spend most of my time researching current events. I explore the markets, the economic war that is being waged on the middle class, precious metals, the Federal Reserve, energy, and how to go about surviving financially. In this weekly column I will attempt to condense the week's events and examine how the news might affect your pocketbook. JSB

Financial Markets

The motives, which prompt me to indulge myself by penning this commentary, were originally spawned out of some desperate attempt at waking up my friends and family so that I might have someone to talk to. When that need went unfulfilled, I deludedly pretended that my thoughts and observations might be valuable to someone else, somewhere else. It has since become very apparent to me, and most of my fellow bloggers, that "waking people up" is an almost insurmountable task and is, as such, most probably destined to failure.

The great consequence in all of this is, not only have I failed, but, while metaphorically sleeping, the whole of the country has failed. As Albert Einstein once stated:

The world is a dangerous place to live; not because of the people who are evil, but because of the people who don't do anything about it.

It occurred to me, many years ago, that there was an insidious evil afoot, and that evil was only able to thrive via the contrived right to monetize debt. This was never an actual right, but the sheeple seemed to prefer to be ignorant of the mandates of the U.S. Constitution, and the true science of economics and, instead, prefer to be fleeced through the application of the tenets of a faux science (Keynesianism). This application (theft) has been forwarded by faux academics, shysters, and con men, criminals all.

The monetization of debt is accomplished by the abusive misuse of the issuance of U.S. Treasury Bonds. A massive bond bubble has been created. I believe that that bubble is in the process of popping. I predicted its popping eleven years ago. I thought, however, that it would pop in 2006, not 2013. Had it popped in 2006 (it was so very much smaller then) we would, by now, be over it. It has since grown to such a size that its popping now is going to devastate markets all over the world, and we might not get over it for decades.

From Michael Snyder:

If yields on U.S. Treasury bonds keep rising, things are going to get very messy.  As I write this, the yield on 10 year U.S. Treasures has risen to 2.51 percent.  If that keeps going up, it is going to be like a mile wide lawnmower blade devastating everything in its path.  Ben Bernanke's super low interest rate policies have systematically pushed investors into stocks and real estate over the past several years because there were few other places where they could get decent returns.  As this trade unwinds (and it will likely not be in an orderly fashion), we are going to see unprecedented carnage.  Stocks, ETFs, home prices and municipal bonds will all be devastated.  And of course that will only be the beginning.  What we are ultimately looking at is a sell off very similar to 2008, only this time we will have to deal with rising interest rates at the same time.  The conditions for a "perfect storm" are rapidly developing, and if something is not done we could eventually have a credit crunch unlike anything that we have ever seen before in modern times.

At the moment, perhaps the most important number in the financial world is the yield on 10 year U.S. Treasuries.  A lot of investors are really concerned about how rapidly it has been rising.  For example, Patrick Adams, a portfolio manager at PVG Asset Management, was quoted in USA Today as saying the following on Friday...

"I am watching the 10-year U.S. bond," says Adams. "It has to stabilize. If the yield goes significantly higher the market is going to freak out."

On the Economic War Front

Has it ever occurred to you that there are many persons, in banking and government, that believe that they own you. They believe that you do not own yourself. They believe that you are chattel.

There have actually been many laws passed that are solely concerned with defining the ownership of the population. The New World Order is trying to alter the entire process of government in order to eliminate any chance that anyone could ever again assert themselves as free men. To do this they must completely dismantle the Constitution and render its essence impotent.

We must in the name of self defence and survival, end the abomination, which is the New World Order, now, along with the careers of all the key traitors at the top of this administration, and Wall Street as well as Central Bankers the World over. There is a bit of urgency here. We're already living on borrowed time.

They have, for many years, conspired to dumb us down which has resulted in rendering the average citizen clueless. Do you know anyone who is pro guns but anti drugs? How about anyone who is pro freedom of choice when it comes to drugs, but is against gun ownership? How did they become so confused? If you step back and analyze the reasoning of this dichotomy, you will soon realize that it is preposterous and reeks of some twisted proaganda campaign.

From Anthony Gregory:

Many opponents of gun control support the war on drugs, and many critics and reformers of America's drug laws tend to believe in gun control. Conservatives tend to fall into the first category and liberals into the second.

In reality, these two issues are more similar than many people might think.

In both cases — laws that restrict which guns people may buy, own, and carry and laws that restrict which drugs people may buy, possess, and ingest — what we're dealing with are possession crimes: victimless offenses against the state, whereby merely having something is branded a crime and punishable by fines and imprisonment.

Both types of laws are terribly immoral, as they are affronts to basic personal liberty. In a free society, all individuals own themselves and the products of their labor and exchange, and are free to do as they wish so long as they do not commit violence and fraud against other people. Arresting, prosecuting, and incarcerating people for the weapons they choose to own or the drugs they choose to consume are immoral violations of the rights of self-ownership and the corollary rights to control one's own body and property.

The right to self-ownership necessarily implies the right to self-defense and the right to peacefully acquire the means of self-defense. Hence, all gun control immorally violates the right to self-defense and self-ownership.

The right to self-ownership implies the right to self-medication and also the general right to decide what to put into one's own body. Either you own yourself or you do not.

Precious Metals

I was listening to an interview with Jim Rickards the other day. He brought up a very interesting point. To paraphrase his comment, which went something like this: The price of gold is not going down, the price of the dollar is going up. The point he was making concerned the unforeseen consequences (by Bernanke) of the currency wars that have been initiated under his watch. Yes, the Federal Reserve, currently and has always, favored inflation. Inflation is the process that enables them to steal from the [world's] population. But, as a result of the ploy being mimicked by idiot Central Bankers everywhere, and the mindlessness with which it is being applied, the Pound, the Euro and the Yen have been devalued at a much faster rate than the idiot Fed is devaluing the dollar. As a result, money is flowing into the dollar from far and near in order to evade the regional currency destruction. This has caused the dollar to strengthen, much to the Fed's chagrin.

When the dollar becomes weaker, we have inflation. But, when the dollar becomes stronger, we have deflation. Deflation is the greatest fear of bankers everywhere because the value of their collateral decreases. Most folks don't realize it, but the ten largest banks in the western world are insolvent. They are zombie banks. I say the western world because there are still bastions of banking sanity occurring in China and other places throughout the East. But in Europe and the U.S. all the major banks are, from a lack of regulation and as a result of massive derivative exposure, underwater. They have only been able to project the illusion of being solvent through the Fed's Zero Interest Rate Policy (ZIRP) and the application of bail-outs and, more recently, bail-ins. With the slightest provocation (read in: rising interest rates combined with an unintended deflationary environment) they will, in a spectacularly overt manner, go belly up. The result will be massive financial losses by stockholders and institutional investors, and the decimation of the savings of millions. This very rude wake up call will jolt public sentiment away from all fiat currencies and into precious metals, which will recover with a vengeance. We have finally reached the beginning of the end of the current economic paradigm.

From Michael Noonan:

Whatever expectation[s] you may have, expect the unexpected and unlike what you may expect. So far, that has been playing out quite nicely, and one of our expectations is that it will continue to unfold in the same manner, and to the ongoing surprise of most.

"Gold will be at/above $2,000 by the end of the year."

"Gold will reach $3,000 [$5,000, $10,000, etc] and silver $100, [$250, $500, etc]"

"The central bankers are [just about] out of gold." [The cupboards are likely bare.]

What is wrong with this picture?

Not one Precious Metals guru has gotten anything right in the last 18 months. All have been calling for considerably higher prices. Over the past several months none called for sub-$1,300 gold and sub-$20 silver. Many have extensive research staffs and reams of statistics to substantiate any and all claims asserted, [for higher price levels].

Lesson: Crystal balls do not work and never have, plus, when it comes to markets, Anything Can Happen!

Energy

There has been, since the beginning of this web site twelve years ago, a forum, dedicated to the a discussion of the various aspects of energy production, usage, and depletion, and how all those factors might affect your pocketbook. I concentrate on the depletion issue as much as any other because, to me, the condition of depletion seems irrefutable. All the recent talk about shale oil and gas and the Keystone Pipeline providing our energy dependence salvation, are simply distractions and will, in the near future, be shown to have little relevance from a macro perspective.

The era of cheap energy is, at least for the time being, over. I say "for the time being" because there are alternative technologies that could be applied to the production of energy. The irony is that, in spite of the industry's resounding death knell, the "powers that be" are still inclined to cling to that antiquated paradigm (usually, more often than not, as a result of bribes and kickbacks purveyed by the masters of Big Oil). Big Oil is, and has been, battling the application of these alternative technologies, through forced application suppression, since oil was discovered in Titusville, Pennsylvania in the 1850s.

The entirety of our country's infrastructure has been built through, and is, as a result, dependant on, cheap fossil fuels. The highways are made of asphalt. The steel in the bridges is forged with energy derived from fossil fuels. Our transportation is, almost, solely dependent on the internal combustion engine which is powered by fossil fuels. Without the availability of cheap fossil fuels, our MacMansions, in the suburbs, are going to become much farther away.

From James Howard Kunstler:

Wondering why the money world got its knickers in a twist last week?The answer is simple: the global economy is breaking apart and its constituent major players are doing face-plants on the downhill slope of a no-longer-cheap-oil way of life. Let's look at them case by case.

The USA slogs deeper into paralysis and decay in a collective mental fog of disbelief that its own exceptionalism can't overcome the laws of thermodynamics. This general malaise precipitates into a range of specific quandaries. The so-called economy depends on financialization, since it is no longer based on manufacturing things of value. The financialization depends on housing, that is, a particular kind of housing: suburban sprawl housing (and its commercial accessories, the strip malls, the box stores, the burger shacks, etc.). Gasoline is now too expensive to run the suburban living arrangement. It will remain marginally unaffordable. Even if the price of oil goes down, it will be because citizens of the USA will not have enough money to buy it. Lesson: the suburban project is over, along with the economy it drove it on.

But so is the mega-city project, the giant metroplex of skyscrapers. So, don't suppose that we can transform the production house-building industry into an apartment-building industry. The end of cheap oil also means we can't run cities at the 20th century scale. That includes the scale of the buildings as well as the aggregate scale of the whole urban organism. Nobody gets this. For one thing, there will be far fewer jobs in anything connected to financialization because that "industry" is imploding. The recent action around the Federal Reserve illustrates this. When chairman Bernanke's lips quivered last week, the financial markets had a grand mal seizure. He floated the notion that his organization might "taper" their purchases of US government issued debt and mortgage-backed securities — the latter being mostly bundled debt originated by government-sponsored entities and agencies. That's the "money" that supports the suburban sprawl industry.

The Fed

Each week, when I arrive at this, the appointed hour for yet another admonishment of the United States Federal Reserve, I ask myself, what can I say that I have not, ad nauseam, expressed before. Longtime readers have long since become aware of my convictions and opinions concerning the most satanic institution that has ever been. You already know that the salvation of the entire world lies in the abolishment if the Federal Reserve and Central Banks everywhere, and the incarceration of most, if not all, of its participants.

This week, Monty Pelerin take a large stab at demonizing the "Devil Spawn" (is that redundant?). Points are being raised about the blatant fraud that is being perpetrated by this malodorous abomination, as the facts are being recognized by more and more onlookers.

"It's just a little man behind a curtain" has been overheard and "They're just involved in a remake of the Flim Flam Man". These and similar comments seem to have become the current consensus.

From Monty Pelerin:

Ben Bernanke as Larsen E. Whipsnade

"The Fed's behavior of distorting prices is deliberate dishonesty calculated for government advantage. The policy is designed to deceive others to behave in a manner which is ultimately harmful to these individuals. It is outright fraud!"

[The passing of the Federal Reserve Act on 23 December 1913, when all of congressional opposition was on holiday, and custom was to not pass any legislation during such time, is a study in fraud in itself.

The Federal Reserve Banking system is modeled exactly after the Weimar central bank, the one that produced the German hyperinflation. Great model!]

In a previous article entitled "Government: 'A Seedy Circus … Perpetually In Debt'," government was likened to Larsen E. Whipsnade, the character played by the one-of-a-kind W. C. Fields in the 1939 movie "You Can't Cheat An Honest Man."

Characterizing Leviathan government as an individual, even one as large as Whipsnade, was a stretch. Fields' fans objected because he was reasonably harmless, likeable and entertaining, certainly not adjectives one would apply to our modern-day State.

If comparing government to Fields' character is improper, then why not compare individuals in that institution to Whipsnade. Surely there is no shortage of characters (clowns?) that could qualify as circus employees. The commonality between the Fields' character and most high government officials is that both are out to dupe the people.

Barack Obama doesn't make the cut, only because he is unlikeable and a genuine fool rather than pretending. Jay Carney is bumbling enough, but only haplessly acting on the orders of others. Eric Holder is too unlikeable and probably too devious to be a carnival barker. His aspirations could not be satisfied in small circus towns. Additionally he is too easy to see through. Timmy Geithner might have qualified, but he's gone now. That leaves Ben Bernanke.

Financial Survival

The time has finally arrived for you to begin to deploy your survival plans and take advantage of the preparations you have already made over the past few years, that will enable you to weather the financial shit storm which is now upon us.

Confusion is one of the most negative influences that can affect a person. Confusion breeds insecurity and desperation. Desperation breeds chaos. Chaos breeds societal breakdown. It is ironic that the powers that be have been preparing for just such a societal breakdown, through the construction of FEMA camps and the accumulation of billions of rounds of ammunition while, concurrently, enacting, over the last several years, conditions that have, ultimately, led us to the brink of disaster that we now face. Is there some method to their madness? What good could possibly come from the wanton destruction of the fabric of a society?

There is, and has been, a plan to attain a "One World Government" and this plan has been forwarded, by an elitist cartel, for many years. If you are not already familiar with the Fabian Society and its aspirations, please refer to Carroll Quigley's examination, The Anglo-American Establishment. The essence of the Fabian's agenda was incorporated in a stained glass window that hung in the Web House, a location that served as the group's original headquarters, in Surrey, England.

It is that famous line from Omar Khayyam: "Dear love, couldst thou and I with fate conspire to grasp this sorry scheme of things entire, would we not shatter it to bits and then remold it nearer to the hearts desire?" Please read that line again. It is the key to modern history, and it is the key to the war on sovereign nations: "Dear love, couldst thou and I with fate conspire to grasp this sorry scheme of things entire, would we not shatter it to bits and then remold it nearer to the hearts desire?"

A further dissection of the Collectivist's agenda provides us with a glimpse of their vision; "War is the best way to remold society. War! Shatter society to bits. Break it apart. Then we can remold it nearer to the heart's desire," And what is their heart's desire? Collectivism.

The ramifications of the their actions are so mind blowing in scope, that confronting them is beyond the capacity of most, including those who mindlessly abetted the implementation of their plan. If you are aware of the plan you are many steps up on those who are unaware.

For most, it is going to be an awkward and unpleasant awakening. Consider how you might feel if, suddenly, you found yourself facing an unexpected upheaval that left you and yours in a perilously unnerving financial situation: frozen assets, the interruption of the delivery of goods and services, and martial law, to name a few. These things, and many others are now on the horizon. We will now be presented with "the Great Unravelling".

From Graham Summers:

The markets are beginning what could in fact be an epic meltdown.

China is on the verge of a "Lehman" moment as its shadow banking system implodes.

China had pumped roughly $1.6 trillion in new credit (that's 21% of GDP) into its economy in the last two quarters… and China GDP growth is in fact slowing.

This is what a credit bubble bursting looks like: the pumping becomes more and more frantic with less and less returns.

Brazil, another "coming economic superpower" is experiencing rampant riots (over two million people in fact) as inflation soars.

And the US… well the breakout to new highs is looking more and more like a false breakout. These developments usually result in extreme violent swings in the other direction. In this case… DOWN.

This is just the start. I warned Private Wealth Advisory subscribers in our most recent issue that higher rates were coming noting a collapse in bonds in Europe and the emerging market space.

This could easily become truly catastrophic. The world is in a massive debt bubble and the Central banks are now officially losing control. The stage is now set for a collapse that could make 2008 look like a joke.

If you are not preparing in advance for this, the time to get started is NOW.

You must first realize that there are, present in our lives, enemies. You must then know who those enemies are and act accordingly.

Eliminate as much debt as possible, especially “variable rate” debt, such as credit cards and lines of credit. Interest rates will be rising, so the elimination of debt offers a “real return” of escaping rising rates by creditors.

Get some control over some fresh water.

If you are depending on Social Security, stop.

Follow the course opposite to custom and you will almost always do well...

Its not what you don't know that will screw you up, it's what you know that is wrong. The spin you hear from the mainstream media is intended to mislead you. Open your eyes and face the future. If you leave your head in the sand and ignore it, you are only leaving your butt exposed for the world to kick. This all may sound like gloom and doom, but when you get a handle on what is going to happen, you will have a future filled with opportunity. Fortune favors the Informed.

More next week...

May the Great Spirit be with you always,

Johnny Silver Bear
Chief cook and bottle washer, The Silver Bear Cafe

Disclaimer

All statements and expressions are the sole opinions of the editor and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. The staff of Silver Bear Cafe are not registered investment advisors and do not purport to offer personalized investment related advice. The publisher, editor, staff, or anyone associated with, or associated to the Silver Bear Cafe may own securities mentioned in this newsletter and may buy or sell securities without notice.