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

As I sit here, at our farm, in Northern Anderson County, Texas, on a very pleasant Saturday afternoon, I find myself pondering what I might have to say, concerning the convolution which is our economy, and the nature of its Financial Markets. It seems to me that the nature of our Financial Markets has become unnatural. I feel that I must pinpoint the problem and, once again, at the risk of coming across like a "one trick pony", address and identify the culprit as the Federal Reserve, and the perverted influence that its criminal enterprise wields on almost everything.

This last week's "non-taper event is, to me, so astoundingly telling, that I am truly dismayed and disgusted at the lack of "uproar" from the public. So, once again, I will state the obvious and reiterate: the Federal Reserve is a private bank, owned by private banksters, of a mostly European background, that I generally refer to as "the Darkside".

It is my contention that "the Darkside" is responsible for having created unnatural conditions that are adversely affecting the natural balance of the whole world. There are forces at work that are messing with Mother Nature. And, as we all know, it's not nice to mess with Mother Nature. At this point I will lean on an excerpt of one of my previous rants: Boiling Frogs.

Which brings me to Good and Evil.

I have a stock broker friend who was, apparently, schooled to view the world as one big trade. Each trade had two sides. The buyer, and the seller. But he also tends to think of each trade as being made up of a winner, and a loser. There is something strangely human about the concept of winners and losers. In the food chain there are predators and prey, but only among humans are there winners and losers. When we eat an ear of corn, we do not consider the corn to be a loser. When we have a nice juicy steak, we do not consider the cow to be a loser, (I realize that there are some among us that do, but I believe that they are confused). Anyway, my broker friend believes that in order for him to win, someone must lose. If he is correct, then my utopian dream of a win win situation could be just that, a dream.

In numerous essays that I have penned, preceding this one, I have identified those forces concerned with predatory economics, financial terrorism, and world domination, as "the Darkside". My continuing research has not only more clearly defined their motives, but has more clearly defined their methods as well. Oh, by the way, although I realize that what follows smacks of "conspiracy", my exploration has provided me with an undeniable epiphytic understanding.

The earliest historical references to "the Darkside" that I have found came from the bible. In Matthew 21:12-13 we are told that:

"Jesus entered the Temple area and drove out all who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves. 'It is written,' he said to them, 'My house will be called a house of prayer but you are making it a den of robbers.'"

These money changers were a group of opportunists who chose to prey on the Jews. Knowing that in order to comply with the rules of the temple, the Jews had to have a certain form of silver coin, to tithe, known as shekels. The money changers would buy them all up and then charge exorbitant fees to convert what ever coinage the Jews possessed into shekels. Jesus viewed this practice as a violation of the Sanctity of God's temple and initiated the first recorded battle between the Faithful Good and the Economic Evil.

The Money Changers have always been the members of society that create, exchange and manipulate the quantity of money, for their own gain, usually quasi legally, if not in an outright feloneous manner, to the detriment of everyone else. These people constitute a group of imbalanced predators who employed dishonesty and deceit to ply their trades.

Okay, to sum up this first section, I believe that the world has, at least, temporarily, been taken over by an evil cadre of miscreants, whose purpose it is to take over the world. They have, somehow, wrangled the power to create money out of thin air, from an apparent brain dead population. Their vision is, in my opinion, sorely lacking. They are not exceptionally smart, but they are exceptionally evil. The great consequence of this exercise is that most of us will be hapless victims in the face of their insatiable greed.

This week, Alasdair Macleod highlights the folly of the Darkside's agenda, and explains the irrefutable outcome of their autoerotic exercises.

You don't tug on Superman's cape
You don't spit into the wind
You don't pull the mask off that old Lone Ranger
And you don't mess around with Jim - Jim Croce

From Alasdair Macleod:

One thing is certain in life, besides death and taxes, and that is if you expand the quantity of money prices eventually rise; or more accurately the purchasing power of debased money falls. The problem is how to measure currency debasement, and this has been a topic of heated debate since fiat currencies first developed. This has led me to propose a new measure of money, which at James Turk’s suggestion I am calling the Fiat Money Quantity (FMQ). The purpose is to gives us a measure of fiat money that enables us to assess the danger of currency hyperinflation. I shall be publishing a paper on this shortly explaining the methodology.

The principle behind it is to signal deviations from the long-term trend of currency growth to alert us to both monetary crises and excessive inflation. The approach is to unwind the historic progression from full gold convertibility to the current state of no convertibility. Our gold was first deposited with our banks, and then from there with the central bank. In return for our gold deposits we have been issued cash notes and coin and credits in the form of deposits at the bank, and our bank equally has deposits at the central bank.

The FMQ is therefore comprised of the sum of cash and coin, plus all accessible deposits, plus our bank’s deposits held at the central bank. This for the US dollar is illustrated in the chart below. 

The dotted line is the long-term exponential trend rate, and it is immediately obvious that the FMQ is now hyper-inflating. It currently requires a $3.6 trillion contraction of deposits to return this measure of currency quantity back to trend.

This accurately sums up the problem facing the Fed. We must understand they are in an almost impossible position that dates back to their monetary response to the banking crisis. Not even Paul Volcker could have got us out of this one. Once the addiction to weak money hits this pace there is no solution without threatening to bring down the whole system.

On the Economc War Front

Over the last few days we have been following reports, apparently issued by representatives of the Bank for International Settlements. These reports were concerned with the fact that a very serious bank crash was on the horizon. It was meant to be interpreted as a warning, that the BIS was sharing with the world, by exposing another bank's indiscretions.

Although I believe that we are in for the most tumultuous October in American history, when it comes to Financial issues and bank solvencies, it is interesting to hear one arm of the octopus tattle on another. All the banks in question are, after all, owned by the same cartel. The BIS, World Bank, IMF, Federal Reserve, German Bundesbank, Citibank, JPMorgan Chase, Goldman Sachs, Japan's biggest banking house Nomura Securities, The IRS (a private corporation registered in Delaware) and dozens of other major financial institutions are all owned by the same money changers that are and have been at the center of all our ongoing discussions, concerning criminal economic aberrations, for many years.

They are all selling Snake Oil in one form or another. The news is nothing more than Snake Oil doused propaganda which is meant to distract. While we are concentrating on trying to determine which bank is about to crash, and our attentions diverted, the BIS will most likely be attempting to force an end run, while appearing to be exerting pressure on Bernanke to taper, all for political expediency. Those of us, that are able to continue to think critically, realize that, if the Fed ever stops monetizing debt, the economy is toast. Unhappily, we also understand that if the Fed continues to monetize debt, the dollar is toast. Either way a very large group of persons is about to get screwed. Will it be foreign bond holders (a "dollar is toast" scenario) or American stock holders ("the economy is toast" scenario) Either way, it might be prudent for those of us with a clue, to have some bacon on hand (PMs) to have with the toast.

For those of you with a knack for sorcery, a Snake Oil recipe. This one is a culinary contribution from Will Shakespeare:

"Eye of newt, and toe of frog,
Wool of bat, and tongue of dog,
Adder's fork, and blind-worm's sting,
Lizard's leg, and howlet's wing,--
For a charm of powerful trouble,
Like a hell-broth boil and bubble." - Macbeth (IV, i, 14-15)

From German Economic News:

The Bank for International Settlements, the most powerful bank in the entire world, has just announced 'the crash' according to this story below translated below from Germany.

Is this why the US Federal Reserve has just decided on QE infinity?

We appear to have reached a new era in the collapse of the US economy and our country, they aren't even going to try to hide nor stop this any more. The crash has been announced by BIS.

The decision by the U.S. Federal Reserve to continue indefinitely to print money (here ) might have fallen on "orders from above".

Apparently, the central banks dawns that it is tight. Very narrow...

The most powerful bank in the world, the Bank for International Settlements(BIS) has published a few days ago in its quarterly report for the possible end of the flood of money directly addressed – and at the same time described the situation on the debt markets as extremely critical. The "extraordinary measures by central banks" – aka the unrestrained printing – had awakened in the markets the illusionthat the massive liquidity pumped into the market could solve the fundamental problems (more on the huge rise in debt - here ).

This clear words may have meant that Ben Bernanke and the Federal Open Market Committee, the Fed got cold feet. Instead, as expected, which is now formally announcing the end of the flood of money, the Fed has decided to just carry on as before. If one is to the BIS experts believe that no single problem is solved. All problems are only increasing.

Because the BIS but apparently does not know how they get the genie back in the bottle, it pays to listen to those who were part of the system – but now have no official functions and therefore more able to find clear words. The former chief economist of the Bank for International Settlements (BIS), William White, was also reported to be parallel to the BIS word. His statements are nothing more and nothing less than an announcement of the big crash.

Precious Metals

It just occurred to me, that my waxing philosophically, in these weekly commentaries, amounts to little more than my attempt to bring into focus, the bigger picture. That "bigger picture", in my estimation, is one where the relations of the causes and effects are illuminated so that the causes can be more accurately understood. One might, for instance, believe that inflation was a naturally occurring tenet of economics. That consideration is, although popular and widely assumed, simply hogwash.

I often read, or hear the sentiments of those who believe, that things just naturally go wrong, and there is no purpose served in exploring the causes of the condition but to, rather, simply deal with the ill effects in the best way we can. One example comes to mind when considering the current trend to award every child for participating, regardless of their performance. Rather than dealing with the causes of performance shortcomings, parents have opted to disregard developmental shortcomings, that could be the result of instructional deficiencies, or failed social constructs. It is a means of living with the problems rather than solving them. This approach is the product of "mass think" and is the resulting product of addled, misguided and confused brains.

To illustrate: we, as a country, have been repeatedly victimized by those that we, time and time again, put our trust in to serve us. I believe that Eisenhower was the last president that for, at least, the first three quarters of his presidency was both the Supreme Commander of our Armed Forces and also the Supreme Leader of the United States. Consequently, in the latter stages of his presidency, he innocently asked the advice of the person responsible for his being elected, Nelson Rockefeller. What happened next was, one of the most devastating turning points in the history of the world. Nelson Rockefeller was enabled, through the misguided trust of Eisenhower, to take control of, and exploit, American Military secrets which led to the creation of the Black Budget, Area 51, and the Military Industrial Complex. As an additional travesty, the office of the president of the United States came under total bankster control. It has remained that way ever since. Subsequently, JFK was assassinated for challenging this new found subjugation. LBJ, being perhaps, the biggest criminal in the history of American Politics, found his pre-eminence in the Darkside's cadre a natural occurrence. Not only did he rape the country for hundreds of millions through his continuance of the Vietnamese conflict, he also aided and abetted the banksters in the wholesale theft of trillions when he, illegally, took the silver out of American coinage.

By removing any real value from the coinage he removed any real value from our pocket and pocketbooks. A gallon of gas that could have been purchased in 1964 with a silver quarter would now cost only seven cents. A silver quarter will currently purchase three gallons of gas. How else can I explain that, instead of becoming more expensive, in relation to how long we must work to aquire it, everything would be cheaper, requiring that we work far less time to aquire it. It is the value of our work and toil that has been stolen from us. The value of our time determines the standard of our lives. Those that are responsible for the reprehensible condition we find ourselves in are the causes of our confoundment and, as a result, in this instance, irrefutably thieves. I personally think the perps should be rounded up and hung for treason. If any are found that are already dead, I think we should dig them up and hang them too.

Dan Amoss points out the prevelance of the Federal Reserve (the Darkside) in this week's pick, in matters concerning precious metals. They are, of course, all intermingled.

From Dan Amoss:

The Federal Reserve’s stock market wealth effect is getting stale. As investors contemplate the risks of the Fed losing control of long-term interest rates, stocks may start incorporating reality on the ground — not just Fed actions…

This week, we saw the spectacle of the most anticipated Fed meeting in recent history. In the end, the decision (surprise, surprise) was made to continue the Fed’s stimulus plan, to the tune of $85B a month.

However, most traders, obsessed with the tiniest tweaks to the monthly rate of Fed printing, are missing the big picture: Credit growth has outpaced the economy’s productive potential, both here and around the globe. Each successive growth spurt in money and credit has a weaker marginal impact on the real economy; this requires permanently easy monetary policy, and perhaps, eventually, a formal devaluation of paper against gold.

In his latest Gloom Boom & Doom Report, Marc Faber argues that the Fed has lost control of the bond market. Treasury note yields have doubled from the summer 2012 lows — a development that surely wasn’t part of the Fed’s stimulus playbook. Stock market bulls beware. “Having lost control of the bond market,” Faber writes, “it is likely that the Fed is also going to lose control of the stock market.”

Faber recommends investors reduce their equity positions. He sees the market at risk of an abrupt decline. Faber concludes: “The only asset classes that stand out as being oversold and of relatively good value are industrial commodities and mining companies.”

I agree. Value is scarce. Investors have bid up the prices of even the lowest quality companies far beyond any conservative estimates of value.

Today, I want to republish a year-old essay on gold and the paper dollar-based monetary system. Its core message still applies to what we’re seeing this week (and will apply a year from now.)

Energy

The premises of current economic theory, provides an ever ongoing course of an ever expanding economy. Expansion is the only plan that any economist of any ilk has, so far, come up with. Contraction has never been addressed as a workable option. The theory of infinite growth might wash out in the theory of the universe, but it doesn't make sense when applied to the limited and confined nature of life on earth.

Because of the constrained nature of resource availability, a plan must be constructed to take those limits into consideration. For the past two hundred years, our preponderant dependence on fossil fuels, to accomplish all aspects of industry, have suddenly become untenable. The basic aspects of industry consist of farming, mining and manufacture. An attempt has been made to replace the real sciences of agriculture, geology and engineering with the fake, and utterly laking science of finance. It, along with its predecessor, Keynesianism, is simply a criminal ratioalization and excuse for theft. This misinformation, not unlike Eugentics, was and continues to be disseminated via the Snake Oil propaganda machine which I attempted to explore earlier.

We, as a species, can no longer successfully continue to expand, until we collectively replace fossil fuels with some energy source which is more abundant. Our economies can no longer expand. Because our economies are currently based on debt money, they will surely fail, with no one, any longer, capable of paying the insidious interest on the artificially created debt. From a financial standpoint, one of a faux science nature, we will no longer be capable of sating the artificially created hunger that plagues much of humanity. Even though the hunger was artificially created, it is no less uncomfortable..

Kurt Cobb introduces us to the works and thoughts of a prescient visionary, Albert Bartlett.

From Kurt Cobb:

Albert Bartlett might have been another obscure physics professor had he not put together a now famous lecture entitled "Arithmetic, Population and Energy" in 1969. The lecture, available broadly on the internet, begins with the line: "The greatest shortcoming of the human race is our inability to understand the exponential function."

The logic is surprisingly simple and irrefutable. Exponential growth, which is simply consistent growth at some percentage rate each year (or other time period), cannot proceed indefinitely within a finite system, for example, planet Earth. The fact that human populations continue to grow or that the extraction of energy and other natural resources continues to climb does not in any way refute this statement. It simply means that the absolute limits have not yet been reached.

Bartlett, who died this month at age 90, gave his lecture all over the world 1,742 times or on average once every 8.5 days for 36 years to audiences ranging from junior high students to seasoned professionals in many fields. His ability to stay on message for so long about something so important should make him the envy of every modern communications professional.

His favorite shortcut is the doubling time, the time it takes to get to twice the original number at a constant rate of growth. The formula is 70 divided by the percentage rate of growth per year (or other period). Just a 2 percent growth rate doubles the rate of use of a resource or the size of world population in 35 years. Actual world population growth is about 1.2 percent per year today, which seems benign; but, it implies the next doubling within 58 years to 14 billion. (U.N. forecasts project world population will reach 10 billion by 2070--57 years from now--and continue to grow through 2100.)

In his lecture Bartlett relates that in his hometown of Boulder, Colorado, city council members once stated publicly their preferences for population growth rates ranging from 1 percent to 5 percent per year. In the course of 70 years, roughly one lifetime, the 5 percent rate would make Boulder's population (about 100,000) some 32 times larger or about 3.2 million, which would make it the third largest city in the country behind Los Angeles and in front of Chicago. A city that size could not possibly fit in the valley now home to Boulder, Bartlett explains. Attempting to do so would inevitably eliminate all open space, something highly prized by Boulder residents.

The Fed

If there is one recurring theme on this web site that I highlight when ever the chance arises, it is to make sure that every warm bodied person that ever peruses the pages of the Bear comes away with the knowledge that the Federal Reserve is the root of all evil in the universe.

I have found that no matter how many times or how many ways it is stated, it is never too many. If we all did or level best to rid the world of the Federal Reserve in particular and central banking in general, the world would be a much better place for all of humanity.

Today we are grateful for Mr. Shedlock's efforts to shine a light on the vampire which is the FED.

From Mike "Mish" Shedlock:

Anyone smart enough to withdraw from the race to replace Ben Bernanke as next Fed chairman must have something on the ball, at least temporarily.

The Larry Summers' haters got their wish today as Summers withdrew his name from consideration.

Summers called president Obama, then issued a a formal withdrawal letter stating:

"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery."

Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub par job creation.

The criticism of Summers is justified, but will Yellen be any better? I suggest the answer is a resounding no. She is more dovish than Bernanke, and that is saying quite a lot.

Let's compare ...

In Tweedle Dum vs. Tweedle Dee; Does Janet Yellen Have What It Takes? I stated ...

The detractors win both sides. Neither Yellen nor Summers is qualified. In fact, there is not a single person who would take the job that is qualified. There should not be a Fed at all.

The idea that a group of economic wonks can sit down and micromanage the economy to health is preposterous. Central bank clowns have proven time and time again they have no idea what the interest rate should be.

Financial Survival

I have addressed, in many former posts, a conspiracy on the part of some very wealthy elitists, in order to control the American people through the public educational system.

It is a well known fact that we have been, for the last several generations, indoctrinated to believe hooey, in the form of revised history. The whole basis for our understanding of the foundations of our country (and that of the world for that matter) have been altered and tainted with revisions, that a small group would have us believe actually took place.

Earlier this week Dr. Ron Paul came out, during the promotion of his new book, The School Revolution, with a comment concerning home schooling, and the role of American mothers in the involvement. Misled and unthinking mothers everywhere, were quick to condemn such a plan as threatening their, already challenged, positions in the work force.

This brings up another blatant example of the Sheeple's failing to deal with causes of a situation and only be concerned with effects.

When I was growing up, in the fifties and sixties, my Mom was at home. She didn't have a job, other than attending to that noble profession of being a housewife. We weren't home schooled. Public education, at least at the schools I was fortunate enough to attend, were staffed with knowledgable, well trained teachers that followed a curriculum that was robust and very adequate, although in looking back, I can perceive the beginnings of the revisionist history effect. Then, through the criminality of both Lyndon Johnson and later Richard Nixon, a situation arose which, through the debasement of our currency, degraded our standard of living. These actions provided for the necessity that both parents would have to work, just to sustain the standard of life that had already been achieved. The cause of this basic aberration was the successful theft of the ease of our existences. What would be a proper punishment for someone who stole from you, the quality of your life? Had we hung LBJ and Nixon for their trespasses, we, as a country might have twarted that, and any future theft way back then. The second ammendment is, after all, a simple remedy for tyranny. Oh, by the way, we have another bozo in the same position doing the exact same thing to us at this very moment.

From Kelly Diamond:

Secession as a word exists only because first humans wanted to disassociate from a given collective.

Look at mainstream society and there are groups and labels galore!  Starting in school with WHICH school, then the cool kids, drama club, jocks, and skaters.  Then in university it's not only about WHICH school but, all of a sudden, it's about major, race, gender and sexual preferences.  Then you graduate, and added to the list are political bent, socio-economic status, and religion and denomination of said religion.  Now do the same thing with location: street name, city, zip code, county, state, country…  Or in the case of a job, whether or not you are union. 

The categorizations don't stop!!!  Look at when we have babies!  What percentile are they in weight, length, development, aptitude…

When I hear anyone talk about secession, I immediately ready the confetti and balloons to celebrate freedom from some sort of contrived group. 

Secession is all around us and laced throughout human history. 

I've heard it said that how we raise our children can also be our biggest form of activism.  And until I heard that, I never once considered how profound an effect child-rearing could have on the future.  I've since been rather diligent to create a peaceful home built on mutual respect and reason for my children to demonstrate that such conduct is more preferable to that of force or carrot-stick incentivizing. 

But to make the decision to secede from institutionalized education is HUGE!  Whether it be preemptive or mid-stream, any time is a good time to take children out of prison!  It simply isn't natural for children to compartmentalize their education.  Learning can happen anywhere and parents who can and do show that to their kids have already made indelible strides in teaching them the virtues of being a unique individual.

 

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 think 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.