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 American middle class, one of the last products of exemplified capitalism in the U.S., is collapsing rapidly. Capitalism hasn't failed. What has failed is the foundation of our system of governance, which was originally conscripted with the task of upholding of the rule of law. The rule of law no longer provides the citizenry of America any protection at all, as a result of systemic corruption.

The obvious lack of regulation has left, undefended, the freedom saving tenets of the rights to private property. We didn't get here by accident. Choices were made by some very wealthy and powerful people. Alas, under the ruse of "political correctness", the sheeple have willingly lined up for their fleecing, distracted by the attraction of bread (snap cards and other federal subsidies) and circuses (never ending wars and false flag terrorism).

50 million Americans now live in poverty

Over half of all Americans are going to depend on food stamps at some point in their lives

13 million more Americans are expected to lose their homes before the current crisis runs its course

Last Monday night, 06/10/13, the Senate passed a five-year farm bill that contained $4.1 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP) over ten years. This ensures that the only debate now will be about how much to cut—and it's likely to result in cuts much deeper than $4.1 billion.

The House Agriculture Committee passed a farm bill last month that cut $20.5 billion from SNAP by removing "categorical eligibility", which would take food stamps away from 2 million Americans and hundreds of thousands of children.

It has been my contention, for quite some time, that "a perfect economic storm" will result from a combination of rising interest rates, which will complete the decimation of our already fragile economic condition, and the chaos that will ensue when the food stamp program is, for political budgetary reasons, undermined. It matters not how you, personally, feel about welfare. Your concern should be how you, and yours will be affected when surrounded by the tumultuous nature of wide spread insurrection.

From Bill Holder:

The bullish case is that interest rates are going up because the economy is recovering…well, no it is not.  In fact, if you look at the numbers the economy is stalling from its QE aided lower plateau and about to plumb new lows.  Just look under the hood of some of the reported numbers, last week for example the non-farm payrolls supposedly rose 175,000 jobs.  If you look into it, some 75% were lower paying and non-skilled jobs…plus 205,000 jobs were “magically” created by the BLS.  Without this monthly “fudge factor” the real number would have been a negative 30,000 jobs…which is what the economy actually feels and smells like.

But talking about bogus reporting is not what I’d like to write about, the important (and scary) thing is that rates ARE rising.  Rising interest rates (even though they never should have gotten to these low levels in the first place) will cause all sorts of problems.  Before I go any further I’d like to point out that with the exception of Japan (during the '90s and 2000's), global interest rates are lower than they have been in some 400 years since bond markets began to exist.  We live in a world where interest rates are lower than they ever have been AND in a world that is more leveraged and has less unencumbered collateral than at any point in recorded history.

On the Economic War Front

As the popularity of the Bear continues to grow, we are beginning to receive an ever increasing amount of email asking for a "primer" of sorts. Those who have, only recently, "got on board", might have missed some of the basic realizations that have been previously provided by contributors such as G. Edward Griffin, Paul Craig Roberts, Pat Buchanan, Catherine Austin Fitts, and Sheldon Emery, as well as many others. We are constantly trying to provide an explanation as to the who, what, why, where, when and how of our present condition. I have (personally) always held that, in order to implement a solution to a problem, you must first, not only uncover the cause of the problem, but also make the cause widely known, and eliminate it. Consequently, the problems in America (and the rest of the world for that matter) are the result of a plan that was conceived many years ago. It must be considered the "grand-daddy" of all conspiracies. The following is an excerpt of an article by John Browne, "Crushing the Middle Class".

From John Browne:

Like a carefully memorized religious incantation, politicians and central bankers continually stress how their stimulus policies are designed to promote the interests and prosperity of the middle class. Cynical observers may note that this brave political stance may have something to do with gaining the support of the vast majority of voters who identify themselves as "middle class." However, the cumulative effect of their economic programs has achieved the opposite. The middle class is being crushed under increased taxes, negative real interest rates, debased currencies and increasingly intrusive regulations.

A large and healthy middle class is the single most important bastion of democracy and freedom in the modern world. Individuals who identify with the middle class exhibit strong support of their nation and economic system. A small, weak middle class opens the political door to dictatorial control and tyranny. This was the case in the waning days of czarist Russia when, the small Bolshevik party was able to court the discontent of the underclass to seize control over more than one hundred million people.

Precious Metals

The current state of the precious metals markets is a bit frustrating, to say the least. Are the prices being criminally manipulated? If they are, and the proscecution of the criminals involved could somehow be accomplished, would prices go up or down?

Just how committed should you be to holding gold (and silver)? Are you holding too much gold as it is…and not enough U.S. dollars? Or should you be holding anything BUT gold (and silver)? Beyond the cash you need to pay your monthly living expenses, should you hold cash at all? Should every bit of your savings be held in ounces of precious metals? And every bit of your investments be in shares of the companies that drag those precious metals out of the ground?

It might have seemed like an extreme position a few years ago. Heck, it may seem extreme now! But SRSrocco is here to explain why it could be the most sensible, most conservative thing in the world to do…

From SRSrocco:

Even though silver investment demand has picked up recently due to the lowest prices in over two years, this may be just the tip of the iceberg for what is to come in the future. Currently, only a small fraction of investors understand silver's future potential but that will change in the next few years.

Presently, the Main Stream Media bandwagon has been quite busy putting out bearish analysis on silver demand and price. Whether it's due to a decline of industrial demand or a lack of silver investment by those in India, there doesn't seem to be a shortage of this sort of commentary. However, this should not be a concern for those who understand the true fundamentals in owning silver.

The underlying problem with this present bearish commentary is that it is so typical coming from an industry that provides forecasts based on superficial, outdated and manipulated data. The world's financial system is being propped up by trillions of dollars of worthless paper instruments that have totally distorted the market's ability to value assets correctly. Some of these so-called assets are severely inflated, while others such as silver, are tremendously undervalued.

Energy

During the twentieth century, cutting edge researchers, inventors and scientists were able to unlock the mysteries of harnessing our planets's natural energies. People like Nikola Tesla, T. Henry Moray, Edwin Gray, and Paul Baumann among many others developed electric motors that derived their power from the magnetic fields of the Earth. Dr. Robert Adams developed astounding designs of electric motors, generators and heaters that derive their power from permanent magnets. Dr. Tom Bearden has two working models of a permanent magnet powered electrical transformer. Jean-Louis Naudin has duplicated Bearden's device in France. The principles for this type of device were first disclosed by Frank Richardson in 1978. Troy Reed has working models of a special magnetized fan that heats up as it spins. Beyond these developments, multiple inventors have identified working mechanisms that produce motor torque from permanent magnets alone. Besides experimentations that create electricity, there have been dozens of breakthroughs using the created electricity to generate even more power through super-efficient electrolosis, implosion/vortex engines, cold fusion, and solar assisted heat pumps.

The point is, as a civilization, we already have the technologies that could provide pollution free energy at no cost. Technologies that could eliminate greenhouse gases, desalinate all the water humanity could ever need and pump this water to any location on the planet, at no cost! We could grow unlimited quantities of food in heated greenhouses, clean up the environment, and eliminate the causes of disagreements and wars worldwide. Where are these technologies? Why is mankind being deprived of their benefits?

From Bruce Mulliken:

It can be made from bio-feedstocks or natural gas.

It's non-toxic and non-carcinogenic.

There's no soot, no black carbon emissions.

When made from renewable biomass or biogas, CO2 emissions are up to 95 percent less than conventional diesel.

It handles and stores similar to propane; refueling and on-board storage is the same.

Diesel engines need little modification to run on DME.

The price of DME is expected to be more stable than diesel.

And chances are you've already used it: It's a propellant in many aerosol cans.

Volvo Trucks of North America has announced that it will launch DME-fueled heavy duty trucks in the North American market by 2015. Volvo is the first North American manufacturer to announce plans to utilize a new, clean-burning alternative fuel.

Volvo's DME technology will be available in a Volvo D13 engine, the top-selling heavy-duty engine in the world. The DME-powered vehicles will join a line-up that already includes models that can be specified to run on compressed or liquefied natural gas.

The Fed

The Federal Reserve is solely responsible for all the inflation in the U.S. The Federal Reserve is a criminal cartel controlled by multinational interests. They have, for 100 years , progressively gutted thr coffers of our treasury. They may be thieves, but they're our thieves.

Central Bankers, and others of the same ilk, have been robbing us since the tenth century. They started, however, plying their trade a thousand years before that. We have all heard the story of the money changers being evicted, from the temple, by J.C...

From Dan Steinhart:

Watching from afar as inflation in Argentina grows worse – officially 11%, realistically around 25% – it's tempting to think of the scourge of fiat money as a modern phenomenon. If only FDR hadn't confiscated US citizens' gold to usher in the beginning of the current era of paper money, we could be living in a precious metals paradise, as our ancestors before us did.

That narrative, of course, is utterly false. Humans have been screwing up money for centuries, beginning with China's printing of jiaozi in the 10^th century. History is littered with episodes of hyperinflation, but my favorite is that of revolutionary France as told by Andrew Dickson White in Fiat Money Inflation in France. It contains the most vivid description I've seen of how inflation transforms into hyperinflation, and how far governments will go to maintain their power in the face of a dying currency.

France's hyperinflation began as all hyperinflations do: the state printed too many assignats (pictured below), and they rapidly lost their purchasing power. French citizens sought alternative stores of value and mediums of exchange, as any intelligent person would.

Financial Survival

Most of us go through life dreaming of the way we would like things to be. More time. More Money. More freedom. More fun. Very few actually take the steps needed to transform our dreams into reality. What it takes to start a dream in motion is action. And follow-through.

The Silver Bear Cafe provides resources to prepare, maintain, and embellish systems to survive the imminent global financial collapse, and counteract the effect of both currency inflation and globalist control. Our comments and essays are compiled daily and feature the foremost authoritative experts in the world.

The Silver Bear Cafe is intended to provide an educational resource relating to the conservation and preservation of capital. Understanding the inner workings of the markets will supply the empowering knowledge necessary to make strategic financial decisions and counter the adverse effects of geopolitical turmoil and global financial meltdown.

Our promise to you is that we will responsibly verify the veracity of each and every article that is posted on the "Bear". We will continually authenticate the sources of all the information that is contained on the website. We will gratefully accept ideas and suggestions that will make the Silver Bear Cafe a more valuable resource.

From Monty Pelerin:

It is easy to be upset about what is happening all around. The economy is being destroyed, deliberately, by insane economic policies. Incentives to work are being eliminated by punishing work. At the same time rewards are increasing for not working. Not surprisingly we get less of what we penalize (work) and more of what we subsidize (non-work).

As an economist I get sick over what I see happening to what was once a great engine of productivity, capital creation and improvements in standards of living.

After two centuries of progress that amazed the world, the conditions necessary for growth and productivity are steadily being removed. Their presence allowed the miracle of America. Their absence guarantees the decline. Carried to extreme, the US could become a second or third-world nation within a few decades. Virtually all changes in the last five to ten years point in this direction and these changes are accelerating.

As pained as the economic retrogression is, the loss of freedom is even more disturbing. It was free markets and free men that made America the dominant economic power and the beacon of freedom. Without freedom, no economic policy can succeed. Yet, just as economic policies seem designed to destroy rather than create, so too does the role of government as steadily destroys freedom with its expanded oppression and power. The absence of freedom is tyranny. The absence of freedom is also poverty.

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.