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

How can the Fed keep buying treasury paper, which allows the Government to keep on borrowing? That is what QE is. A desperate attempt to apply smoke and mirrors to keep the party going. Well, the short answer is, once again, they can't. I know it, you know it, they know it. While I realize that keeping the bond market inflated is the primary and mandated aim of the Central Bankers, (the Fed), because that is the mechanism through which they create money out of thin air, they have exhausted their ability to continue the charade much longer. They have, almost, used up all their bullets.

What new legislation will they dream up for their puppet politicians to pass? Will they go after our retirement accounts? If it never occurred to you that the Federal Reserve, (a private corporation), owns the U.S. Government, please read the following statement made by Fed Governor Ben Bernanke.

"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

What in blazes is positive inflation? And why would anyone, representing the people, want the price of goods and services to rise? Who, but a banker could benefit from inflation? Inflation equals rising prices. Rising prices equal more loans. More loans equal more interest. The natural evolution of man would have provided for a continuing improvement in the standard of life for all persons, if it wasn't for the heinous contrivance called inflation.

This week, at the mere suggestion that the Fed might "taper off" the artificial support that they have been providing the market for several years, the institutional investors ran for cover. The DOW dropped over 500 points! I believe that this is the beginning of the end. A situation, in 2004, I predicted would occur in 2006, is finally transpiring.

The illustration I chose to accompany this portion of my weekly rant is entitled "Satan." That pretty much sums up how I feel about the megalomaniacal morons that make up the central bankers of the world. This group, which obviously includes their minions at BOA, Goldman Sachs, J.P. Morgan, et al, are public enemies. Middle Class Americans, who have been the victims of this crime, have yet to fully realize what's going on and who is responsible, and that, for the sake of our economic survival, it must be stopped.

From Michael Lombardi:

While government data continue to show a lack of inflation in the U.S. economy, the bond market screams the opposite.

The Consumer Price Index (CPI), the most commonly quoted measure of inflation, increased only 0.1% in May after declining 0.4% in April.

Since the beginning of the year, from January to May, inflation in the U.S. has edged higher by only 0.2%. (Source: Bureau of Labor Statistics, June 18, 2013.)

But the bond market says this isn't true.

Since May, we have seen yields on U.S. bonds skyrocket. Take a look at the chart below; it shows the change in yields on 30-year U.S. bonds (indicated by the red line) and 10-year U.S. notes (marked by the blue line). Note the circled area.

In a matter of a few weeks, yields on 30-year U.S. bonds have jumped about 19% and 10-year note yields have skyrocketed almost 35%.

This is dangerous for bond investors. As the yields on bonds climb higher, their prices slide lower, bond investors face losses…and they're fleeing the bond market.

For the week ended June 5, long-term bond mutual funds witnessed an outflow of $10.9 billion. Looking at it on a monthly basis, the long-term bond mutual funds haven't seen an outflow since December of 2008. This month may just be the first since then. (Source: Investment Company Institute, June 12, 2013.)

Even the foreigners, who have been providing credit to the U.S. economy, seem to be running toward the exit. According to Treasury International Capital Data, in April, foreign residents were net sellers of long-term U.S. bonds. Private foreign investors accounted for net sales of $17.8 billion in U.S. bonds, and foreign official institutions' net sales of U.S. bonds were $6.9 billion. (Source: U.S. Department of the Treasury, June 14, 2013.)

Dear reader, inflation is the biggest enemy of the bond market. When inflation increases, bond prices decline and yields soar.

Over the past four years, the yields on U.S. bonds have declined and bond prices have risen due to the Fed's rigorous easy monetary policy. With massive amounts of money printing and interest rates being kept artificially low, inflationary pressures are now building up. Food and energy prices, which the government inflation figures ignore, are increasing. The rise in bond yields and the collapsing bond market mean inflation lies ahead.

On the Economic War Front

The Constitution of the United States is being trashed. Practically all of the problems in our country (financial and otherwise) can be attributed to the continuing subjugation of the U.S. Constitution. Had the remedies for such actions, which are provided in the text of the Constitution, been applied, many of our former, (as well as current), leaders would have been prosecuted, removed from public office, and jailed (or worse).

The Federal Government no longer adheres to the same laws as the rest of us. There is, no longer, a branch of the government willing to prosecute its own. We must fully understand the causes of the problems before we have any chance, at all, of solving them.

Members of Congress have no right to breathe (metaphorically speaking) without our permission. All the bailouts, as well as the special considerations, which include the compensation packages that they have"voted" for themselves, are illegal. These miscreants are criminal putzs that are pretending to "legally" pass unConstitutional abominations, and their actions are prosecutable.

The sheeple out there, that are completely dependent on these handouts, are no longer capable of being responsible citizens. Responsible citizens would insist that the criminals (both the banksters and the politicians) that were responsible for their hardships be prosecuted.

If those sheeple have allowed themselves to be sufficiently "dumbed down" to no longer be willing to stand up for their rights, that is their problem, not ours. Our problem involves ridding America of the vermin that are criminal politicians and the crminal banksters.

Mr Chatham understands the causes and effects of Constitutional subjugation and shares, with us, some remedies in his reflections below.

FromTom Chatham:

When we talk of our standard of living most people equate that to all of the stuff and the money that they have. They feel that the more of each they have the better they are doing. Unfortunately for most, the last few decades have seen an artificial prosperity in the U.S. with an artificial standard of living. The standard they think they have is propped up by massive amounts of fiat money that can and will evaporate soon.

We have been brought to this point by irresponsible policies created by irresponsible people that seek only to enrich themselves at the expense of the masses. Many Americans have massive amounts of mortgage debt, automobile debt, credit card debt, student loan debt, business debt, medical debt and/or recreational equipment debt.

When the money ends and the people can no longer pay for the things that make up their standard of living, they will lose most of those things and be left with a lot of cheap trinkets made in China, many of which are probably broken already, to signify their standard of living.

When the artificial standard of living collapses into the real standard of living that most will end up with, there will be a lot of denial then a lot of anger. This will be a dangerous time for everyone, especially those that made prudent decisions most of their lives and lived within their means and will still have most of their wealth in tact when it's over.

Precious Metals

A little known and oft neglected investment opportunity lies in the accumulation of palladium.

(From Wikipedia) Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired by her when she slew Pallas. Palladium, platinum, rhodium, ruthenium, iridium and osmium form a group of elements referred to as the platinum group metals (PGMs). These have similar chemical properties, but palladium has the lowest melting point and is the least dense of them.

Over half of the supply of palladium and its congener platinum goes into catalytic converters, which convert up to 90% of harmful gases from auto exhaust (hydrocarbons, carbon monoxide, and nitrogen dioxide) into less-harmful substances (nitrogen, carbon dioxide and water vapor).

Palladium is also used in electronics, dentistry, medicine, hydrogen purification, chemical applications, groundwater treatment and jewelry. Palladium plays a key role in the technology used for fuel cells, which combine hydrogen and oxygen to produce electricity, heat, and water.

Ore deposits of palladium and other PGMs are rare, and the most extensive deposits have been found in the norite belt of the Bushveld Igneous Complex covering the Transvaal Basin in South Africa, the Stillwater Complex in Montana, United States, the Thunder Bay District of Ontario, Canada, and the Norilsk Complex in Russia.

Recycling is also a source of palladium, mostly from scrapped catalytic converters. The numerous applications and limited supply sources of palladium result in the metal attracting considerable investment interest.

From Matt Insley:

“Police in one New Jersey city are warning about a rise in catalytic converter thefts in vehicles at train stations, schools and other areas” New York’s Fox 5 reports.

Byron King, our globetrotting geologist, passed the story along earlier this week — it points to an ongoing trend among thieves: forget gold, steal platinum!

Today we’ll take a look at why both metals may fall short to a dark horse in the precious metal race. And no, I’m not talking about silver…

“The thieves are targeting larger vehicles” the news report continues “especially SUVs like the Jeep Cherokee. Police say that’s because the converters are larger and contain more platinum, which is currently valued on the open market at approximately $1,500 per ounce. They are also easier to crawl under to get to the converters.”

Catalytic converters contain a substantial amount of platinum — anywhere from $100-400 bucks worth. When pollutant-filled exhaust from your car’s engine passes through a platinum-lined catalytic converter, the final emitted product is less harmful to the environment.

So you see, even with a general pullback in metal prices, thieves are still hot on the trail of exhaust pipe components. If metal prices are down, no one told these thieves!

Energy

Through the editorial slant of the Silver Bear Cafe, I have always attempted to champion and defend the rights and liberties of the American Middle Class. The propaganda being spread via the misinformation campaign tends to glaze over some disturbing facts like, for example, the global depletion of energy. There is an economic war being waged against us. It is part of the Dark Side's ploy is to keep us in the dark concerning some very important issues. We thought that continually bringing attention to the lies might help some people wake up to the tyranny.

From the onset of this endeavor, I have constantly tried to formulate and provide some kind of solution. The solution, had it been applied in time, would have required the bulk of the middle class to wake up and react. They didn't.

I have personally come to realize that, although my efforts were intended to help wake up the middle class, they couldn't/wouldn't listen. Most have been sucessfully assimilated and, as a result, absorbed by the collective. This makes resistance futile. The similarities of the situation bring to mind the voyages of the Star Ship Enterprise. Instead of calling it the "the Dark Side", let just call it "the BORG". The forced assimilation of all persons, into the collective, rings of Star Trek:

The Borg are without question one of the most fearsome and relentless forces in the Milky Way galaxy. A massive society of cybernetic automatons abducted and assimilated from thousands of species, the Borg Collective is intent on achieving "perfection" by spreading its influence into every corner of space, consuming technologies and individuals without conscience, obliterating entire civilizations in its wake. And it has a particular interest in incorporating the human race into its "Hive." - Captain Jean Luc Picard, U.S.S. Enterprise-D

Through my attempts to resist the collective, I have only been addressing a small portion of the population. This portion constitutes no more than three percent of the middle class, which means that this entire group makes up less than one percent of Americans. We are all members of the same choir and we take turns singing to one another. The following missive from James Howard Kunstler exhibits a superior ability to think critically, as he poits out how we have been led down a "path of folly". We tend to agree that, at this late date, the damage has already been done. The rape and pillage of our economy is almost complete. There is nothing anyone can do that can stop, much less reverse, what's about to occur.

There is, however, still time to prepare and protect yourself, although, unfortunately, not much...

From James Howard Kunstler:

Societies periodically go insane. Fallacious memes sweep through a frightened and confused populace and bad things happen, bad choices get made. Two bad ideas in particular infect the American thought-o-sphere these days: 1) that non-cheap oil can keep all the rackets of consumerism going; 2) that we can offset all the quandaries of non-cheap oil with accounting fraud and debt creation.

These ideas present themselves in the places of greatest authority and influence. The president says "we have a hundred years of shale gas." The Wall Street Journal says that an inflating Dow Jones index stands for a growing economy. My recent favorite came out of the increasingly demented New York Times on Saturday: Even Pessimists Feel Optimistic About the American Economy. Quoting an econ professor named Tyler Cowen from George Mason University The Times said:

The recent surge in domestic oil and gas production signals "the start of a new era of cheap energy," he said, while less expensive online education programs could open the door to millions of people who have been priced out of more traditional academics.

That was a two-fer of stupidities since A) it ought to be self-evident that $90-a-barrel oil is not cheap oil, and B) that because of A, there's unlikely to be lucrative employment for people who learn double-entry book-keeping on their laptops. In fact, anyone who actually learns math over the Internet must conclude that $90-a-barrel oil will crash all the  supposedly normal operations of a consumer society, including the ability of oil-and-gas companies to get the capital investment necessary for further oil production.

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.

The Federal Reserve is a private corporation made up of criminal slime ball banksters, who have been systematically stealing the savings of American people since 1913. The Federal Reserve was originally set up by criminal slime ball banksters to steal the savings of the American people. That is, and has always been, the sole purpose of the Federal Reserve. They steal our money through the insidious ruse of inflation. Most of the "sheeple" in this country believe that inflation is a natural economic occurrence. That is not true. If it wasn't for the Federal Reserve, all goods would become less expensive as a result of manufacturing technology, improved and refined delivery systems, and free market competition. Without the Federal Reserve, the standard of life in this country would continually improve. They have been able to accomplish and get away with the despicable crime of currency debasement through inflation by "buying" slime ball politicians. They have been "inventing" money out of thin air, and using it to buy members of the United States House of Representatives and the United States Senate, as well as the Executive Branch and the Judicial Branch continuously, since 1913. Without government complicity they could have never pulled it off. Until the Criminal Federal Reserve is abolished and all members, proponents, as well as all of their bought off criminal politicians are arrested and jailed, or shot, or hung, the economic woes of our Country will not only not get better, they will continue to get worse.

If the fact that the Federal Reserve continues to exist doesn't bother you, you are either a criminal or an idiot. If you are an idiot, you deserve to be decimated by the carnage which is about to engulf financial markets the world over. If you are a criminal, your days are numbered. Today we are grateful for Mr. Snyder's efforts to shine a little more light on the vampire which is the Federal Reserve.

From Michael Snyder:

U.S. financial markets are exhibiting the classic behavior patterns of an addict.  Just a hint that the Fed may start slowing down the flow of the "juice" was all that it took to cause the financial markets to throw an epic temper tantrum on Wednesday.  In fact, one CNN article stated that the markets "freaked out" when Federal Reserve Chairman Ben Bernanke suggested that the Fed would eventually start tapering the bond buying program if the economy improves.

And please note that Bernanke did not announce that the money printing would actually slow down any time soon.  He just said that it may be "appropriate to moderate the pace of purchases later this year" if the economy is looking good.  For now, the Fed is going to continue wildly printing money and injecting it into the financial markets.  So nothing has actually changed yet.  But just the suggestion that this round of quantitative easing would eventually end if the economy improves was enough to severely rattle Wall Street on Wednesday.  U.S. financial markets have become completely and totally addicted to easy money, and nobody is quite sure what is going to happen when the Fed takes the "smack" away.  When that day comes, will the largest bond bubble in the history of the world burst?  Will interest rates rise dramatically?  Will it throw the U.S. economy into another deep recession?

Financial Survival

As the editor of the Silver Bear Cafe, I try to focus on the ramifications of world events. I try to understand how what's going on now will affect your pocketbook next week, next month, next year. It is my sole intent to help you consider the possibilities which will, in turn, help you prepare for your financial future.

I introduced "the Bear" to the World in January of 2001. We have all come a long way since then. My delving into politics has been occurring more and more often as it has become, from a survival standpoint, more and more necessary. "The Bear" has become increasingly outspoken with each and every blow that the "Darkside" egregiously levels at our Constitution with the hopes of dismantling our Liberties and Freedoms.

I personally try and cling to a small semblance of hope, but, with the knowledge that there is only three percent of our population left that has yet to be rendered brain dead, a very small amount of hope is all I can muster.

On a positive note, I do believe that our good will eventually triumph over their evil, but, consequently, it will not come until after the revolution. In the following missive, Dr. Roberts expresses even more pessimism than I do.

From Paul Craig Roberts:

In the 21st century the two hundred year-old propaganda that the American people control their government has been completely shattered. Both the Bush and Obama regimes have made it unmistakenly clear that the American people don't even influence, much less control, the government. As far as Washington is concerned, the people are nothing but chaff in the wind.

Polls demonstrate that 65% of the US population opposes US intervention in Syria. Despite this clear indication of the people's will, the Obama regime is ramping up a propaganda case for more arming of Washington's mercenaries sent to overthrow the secular Syrian government and for a "no-fly zone" over Syria, which, if Libya is the example, means US or NATO aircraft attacking the Syrian army on the ground, thus serving as the air force of Washington's imported mercenaries, euphemistically called "the Syrian rebels."

Washington declared some time ago that the "red line" that would bring Syria under Washington's military attack was the Assad government's use of chemical weapons of mass destruction against Washington's mercenaries. Once this announcement was made, everyone with a brain immediately knew that Washington would fabricate false intelligence that Assad had used chemical weapons, just as Washington presented to the United Nations the intentional lie via Secretary of State Colin Powell that Saddam Hussein in Iraq had dangerous weapons of mass destruction. Remember National Security Advisor Condi Rice's image of a "mushroom cloud over American cities?" Propagandistic lies were Washington's orders of the day.

And they still are. Now Washington has fabricated the false intelligence, and president obama has announced it with a straight face, that Syria's Assad has used sarin gas on several occasions and that between 100 and 150 "of his own people," a euphemism for the US supplied foreign mercenaries, have been killed by the weapon of mass destruction.

Considering the utterly insane government ruling in Washington, if human life exists in 2020, it will be a miracle. All the worry about future Medicare and Social Security deficits is meaningless. There will be no one here to collect the benefits.

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.