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

In one of the more enlightening articles we featured in the last week, author Jim Willie brings us up close and personal with his prescience concerning the real reasons why we/they (the U.S. Government) seem to be obsessed with Syria. In his latest missive: Syria, Pipeline Politics, OPEC & the USDollar, Mr. Willie introduces us to the apparent ascension of the Natural Gas Coop, as the organization that will displace OPEC and, as a consequence, cause the unraveling of the Petro Dollar System.

We have been examining the origin and effects of the Petro Dollar System over the course of the summer but, never before, has its mandated nature been singled out as the main cause of all Middle East conflicts. I do not use the term "all" loosely. It has been the system that the Government has, through the application of force, insisted that the world participate in, since the days of Richard Nixon. In retrospect, it is easy to recognize and connect the here-to-for vague dots.

Never before, in history, has the population of America been rendered so irrelevant. Having no understanding whatsoever of Economics, little to no knowledge of geo politics, and tragically, continuing to remain clueless when the question of "Cui Bono" arises, it is no wonder that the American citizens irrelevance has become a hall pass for those among us who would "rule the world".

As most readers of this web site are aware, there no longer continues to be anything, sustainable, in the current system, for us. We no longer matter in the grand scheme of things. Although our taxpayer dollars continue to be cast down the darkhole of military aggression, it will become increasingly difficult for most of us to continue to "live the dream". We have all already been "gifted" by an enhanced standard of living, an incidental side effect of the bigger picture, which has been provided to us over the last forty years. This was a standard that we attained, riding on the backs of others. In some respects, I believe that the standard of living we were enjoying, went to our heads, and resulted in some of us developing feelings of entitlement. This misconception led to situations like union demands for higher wages. Those wage increases coupled with gross mismanagement, led to the decimation of entire industries. The city of Detroit comes to mind. There are far too many folks in other parts of the world that are waking up and longing to also "live the dream". There may not be enough of "the Dream" left to go around.

This week Bill Holter recognizes the relation that the price of oil, and interest rates have in common. He feelings that we may be in for a "squeeze" pretty much sum up my feelings also.

From Bill Holter:

The world is about to if not already feeling a “squeeze.”   I bet by reading the title you thought this would be about gold and silver squeezing the shorts?  This is certainly happening now with the good part yet to come when it turns out that the metal does not even exist to be delivered but…No, the “squeeze” that I am talking about is just everyday life and what is already happening now and what will happen if Syria goes live and the U.S. faces off with Russia and China.

For better than 2 months now interest rates have been moving higher…very quickly.  This is not just a U.S. phenomenon, on balance. Interest rates have gone up everywhere.  We also watched the price of oil break through $100 to the upside amidst decent supply and demand that was surely not even close to off the charts.  Now it has breached $110 on the upside based on the fears of a Syrian conflict.  Both of these, higher interest rates and higher oil prices will hit the common man harder than anything except maybe food prices.

Going one step further, we also have watched for the last 60 days as gold went higher versus all of the major currencies …even as the major currencies trounced the emerging currencies.  The Brazilian Real, Indian Rupee, South African Rand, Indonesian Rupiah and others have outright cratered in purchasing power over (and from before) this last 60 days.   (As a side note, in terms of the emerging currencies, gold and silver have had rallies of up to and over 30% in just the last 90 days, will this maybe add more to their physical demand?).

So the “squeeze” is already on and has been in the emerging economies, now as interest rates and oil go higher, the squeeze will intensify…and spread to those of us in the “leading economies.” …Then you have to wonder what a Syrian conflict would mean.  Will it push prices higher?  I have heard forecasts of $125 per barrel spoken of…even $150 per barrel.  What if these numbers are wrong?

On the Economc War Front

If you are clueless, you can't prepare. As the travesty, which is the collapse of our economy, as well as the rest of the world's economy, continues to make itself generally apparent, I am stunned by the lack of awareness of the general public. In the next four months, the backlash of the wholesale theft of America's savings and deposits will be felt by every cognizant adult human being in this country. At that time, the citizenry will collectively wonder what went wrong, where their retirement funds went, and who were the despicable pieces of slime that made off with their savings? A lot of help that will be.

This week, from the Economic War Forum, we chose a contribution from Jim Quinn's Burning Platform Web Site. Mr. Quinn has masterfully presented a three part series entitled: How to Stay Sane in an Insane World. We choose his third installment as our article of the week. If you have not yet had an opportunity to peruse this series. I would, whole-heartedly suggest that you take that opportunity. I suspect that even the most enlightened of us will find several issues to ponder.

From Jim Quinn:

We are in the midst of a great Crisis that will not be resolved until the mid-2020s. The propagandists supporting the vested interests continue to assure the voluntarily oblivious populace the economy is improving, jobs are plentiful, inflation is under control, and housing is recovering. Bernanke and his band of merry money manipulators, Obama and his gaggle of government apparatchiks, and their mendacious mainstream media mouthpieces have enacted radical measures in the last five years that reek of desperation in their effort to give the appearance of revival to a failing economic system.

Stimulating the net worth of bankers and connected corporate cronies through engineered stock market gains has not trickled down to the peasants. Our owners try to convince us it's raining, but we know they're pissing down our backs. Our Crisis mood is congealing.

The core elements of this Crisis have been discernible for decades. The accumulation of private and public debt; the civic, moral, and intellectual decay of our society; the growing power of the corrupt corporate fascist surveillance state; growing wealth inequality created by crony capitalist skullduggery; the peak in cheap easily accessible oil; and global disorder caused by overpopulation, scarce resources, religious zealotry, and war; combine in a toxic brew of unimaginable pain, anguish and tragedy.

The Crisis began in September 2008 and the sole purpose of the deceitful establishment has been to avert a catastrophe that is destined to extinguish the wealth, power and control they've treacherously procured over the last few decades.

 

Precious Metals

This week, legendary gold trader Jim Sinclair alerted his readers to the fact that, in his austere opinion, the long awaited reversal in the Precious Metals Rally had occurred. I believe the term he used was: "the Big One". I tried to depict the "Big One" with my choice of photgraphs below. Being a diehard gold/silver bug myself, I for one, am ecstatic that the worm, so to speak, may have turned.

It may be prudent to realize that, if he is correct, Mr. Sinclair is also signaling the next chapter in the ongoing saga: The Demise of Empire.

Yes, there are many of us that have taken the steps necessary to protect our futures through the accumulation of precious metals. I am, however, worried that I have not done enough. I realize that only a relatively small fraction of the general population has has made any preparation at all. Nationally, savings rates are at historical lows. What will the rest of the people do in the event of a general economic meltdown. Will they all just pick up and head, in an orderly manner, to the closest FEMA camp? Will we then, be able to sit back comfortably, and, metaphorically speaking, ride happily into the sunset? I think not.

I agree with Mr. Sinclair's appraisal of the situation and I also agree that the rally will continue to accelerate as we approach the "Mania" phase. But, as that mania phase unfolds, there will be, all around us, a catastrophic social unravelling taking place.

It would be wonderful if we could find a vantage point, much like a second story balcony overlooking Bourbon Street, where we could safely view the chaos that I suspect will ensue, much like the spectacle that a Mardi Gras parade provides...

From Jim Sinclair:

The manipulation of the price of gold now favors the bullish side of the gold price structure.

1. After an excruciating wait we have entered the first of two bull price bull phases, this the first of which will that will take gold to $1650, the old high and beyond.

2. In this gold price bull phase the good gold shares will participate and in percentage terms the best will lead.

3. Certain gold producing juniors are going to become majors.

4. Assuming the major gold companies take huge write downs due to their lax in management, they will get meaner (if that could be) and perform in that business the way they should have from the day gold broke above $529.40, moving its price into a run away. Their recoveries will be spectacular.

 

Energy

Just as the Darkside Banksters continue to siphon off any value they can manipulate and isolate, through their felonious front running, the prices of everything are affected.The government, working for the Darkside Banksters, is currently meddling in the most volitile arena in the world when it comes to the price of oil.

The price of energy has, perhaps, the most immediate effect on the economy as so many things are dependant on its price. As the price of oil goes up, the price of gasoline goes up. But the cost to grow our food and heat our homes also goes up. Food and energy have alway occupied a place on the top of our shopping lists.

As the price of energy rises, we, as consumers are left unable to direct our resources towards much else besides survival. Disposable income becomes a feint memory. Without disposable income, the economy becomes endangered.

Since Wall Street supplanted our manufacturing industry with financial products, which currently make up the nations largest (so called) contribution to the world's markets, the beneficiaries have been reduced to only those that work in Wall Street related fields. This is one of the most telling and most apparent instances of the criminal redistribution of wealth, of any that come to mind. Consequently, the future of American industry has been sabotaged and the future of the stock markets looks very bleak indeed.

From Dan Dicker:

It's time to step out from my 'normal' role as the 'energy expert' and make a comment or two on the markets in general, just as a professional trader who's seen quite a bit in his almost 3 decades of daily experience with capital markets and the way they act. Patterns emerge that aren't foolproof, but they've served well over the years and they are making some very visceral noises to me, even observing the action at longer range on vacation.

Here's something that won't be news to you – the markets look terrible.

It's not just the fundamental information that most of the 'regular' equity analysts have been filling you full of on every media outlet around: There's the lowering of expectations on earnings, not just the disappointments of 2nd quarter results (which were uninspiring). It's not just the continued bad indications from the emerging markets, whose growth rates continue to be guided downward. It's not the continuing bleat of 'taper talk' which (for those who believe this has been a totally fed-inspired rally) would be a total death knell for stocks.

You don't need me to point out any of this. But here's what I see. There's a stock market that continues to ride the lower edges of some usually reliable technical indicators, like the RSI and Stochastic, usually a good sign for a technical rally. There's a market that's felt extended but now looks more like it's really rolling over, and not for any short-term of a few sessions or weeks, as we had earlier this year. We've got a bond market that may be even worse than equities, and is riding out into the sunset on a wave of panic, with very few analysts interested in buying. And we've got a pick-up in some of the most 'left-for-dead' commodities that were never supposed to come back, including copper and natural gas, up above $3.50/mcf again.

The Fed

Believe it or not, I get tired of harping about the same bozos making up the same criminal conspiracy, day after day, week after week, but I am afforded no alternative.

It is akin to the discovery that the reason that the pool is losing water is because someone pulled the plug. Here I am, suggesting that the plug be replaced, day after day, week after week. It is obvious that most folks don't care whether to pool has any water or not.

I suspect that a whole lot of them think: "if we run out of water, we can use gatorade to irrigate the crops. Shades of Idiocracy. Unfortunately, it is the economic crops of the world that are being put at risk. And the members of the Federal Reserve have been, and are currently continuing to "pour gatorade on the economic crops to keep them growing. Clueless, criminal morons who need to be, collectively, put out of our misery.

James Howard Kunstler, one again, fingers the pulse of the debacle in his current installment of Clusterfuck Nation.

From James Howard Kunstler:

How then did Ben Bernanke finally summon the fortitude to entertain tapering Federal Reserve bond purchases from $85 billion a month to, say, $84.7 billion a month come September 18th, the world may never know, but now the deed appears to be done, in his absence, by remote paranormal transmission, while the other Fed board members, with their attendant economist factotums, servelings, and catamites all beamed the message out of horsey Jackson Hole that they expected — even pined for — the vaunted return to "a normal economy." Which left many bystanders wondering if that meant a Dow Jones industrial average at, say 3,847 around Columbus Day, the 10-year bond at 5 percent, and every pension fund in world bleeding out from a sucking chest wound — not to mention a Hindenberg-like conflagration of the US Treasury as debt payments went beyond critical.

Pardon me for saying that I don't think these mooks of finance know what they've been paying for with the QE series of monkeyshines. They've been creating "money" for five years to offset the collapse of a no-longer-cheap-oil economy. It's really that simple. If any of these poobahs thinks they can run a "normal economy" at $106-a-barrel then they should run out and get a realtor's license and buy as many Arizona REO's as the foundering banks will admit to holding on their books, and then become landlord to renters working 29 hours a week on the WalMart loading dock.

Actually, I don't think they will have to wait that long to see the consequences of their loose, silly talk. America's major export is now working its hoodoo in many other parts of the world as currencies become unglued and economies look down at the flimsy bamboo scaffolding that holds them up so high. America's major export these days is economic uncertainty, specifically the question of what, exactly, will maintain the pretense that the hopelessly intertwined financial affairs of China, India, Brazil, Japan, Euroland, Russia, and everybody else, really, including ourselves, are not unraveling like some kind of cosmic sweater knitted with one needle by a cross-eyed god with the jim-jams.

Financial Survival

As we have explored, over and over in our editorial offering here on the Silver Bear Cafe, "We are not being shepherded by altruistic wise men, but, rather, herded by megalomaniacal desperadoes."

There are countless instances where we have exhibited irrefutable proof that solutions to all kinds of problems had been developed but were being withheld from the population as a result of corruption and greed.

Take, for instance, recently posted information pertaining to vehicles that achieved over 150 MPG that have been made illegal to import into the US. In at least one case, the cars were being manufactured in North Carolina and exported to South America and Europe. All because the use of less gas would mean the sale of less gas. Duh. And the sale of less gas would mean smaller profits for Big Oil as well as reduced tax revenue for Washington.

In the following missive, from Jon Rappoport, we are reminded of the enormous amount of money that is channelled to the Cancer Industry. As sick as it may seem, the elimination of Cancer would have a very detrimental effect on many large donors to political PACs. You can't make this shit up.

From Jon Rappoport:

In the 1990s, I watched a federal trial in a Los Angeles courtroom. The defendant was charged with selling medical drugs without a license to practice medicine.

The defendant was prepared to argue that a) the substance he was selling was naturally produced in the body and b) it was effective.

The prosecution moved to exclude such testimony, on the grounds that it was irrelevant.

The judge agreed. Therefore, the trial was nasty, brutish, and short. The defendant was found guilty and sentenced to prison for several years.

This is how the federal bureaucracy operates. "Do you have a government-issued license to heal? No? You're a criminal."

I believe that if Jesus of Nazareth were walking the Earth today, in the United States, he would be arrested on the same grounds.

This would be particularly so if he were curing cancer.

Jesus wouldn't be granted a license. No license? Guilty.

More importantly, the trillion-dollar cancer industry survives and makes its money by treating cancer, so curing it would be a major threat.

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.