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 long time readers are aware, I have been referring to the psychopaths that are hell-bent on destroying the Earth as the Darkside since I started my rants back in 2001. I'm sure that, having been thoroughly moved by George Lucas' Star Wars Saga, the idea of the Force and the Darkside have since permeated the conceptual name tag needs of my consciousness.

The idea of a universal force that we, as humans, can tap into is as old as humanity itself. The Buddhists know it as "the TAO". In China it has been referred to as "CHI". The "Force" works for me, so I will endeavour to explain my feeling using Mr. Lucas' terminology. Consequently, my Christian upbringing provides that I mingle two similar concepts. Those concepts, in this case, deal with the personification of Evil.

In Star Wars, the "good guys" (Jedi Knights) were in constant battle with the Darkside. I suppose the Emperor was the most evil, but Darth Vader stole the show when it came to personifying the Darkside. In my Christian upbringing, I became familiar with the Christian Personification of Evil which, for me at least, was the Anti-Christ. We never got too worked up over the Devil, but the concept of an anti-Christ was an effective means of portraying the antithesis of good.

For me, politicos always figured into the mix. Obviously, my teachings were more likely to single out a religious figure as "evil incarnate". After all, most of the World History Scholars, that I have been fortunate enough to meet, generally agree that the Catholic Church has had the most detrimental effect on humanity of all influences, including everything that Mother Nature has dished out.

The spread of Catholicism probably retarded the social development of peoples, all over the globe, more than any other single influence. Still, up until recently, I have tended to identify present day Antichrists with politicos.

As a result of 911 and the resulting Iraq War, for instance, I viewed Darth Cheney as the anti-Christ. Who, at the time, could have been considered more evil than he? More recently, however, I have decided that it was Hilliary Clinton, rather than Dick Cheney, who was the most evil of all evil ones. Benghazi did not go down well with me, not to mention her sordid past during her residence at the White House. But then, earlier this week, I had an epiphanic moment. It suddenly occurred to me that it was Bill Gates, who's abomination, "Microsoft" is currently rivalling the Catholic Church as the most evil influence on the whole of humanity to date.

The convoluted nature of the Windows Operating System has set the technological progress of the human race back one hundred years. Most people just assume that computers are complicated. They're not. Windows is. If it wasn't for Microsoft, there wouldn't be any such thing as Intel which did, and does continue to, provide the lowest common denominator when it comes to microchips. I have always thought that the "Intel Inside" advertising campaign was very clever. People just assumed that that was a good thing. Go figure.

This week, the German Government realized that Microsoft, in collusion with the NSA, had engineered, in their new operating system, a means to access everything on your computer. Every file, every piece of software, your browsing history, and in certain cases, even the ability to see you through the camera on your computer was now available to government spying. While Bill Gates is out figuring out how to philanthropically depopulate the world, his minions are intent on aiding and abetting the Darkside. Welcome to the anti-Christ club, Billy Boy.

From Martin Armstrong:

I reported that Windows 8 was dangerous. Some wrote to argue I was wrong. I wrote why NASA announced it was dumping Windows 8 and that even Skype should not be used. Microsoft has been criticized for the Prism affair. Now appears that Windows 8 is especially dangerous. The German government warns against Microsoft program because it has the ability to control the hardware and software of the computer. The NSA can enter you computer remotely. Has Microsoft created economic suicide?

Many laptops are now pre-installed with Windows 8 sold or delivered. The new program from Microsoft is not very successful, but is heavily promoted. Even companies that German authorities and the federal government, for example, will gradually work with this operating system. But here there are significant security vulnerabilities.

To warn IT experts before the federal program and refer to it as dangerous. There was a gap in Windows 8, which is a high security risk, reports the time with reference to documents of the Federation. This refers to the so-called Trusted Computing. A technology with about Microsoft may access the hardware and software of the computer operated with Windows 8. And thus the NSA, finally there is a very close cooperation between them ( here ).

In the document in which the IT experts of the Federal warn of the vulnerabilities of Windows 8, it says in part: “Due to the loss of full sovereignty over information technology” would be “the security objectives ‘confidentiality’ and ‘integrity’ no longer would ensure t . use the ‘Trusted Computing’ technique in this form (…) “For this reason was” not acceptable to the federal government and the operators of critical infrastructure. ”

In any laptop, any computer is using Windows 8 a “Aufpasserchip called, trusted computing modules’ (TPM) can be integrated,” warns the cryptographer and security researcher Rüdiger Weis in a conversation with netzpolitik.org :

“Together with the method now implemented by Microsoft within Windows 8 (in particular, secure boot), the user is largely beyond the control of its own hardware and software. It reminds fatal to an electronic ankle bracelet. For example, asked about the network can be approved only if software is running., The end of personal computers and smartphones. It sounds like a dream for runaway intelligence agencies and repressive states. (…)

On the Economic War Front

We have, over and over, discussed the impossible dream which is Social Security. It is, seemingly, a taboo subject for our austere (LOL) group of legislators, who haven't a clue as to how it can be made sustainable, and yet, would rather ignore it than do anything at all. I can understand their position. They and their predecessors, have broken the system beyond repair. it can't be fixed.

In the following missive, from Charles Hugh Smith, we are provided with, even more, evidence of the crumbling foundations and inherent flaws in a system that has been feloniously drained by each and every Congress for the last sixty years.

Their current course of action provides that thousands more persons, each making less than $10,000 a year be included in the payout. These folks contribute nothing to the Social Security fund, and even less to their respective communities.

If you are depending solely on Social Security to get by, and are not actively attempting to secure an alternative means of support and survival, you might just not survive. Of course, it could simply be a part of the depopulation agenda. It's kind of like a very large group of tightrope walkers with no nets...

From Charles Hugh Smith:

The official projections of the SSA Trustees state future SSA costs as a percentage of GDP, but since GDP is constantly being gamed, that is an untrustworthy metric of the system's viability. Since Social Security is paid for by payroll taxes, the only metric that counts is payrolls.

As explained in yesterday's entry, SSA is designed to favor lower-income workers; those earning $10,000 a year or less (38 million workers) contribute relatively modest payroll taxes in comparison to the benefits they qualify for. (These numbers are drawn directly from Social Security Administration payroll data.)

The system's solvency is thus dependent on higher-income wage earners. If wages exposed to SSA payroll taxes don't expand at the same rate as the costs of benefits, the system is on a one-way trip to insolvency.

Let's say the Social Security system starts running large ($100+ billion) deficits. What does this mean? It simply means the U.S. Treasury needs to borrow more money by selling more Treasury bonds, and/or the Federal government has to cut spending on other programs to divert the $100+ billion annually to SSA.

Borrowing another $100 billion annually on top of the $1 trillion the Federal government has been borrowing annually is not a problem as long as the yields on Treasury debt is near-zero. But if interest rates rise (for whatever reason), the government's ability to borrow trillions of dollars is crimped as the cost of the interest on the rapidly rising debt starts chewing into the funding for programs.

As crazy as it sounds, eventually the government could be spending more on interest than on Social Security ($800 billion a year and rising fast). That would require the Treasury to borrow even more just to pay the skyrocketing interest.

That self-reinforcing debt/interest feedback loop has one and only one end state: implosion.

Precious Metals

I was bitten, by the gold bug, back in January of 2001. I am fortunate to have been graced with a few "real good friends", and one of them explained to me, in a manner that I could understand, how the future of freedom and liberty were intertwined with gold and silver.

When I say intertwined, I guess i really mean interdependent. I realize that I, unlike most Americans, am direly concerned with the future of America and am mostly concerned with with the prevalence of freedom and liberty. Come to think about it, I am much more concerned with the prevalence of freedom and liberty than I am with the future of America.

One of my champions, Ron Paul, recently came out with a comment about the importance of private property in a free society. Our right to private property is being challenged constantly. My main concern, on a daily basis, is making sure that I am doing my part to bring to the attention of as many people as I can, the threats we face to our individual freedoms and our rights to life, liberty and pursuit of property. Those freedoms are, in my opinion, our "God given rights", and are currently threatened and under attack. They are being assailed by a few megalomaniacal miscreants who don't have any respect, what-so-ever, for God or his "given rights".

This week, I singled out another great contribution from one of my personal favorites, and most respected commentators, Jim Willie. Jim, the editor of the Golden Jackass website, explains how and why, technically, the precious metals sector is, once again, lighting up. Mr Willie mentions that he is not concerned with legal matters, or politics while arriving at his superb analysis of the PMs arena. Consequently, on that last point, we differ.

The pandemic apathy and complacency, that has gripped our entire nation, has left, at the helm, those who would enslave us. Simply having enough sense and foresight to acquire and accumulate precious metal will not, by itself, be enough to guarantee your freedom and liberty. I would much prefer being free to being rich (although being both might not be so bad). Because, after all, where do you spend money in a gulag?

Please consider Mr. Wille's comments and see if you can't apply some of the premisses he provides, in your personal attempt to secure your financial future and those of your loved ones.

From Jim Willie CB:

Back in November 2003, before the Hat Trick Letter was hatched and launched, a seminal article was written about 25 reasons why Gold will rise. It was updated afterwards, around 2008 with a couple more reasons. Given the extreme situation in the last few months, the entire outlook has changed. The gnarly intractable crisis began in late 2008 when Lehman Brothers failed, Fannie Mae was nationalized, and AIG was given a nationalist prop. In the last several months, the crisis has entered a new elevated level of perma-crisis and constant tension, widely recognized as something more serious, dangerous, and risk-filled.

The key changes that mark a quantum change in the global environment for Money, Banking & Gold are many. Taken collectively, they are truly impressive and mindboggling. The new normal is deep constant crisis without resolution, nor the attempt to resolve anything. The banker power structure refused to endure liquidations. They will forced upon them, consequently. The elevated sense of urgency, greater degree of distress, and higher risk of systemic breakdown are the result of many developments.

The entire world has changed with respect to money, banking, investments, and the rules that govern wealth. The Hat Trick Letter is not concerned about legal matters, nor politics. The newsletter is focused on matters that affect the USDollar, major currencies, sovereign bonds, banking systems, economies, trade, and precious metals. No serious analysis can proceed on Gold & Silver without analysis of the other concepts, since all are integrated.

The following factors are directly relevant as to why the Gold Price will rise to $5000 per ounce, then higher. At the same time, the Silver price will rise multiples higher. The gains for Silver will most likely be a greater multiple than seen on the Gold price rise. The shortage for Silver is astounding and obvious to analysts and experts, except those who work for banks. The shortage for Gold is more subtle, as thousands of tons have been leased illicitly. Therefore the accounting is replete with double counting and outright missing accounts in false reporting. The most egregious ledger item is the USGovt gold reserves, listed as deep storage gold, translated to mean some scattered Barrick Gold ore bodies buried in mountain ranges.

Energy

I believe that, in the future, we will utilize residential fuel cells, not unlike the one featured below. A company called Redox has developed a fuel cell, about the size of a dishwasher, that is currently powered by natural gas and can provide a viable means of exiting the electric power grid. This fuel cell can alternatively be powered by propane or butane and could be utilized in remote areas where natural gas line service was not available.

Here comes the good news, maybe. I am very interested in modern advances in energy production, electricity generation and power storage systems. The Silver Bear Cafe's Energy Forum is frequently concerned with alternative energy. Actually I am a lot more than just interested in "off the grid energy provision. I am obsessed.

Being, admittedly, somewhat of a nut on this subject, I voraciously absorb my capacity, on a daily basis, as to what technologies are in the pipeline. And there is one, in my opinion, that may well hold the promise of a better future, if the maniacs that are currently in charge don't destroy it first.

That bright future might be provided by a concert of technologies. I believe that someday, in the next ten to twenty years, we will have residential systems that, through the application of wind and solar power, we will be enabled to use the electricity generated to hydrolyze water and use hydrogen in the place of natural gas. If you think this idea through, you realize that there will be no electric meters in the future. There are a whole lot of diehard putzs that will have to be dragged away, kicking and screaming, before this dream will be allowed to come to fruition. We must always remain diligent when it comes to identifying our enemies.

From William Pentland:

The promise is this: generate your own electricity with a system nearly impervious to hurricanes, thunderstorms, cyber attacks, derechos, and similar dangers, while simultaneously helping the environment.

"Every business or home should be able to safely generate its own energy," said Warren Citrin, CEO and director of Redox.

"We currently rely upon a vulnerable electrical grid. The best way to decrease that vulnerability is through distributed energy, that is, by making your own energy on-site. We are building systems to do that, with an emphasis on efficiency and affordability. These should be common appliances."

Redox's PowerSERG 2-80, also called "The Cube," connects to your natural gas line and electrochemically converts methane to electricity.

The first generation has a nameplate capacity of 25 kilowatts, which can power a gas station or small grocery store, and is roughly the size of a dishwasher.

The system can run at an 80% efficiency when used to provide both heat and power.

The Fed

Do you ever get the feeling that current events are so strange, that they should be dismissed as unbelievable? That this is all a sick joke and someone with a very twisted sense of humor is putting us on? As George Carlin use to tell us:" Nothing seems to matter, nobody seems to care."

Many of my acquaintances, for instance, remain, to this day, in denial, concerning the events of 911, Waco, Oklahoma City, and Ruby Ridge, just to name a few. Going back even farther, how many folks do you know who have yet to begin to realize the truth about JFK, RFK, Martin Luther King, the Gulf of Tonkin Incident, or the dozens of other conspiracies that have, more or less, been outed. What is wrong with someone who can be shown the film of Building Seven, free falling into its own footprint, on the same day that two giant buildings did the same thing, and not even raise an eyebrow?

In the last few weeks, there has been a bit of a debate over who should replace Ben Shalom Bernanke as the Chairman of the Federal Reserve. Its not a very heated debate as, once again, the bulk of the population does not seem to care. Larry Summers has, apparently, made the short list. Given that the last two Chairmen were complete and total morons when it came to attempting the control of the economy, as was evidenced by the incredible mess that they made, every step of the way, Larry Summers would probably fit right in. If it wasn't for a total lack of regulation, Mr. Summers could be sharing accommodations with Bernie Madoff who, was only incarcerated because he stole money from the wrong people.

Jon Corzine should probably be considered as well. He, apparently, knows the right kind of people to steal from since he got away, with over a $billion, scott free. We could have, also, considered Tony Soprano, but he, unfortunately passed away earlier this summer, in Europe.

In the following article, Mish Shedlock weighs in on our options. Actually they are not our options. We have absolutely nothing to say about it. He does begin with an obvious observation, however. It bears repeating, so I will repeat it.

The only candidate that makes sense is the candidate who will set a target date to end the Fed. Unfortunately, no such candidate is on the short list.

From Mike "Mish" Shedlock:

In Tweedle Dum vs. Tweedle Dee; Does Janet Yellen Have What It Takes? I made the case it did not matter much whether Larry Summers of Janet Yellen was the next Fed chairperson. Here is a recap:

The only candidate that makes sense is the candidate who will set a target date to end the Fed. Unfortunately, no such candidate is on the short list.

The choice is between Tweedle-Dee who rates to slosh money around even more than Bernanke in a futile effort to create jobs, and Tweedle-Dum who will do whatever Wall Street wants.

Practically speaking, is there really a difference? The "Dums" Have It

Last week I thought it was something on the order of 50-50 (Tweedle-Dee heads we lose vs. Tweedle-Dum tails we lose) since both potential nominees are losers.

I now think it's more likely a case of Tweedle-Dum tails we lose, with Larry Summers playing the role of Tweedle-Dum. I changed my 50-50 lose-lose stance to a 65-35 lose-lose stance after reading Obama Focuses on Risk of New Bubble Undermining Broad Recovery.

Yellen has all but guaranteed she will keep the money flowing faster than Bernanke, and coupled with the above warning from Obama about asset bubbles, the odds shift heavily towards Tweedle-Dum as Obama's choice.

Some will be delighted by this, others severely disappointed. But I am here to ease your mind. It does not matter. They will be equally horrendous. The timing may change slightly , but the outcome won't.

Financial Survival

Every week, we seem to hear more and more about the stalled economy, the collapse of the petro dollar (a subject I examined in my recent missive "All the Kings Horses and All the Kings Men") and the continued decline of markets all over the world. We hear the terms Tapering, Currency Wars, Exploding Trade Deficit, and Developing Crisis. What are we to make of all this gloom and doom? Are these reports founded in reality or are they just the squeals and screams of our collective Chicken Littles?

The following examination of our current welfare system, is, perhaps, even more telling than the headlines and might just provide a very accurate gauge by which we can measure the rate of our demise. When a society devolves to the point where the citizens are better off not contributing than contributing, the end of the system is close at hand. The severity of the situation is most apparent when viewing the populace as a whole, and realizing that, as a group, we have been so dumbed down that we could even consider that a system of this nature could have any chance at all of working.

From Michael Snyder:

If you could stay home and relax all day and actually make more money than you do at your current job, would you do it?  That sounds crazy, but this is actually a very real dilemma for millions upon millions of Americans.  According to a shocking new study that was just released by the Cato Institute, people on welfare are actually better off than minimum wage workers in 35 U.S. states.  And in 13 states, those on welfare actually do better than those making $15 an hour. 

So why bother?  It is very difficult to find a job in this economy, especially a good one.  As I mentioned yesterday, seven out of every eight jobs that have been "created" since Barack Obama has been president have been part-time jobs.  Why slave away flipping burgers, stocking shelves for some retail giant or working for some temp agency when you could just sit home and make more money collecting government checks?

According to the Cato Institute, someone in the state of New York that goes on welfare can bring home more in money and benefits than an entry-level school teacher makes in an entire year...

The federal government funds 126 separate programs targeted towards low-income people, 72 of which provide either cash or in-kind benefits to individuals. (The rest fund community-wide programs for low-income neighborhoods, with no direct benefits to individuals.) State and local governments operate more welfare programs. Of course, no individual or family gets benefits from all 72 programs, but many do get aid from a number of them at any point in time.

Today, the Cato institute is releasing a new study looking at the state-by-state value of welfare for a mother with two children. In the Empire State, a family receiving Temporary Assistance for Needy Families, Medicaid, food stamps, WIC, public housing, utility assistance and free commodities (like milk and cheese) would have a package of benefits worth $38,004, the seventh-highest in the nation.

While that might not sound overly generous, remember that welfare benefits aren't taxed, while wages are. So someone in New York would have to earn more than $21 per hour to be better off than they would be on welfare. That's more than the average statewide entry-level salary for a teacher.

If you are going to live off of welfare, the key is to pick the right state.  Not all states offer the same level of benefits.

In some states, you have to make far more than the minimum wage before it pays not to be on welfare.  In fact, there are 12 different states where you actually have to make more than $15 an hour before you start doing better than welfare recipients...

Nationwide, our study found that the wage-equivalent value of benefits for a mother and two children ranged from a high of $60,590 in Hawaii to a low of $11,150 in Idaho. In 33 states and the District of Columbia, welfare pays more than an $8-an-hour job. In 12 states and DC, the welfare package is more generous than a $15-an-hour job.

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.