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 misinformation which spews continually from the sources of the government's statistical revision, has attempted to lead us to believe that some kind of an economic recovery was in progress. Pure tripe. The recent news of a modest taper, by the Federal Reserve, was also more tripe, piled higher and deeper.

While the Federal Reserve is busy screwing up the economies of, not just the U.S., but also most of the rest of the world, those behind the scenes, pulling the White House strings, are busy pushing America into Wotld War III.

We are currently witnessing a large faction (thousands) of al qaeda mercenaries, posing as Syrian rebels, in the employ of the Saudi and Yemen Royal Families, attempting to overthrow the Syrian Government. We are told that the problem is one of a "humanitarian nature". More tripe. The purpose of this grossly misreported exercise is simply another lunge for wealth and power. At stake is a potential delivery system for the European Natural Gas Markets.

The inability of the Obama Administration to invade Syria and aid in the regeim change in Syria has already pissed off the Saudi Royals who are threatening to abandon the perto dollar system. If this happens, and it probably will, it will certainly cause a massive dissolution in the purchasing power of American Federal Reserve Notes in the U.S. which will, in turn, cause the price of everything to rise and the standard of most American's lives to fall precipitously.

2014 will be the year that the petro dollar system is finally rejected by the rest of the world, which will result in the repatriation of trillions of FRNs arriving on our shores.

At this time next year, this year's retail season's train wreck will have become a fond memory of those assessing the state of the economy at that point. If the petro dollar system is replaced by any other system during 2014, by this time next year alot of Americans will no longer be able to afford to shop at Walmart.

From Tyler Durden (click for the entire piece):

That it has been one of the most lackluster shopping seasons in recent years has already been repeatedly covered, with average holiday spending expected to decline for the first time since the Great Financial Crisis of 2008, all this despite record promotions and an ever earlier start to Black Friday.

Another chart showing the same trend from Bloomberg, with the comment that the "eroding middle class can no longer drive activity as it has in the past" - that's odd: we said the same thing in late 2009 for which we got yet another label of tinfoil conspiracy theorists...

However, while the early start to shopping season has missed expectations, driven primarily by an unprecedented weakness in traditional bricks and mortar outlets, there was some hope that the last stretch into Christmas and the New Year would provide a much needed, last minute bump. Those hopes were dashed last night when Shopptertrack reported that retail traffic plummeted by an unprecedented 21% last week, and in-store sales decreased 3.1% from the year before, dashing retailers' hopes that the final stretch before Christmas would offset soft sales numbers earlier in the holiday shopping season.

On the Economic War Front

With the Christmas buying season behind us, and the resulting sales numbers dismal, we now have the stock market on the verge of collapse to look forward to. Millions of Americans are about to have their food stamps cut off. Global Warming adherents wind up getting stuck in the ice in Antarctica as unusually fierce winter storms pummel folks in the Northern Hemisphere all around the world. It may turn out that the global warming hysteria was a ruse that was incited to allow Al an inconvenient truth Gore to get legislation passed that would allow his company to reap $billions through the the sale of "carbon tax credits".

It seems like the shine is fading off the world wide propaganda machine as we realize the dire state of the economy, not only in the U.S., but everywhere else that has been subjected to the scourge of central banking. Instead of a recovery that has been so loudly heralded by our current administration, our economy is spiraling downward at an ever increasing pace.

In my latest rant: All the King's Horses and All the King's Men, part two, Getting Out from Under the Bus, I attempt to point out how close to catastrophe that we are as a species. Very few people seem to care.

As we embark on 2014 we should all be a bit more wary. Be careful who you listen to. Always keep in mind what is a stake, and how far your enemies will go to take what you have, in order to survive.

From Jim Willie (click for the entire piece):

The year 2013 will go down in history as the year of great transition, tremendous disruption, numerous financial breakdowns, widely adopted hyper monetary inflation, exposure of hidden devices, panorama of popular awakening, and indisputable evidence of a systemic failure. The following titles of significant events, organized by topical theme, are mindboggling and comprehensive so as to attest to the global failures. The breakdown touches almost every part of global life. The American Fascist Business Model has wrecked anything and everything, the fish rotting from the head (leaders) down to the toes (ethics). No effort whatsoever has been made by leading nations and major central banks to construct a bonafide remedy to the widespread insolvency and powerful economic recession. Instead, the priority has clearly been to maintain the power structure and avoid at all costs (literally in the $trillions) any liquidation of the big Western banks. No liquidation has occurred, which would serve as the foremost and initial step toward a solution.

Consequently, the entire global financial system hurtles toward failure, which has been the quintessential Hat Trick Letter forecast since the year 2007, when numerous failure signals flashed red. The QE bond monetization by the USFed, joined by the other major central banks, has been adopted as permanent, just as the Jackass forecasted in 2010. The ZIRP zero bound rate has been adopted as permanent also, just as the Jackass forecasted in 2009. The consensus continues the totally incorrect viewpoint of monetary accommodation being stimulus, when it instead is killing capital and destroying the economy.

Precious Metals

If you have been paying the least bit of attention to the underlying theme of my rants you would also realize that I consider the "Dark Side" to be made up of institutional wealth in the hands of multinational corporations, the various banking cartels, and "Old Money" elitists that were not responsible for creating the wealth but rather are simply endowed with the ability to wield the power that comes with such wealth. These factions are, IMO, grossly abusing their powers and, as a result, selling out America. They are disrupting the course of natural evolution.

For instance, the natural process of food production has been altered through the genetic manipulation of seeds. This process renders the seeds with unnatural characteristics. This is primarily done, not to improve the various strains, but rather to enable the manipulators to patent the strains and control them in the market place for profit. The same thing is occurring in the pharmaceutical industries where known herbal remedies, which are free to all, are genetically altered, in order to sell them. The consequences of these alterations on the human body are dismissed as superfluous and unimportant.

The profit motive pervades every action of the "Dark Side." Don't get me wrong. I am as much of a capitalist as any good, patriotic American should be. I do not believe, however, that my profit should come from the detriment and suffering of others. Altruism plays no part in the "Dark Side's" agenda. World domination through economic control is their goal.

The technology of the "Dark Side" owned media has reached the point where it has achieved the power of creating realities for the people that are distorted and unnatural. As corporations merge, so that they control more and more of the technology and want to use more advertising to create false needs, the costs of basic human survival will continue to escalate.

Most imperative is the "Dark Side's" obsession with increasing government power and surveillance. Citing a need to combat drug dealers and terrorists, the government has infringed more and more on the liberties of the citizen. Through Patriot Acts I & II, the Bill of Rights has been effectively dismantled. Get ready for Patriot Act III. Cash transactions are being restricted and the Internet fully monitored. The next step will be forcing the move to a cashless society, controlled by a central authority. All we need is electronic credit money, devoid of all checks and balances, and a system by which we can all be tracked on a 24/7 basis, cradle to grave, and the central banker conspiracy will be complete. This growth toward a central, spiritless governmental authority in a high tech, virtual world, divorced from natural processes, where food, water, and the routines of living have been commoditized and distorted, marks the beginning of the end, of the world as we know it, for everyone.

Which brings me to the topic of precious metals. Who among us believes that, along with all the other economic malfeasance, the price of precious metals has not been manipulated? The evidence is staggering, but the motives of the manipulators have not been exposed cohesively enough for "Joe Six Pack" to understand. "Joe" still rolls his eyes back and wonders why anyone would consider the possibility that there are forces, behind the scenes, controlling high levels of government in our country that are not working in "We the People's" best interest.

From Claudio Grass (click for the entire piece):

The last year has been an interesting year in many respects, especially for precious metals. We saw strange fluctuations in the gold price, mainly because of the paper market, and also "creative" ideas by governments on how to control their citizens and their wealth. It seems that on a daily basis more and more is uncovered on how the US is spying on its citizens through the NSA. Also FATCA, which will be implemented shortly, will make all financial assets of US persons transparent to the IRS. What about: Privacy? Democracy? And above all: Liberty? Sadly, we think that these principles have been thrown overboard and it is unlikely that the infringements of natural rights will end any time soon.

A few weeks ago, while having dinner in Zurich I had a conversation with a conservative Swiss Banker, working for one of the oldest private banks in Switzerland. When I told him what we do at Global Gold he said: "So you work with the real stuff – dealing with real money!". He went on to tell me that he holds physical gold as his own personal insurance. His remarks highlight the most important aspect why someone should hold physical precious metals. Gold is not a speculative vehicle, but rather an insurance policy against the collapse of the financial and monetary system. Neither my clients nor I know exactly when the collapse will take place, however we are all convinced that it is long overdue and will happen eventually due to the unsustainability of the current system. What has changed since the price decrease of more than 700 USD since the peak in 2011? Absolutely nothing!

J.P. Morgan once said: "Gold is money – everything else is credit". Although I don't share a lot in common with the Morgans, I fully agree with this quote. What most people consider money today is nothing more than debt! I am critic of un-backed currencies in general, a credit-based monetary system is, however, much more dangerous than "simply" having an un-backed currency. A backed currency, such as a gold standard, restricts the powers that be from issuing new currency whenever they need it. Our credit or debt-based system however implies that no matter what happens, the money supply has to be constantly increased, because as everyone knows debts need to be repaid with interest. Assuming a constant velocity of money over time, there is no way the debt, which is the basis of our money, can be repaid if the money supply is not increased. The system is, therefore, inflationary in its root and is bound to fail in the long run. As Voltaire already noted: "Paper money eventually returns to its intrinsic value – zero." The only question is not if but rather when.

 

Energy

The editorial slant of the Silver Bear Cafe has always attempted to champion and defend the rights and liberties of the American Middle Class. There is an economic war being waged against us and we thought that bringing attention to that fact might help people cope with the tyranny.

From the onset of this endeavor, we have constantly tried to formulate 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 successfully dumbed down and, as a result, switched off. The switching off part eliminates the capacity for critical thought, which, to coin a phrase, "makes resistance futile".

It turns out I have only been addressing a small portion of a group that 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 from Byron King exhibits a optomistic take on the state of energy production. Consequently we have a much greater concen over the "petro- dollar system failure". Although, from an energy independence standpoint the future may look bright, from a hyper-inlation standpoint we may be peering into the abyss.

From Byron King (click for the entire piece):

Good news keeps rolling in for America's booming shale plays.

This week, the U.S. Energy Information Administration (EIA) released a report describing how the Marcellus Shale region is on track to supply 18% of total U.S. natural gas production in December.

Basically, more and more "takeaway capacity" has come online in the past year. This is despite a flat rig count, according to data from Baker Hughes. In other words, the same number of rigs are drilling more wells. That comes with improved learning curves and better efficiencies based on experience in the field.

As things stand, Marcellus gas output exceeded 13 billion cubic feet per day (bcf/d) in November and will top 14 bcf/d in December. Based on wells already drilled and ready to tie into the distribution grid, expect to see over 400 million cubic feet per day (mmcf/d) of additional "new" gas coming online from December to January.

What's the secret? First, it helps to have reasonable government policy. Overall, the state and (most) local governments in Pennsylvania, West Virginia and Ohio have been open to shale energy development — unlike in New York, where the legislature has imposed a moratorium in order to "study" the issue. (Study it to death, I suspect.)

Thus, with a fair set of rules and regs, more and more PA-WV-OH operators have leased land and drilled wells, gaining valuable experience and delivering hydrocarbons.

Now we're several years into the play. We've reached the point where output from new wells is growing fast. In terms of engineering and well building, operators are drilling longer wells — called "laterals" — and adding more down-hole production sections, called "frack stages." This is delivering more output from more stages, in longer wells.

The Fed

What has happened since the onset of the Federal Reserve in 1913 can only be considered an insanely greedy exhibition of deluded, out of control and self absorbed mental midgets flooding the world with worthless paper in order to collect usurious, unearned and undeserved interest on fake debt by maniacs who should rightly be put to sleep. This has caused, and continues to cause the death and devastation of thousands upon thousands of innocents, all over the world, just to keep the sytem afloat.

The ongoing overt and obvious dissolution of the purchasing power of FRN's has become glaringly apparent to all but our blindered sheeple, and several oil-producing countries have begun to question the wisdom of accepting increasingly worthless paper for their precious resources. Iraq, Iran, Syria, Venezuela and Libya have openly voiced their destain at having to receive FRNs for their petrochemical exports. China, Russia, India, North Korea and Cuba, are complaining about having to pay in FRNs. When Iraq threatened to accept Euros for their oil, the U.S. Government, working at the behest of the banksters, killed Saddam Hussein. When Libya attempted to trade its oil for gold Dinars they killed Muammar Gaddafi, The CIA tried several time to assassinate Hugo Chavez of Venezuela, but he died of cancer before they could get to him. Obama tried his best to help Saudi Arabia take out Bashar al-Assad of Syria but, so far Putin has out foxed the White House at every turn. "Obama's best" might be an oximoron. What is happening in our world today makes a whole lot more sense, albiet in a sick kind of way, if you simply read between the lines and ignore the "official" reasons that are provided by the mainstream media.

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

From Peter Schiff (click for the entire piece):

The press has framed Ben Bernanke's valedictory press conference last week in heroic terms. It's as if a veteran quarterback engineered a stunning come-from-behind drive in his final game, and graciously bowed out of the game with the ball sitting on the opponent's one-yard line. In reality, Bernanke has merely completed a five-yard pass from his own end zone, and has left Janet Yellen to come off the bench down by three touchdowns, with no credible deep threats, and very little time left on the clock.

The praise heaped on Bernanke's swan song stems from the Fed's success in initiating the long-anticipated (and highly feared) tapering campaign without sparking widespread anxiety. So deftly did the outgoing chairman thread the needle that the market actually powered to fresh all-time highs on the news.

There can be little doubt that the Fed's announcement was an achievement in rhetorical audacity. In essence, they told us that they would be tightening monetary policy by loosening monetary policy. Surprisingly, the markets swallowed it. I believe the Fed was forced into this exercise in rabbit-pulling because it understood far better than Wall Street cheerleaders that the economy, despite the soaring gains in stocks and real estate, remains dependent on continued stimulus. In my opinion, the seemingly positive economic signs of the past few months are simply the statistical signature of QE itself. Even Friday's upward revision to third-quarter GDP resulted largely from gains in consumer spending on gasoline and medical bills. Another major driver was increased business inventories fueled perhaps by expectations that QE supplied cheap credit (and the wealth effect of rising asset prices) will continue to encourage consumer spending.

Financial Survival

I believe that the powers that be have employed their ability to invent money by using its corrupting influence to cataclysmically screw things up. They have, with the help of their bought and paid for acompli, screwed it up so bad that it won't be easily fixed. I have always believed their plan was to casually strip up of all our liberties before they pissed us off. They have been doing a pretty good job of stripping us of or freedoms and liberties for years, and no one seems to have minded very much. After all, they successfully debased our currency and pocketed the difference, entwined us in a mire of disputes all over the globe and managed to get the whole world pissed off at us, strapped us with untenable debt that will eventually enslave our offspring, dismantled the Bill of Rights through Patriot Acts One, Two, and soon to be Three, are currently scheming to rob us of our retirement by hijacking social security, and still we re-elect them. Apparently, they haven't pissed us off enough for anyone to do anything about it.

Given the pandemic apathy, that addles the collective mindset of our nation, there is not much hope for a political solution. By the time the sheeple wake up and attempt to politically change things, it will be far to late. We are witnessing the decent of the Phoenix, and she's going down in flames. I also believe that the Phoenix will rise from the flames and soar to new heights. Unfortunately I do not believe it will be anytime soon, and when it does, it will be under far different circumstances.

What can you do? Open your eyes. Identify, for yourself, the signs of the tyrannies of collectivism. The easiest way to identify a collectivist is to observe how he proposes to help those in need. If he advocates true charity (the giving of one's own money) and freedom-of-choice to give or not to give, he is an individualist. If he advocates pseudo charity (the giving of other people's money) and the use of taxation to coerce everyone to participate whether they choose to or not, he is a collectivist. The use of coercion for redistribution of wealth is the foundation of socialism, communism, Nazism, fascism, and all other variants of collectivism.

Protect yourself. Get ready now. Sell everything you don't need. Accumulate gold and silver, (most especially silver). Invest in gold and silver mining issues. The day is soon coming when the people demand that precious metals regain their place in a Constitutionally sound economic system. Prepare to defend your Constitution, yourself and those you love. Follow the course opposite to custom and you will almost always do well...

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.

From Jeff Berwick (click for the entire piece):

The world is changing — dramatically! Paradigm shifts are happening everywhere. We are reaching the culmination of The End Of The Monetary System As We Know It (TEOTMSAWKI).

It won't all happen at once. There will not be a certain day or time when it is announced by the media that all of the government and central bank constructs built up over the last century have collapsed. It will happen as it has been happening, with more and more things falling apart, day by day.

The year around 2000 may be looked back upon as near the beginning of the end of today's systems. Think back to the year 2000 and think what you would have thought if someone told you that the Nasdaq would nose dive 78% within two years. That for the first time in history two skyscrapers would collapse at freefall speed into their own footprint due to fire. That this would lead to the US attacking and occupying Afghanistan and Iraq. That the lead "economist" of the New York Times would call for money printing to blow another bubble in real estate after the tech bubble collapse and would get it (that one isn´t that surprising). That the subsequent housing bubble would destroy trillions in wealth and cause a near collapse of the global financial system, one in which George Soros said that the financial system did collapse in 2009 but is now only being kept temporarily alive by money printing. That the US government debt would triple in the next 12 years, that deficits would rise from a technical surplus in 2000 to more than a trillion dollars per year a few years later. That, under Generally Accepted Accounting Principles (GAAP) accounting, deficits would be over $5 trillion per year within a decade. That a half-black man with no known personal history would be president of the US within eight years and would institute a fascist-style nationalized medical care system. That Greece would collapse. That the Cypriot government would abscond with nearly half of bank depositor's money in broad daylight

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 exclusively 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 are absolutely sure of that is absolutely 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.