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

Our Government has become morally bankrupt. This is not simply a reaction to the agendas of our current, pitiful administration, but the culmination of efforts intentionally contributed to by the past five administrations. The easiest way to recognize the moral failing of government is to examine its criminal justice system. Criminal law is legislated morality: certain acts are so vile, we exile the perpetrators to prison. Consequently, in our current situation, the criminals have over-ridden morality with amorality. The vast majority of the members of the Federal Government have "rolled over" and are absolutely culpable for the state of the American economy as a result of their unwillingness to regulate the Federal Reserve and Wall Street. After all, the Federal Reserve invents the currency (only gold and silver are money) to pay for the salaries and the pork of the less than worthless criminal deadbeats that occupy the White House, the criminal deadbeats that occupy both houses of Congress, the criminal deadbeats that occupy the Supreme Court and the criminal minions employed by the criminal alphabet soup agencies. The leadership (CEOs, CFOs) of the big banks are absolutely culpable for the state of the global economy. After raping the American taxpayer, they moved on to the Sovereign States of Europe (Portugal, Italy, Greece, Spain, Ireland and, almost Iceland). The Cyprus debacle is only the latest indication of where this is headed.This contagion will soon destroy the economy of a country near you. So many assholes, so few lamp posts.

From Matthias Chang:

I challenge anyone to prove me wrong that confiscation of bank deposits is legalized daylight robbery

Bank depositors in the UK and USA may think that their bank deposits would not be confiscated as they are insured and no government would dare embark on such a drastic action to bail out insolvent banks.

Before I explain why confiscation of bank deposits in the UK and US is a certainty and absolutely legal, I need all readers of this article to do the following:

Ask your local police, sheriffs, lawyers, judges the following questions:

1) If I place my money with a lawyer as a stake-holder and he uses the money without my consent, has the lawyer committed a crime?

2) If I store a bushel of wheat or cotton in a warehouse and the owner of the warehouse sold my wheat/cotton without my consent or authority, has the warehouse owner committed a crime?

3) If I place monies with my broker (stock or commodity) and the broker uses my monies for other purposes and or contrary to my instructions, has the broker committed a crime?

I am confident that the answer to the above questions is a Yes!

However, for the purposes of this article, I would like to first highlight the situation of the deposit / storage of wheat with a warehouse owner in relation to the deposit of money / storage with a banker.

On the Economic War Front

Of all the great inventions and discoveries of mankind, nothing has stood out with greater potential benefit to the whole of humanity than Nikola Tesla's discovery of wireless power transfer in 1889. Funding for his research had come from J.P. Morgan who stopped the funding when he realized there was nowhere to put a meter. By 1931, Tesla had perfected a receiver for Dark Energy which he defined as "a mysterious radiation, which comes out of the aether". Supported by the Pierce-Arrow Co. and Westinghouse, he took the gasoline engine from a new Pierce-Arrow and replaced it with an 80-horsepower alternating-current electric motor with no external power source. Tesla's "Dark Energy" receiver powered the car for five days, driving at speed of up to ninety miles per hour. George Westinghouse reacted the same as had J.P. Morgan when he found out that he couldn't meter the energy. If he couldn't sell it, he didn't want the technology "to ever see the light of day". As a result of the obstruction of provision of the wireless transmission of power, humanity has been bereft of the technology that would have allowed for the dismissal of fossil fuels, and all the pollution that accompanies it, with technology developed over 117 years ago. Had it been allowed to be developed, everyone's standard of life, on the entire planet, would be exponentially better.

The economic war that is being waged on us, by the Darkside, is steeped in death and destruction rathar than peace and prosperity. These bozos are just powermongers who haven't the vision, or even the capacity, to guide our collective evolution to greater heights.

"Those who are too smart to engage in politics are punished by being governed by those who are dumber." (ascribed to Plato)

From Catherine Austin Fitts:

The vast majority of the people lobbying the federal government are focused on what is in the specific interest of those who are paying their way, as opposed to what makes the pie bigger for everyone. Unfortunately, those lobbyists and the interests they serve have become our elected officials' real "constituency".

Consequently, we find few in government or elsewhere whose primary focus and concern is the overall economic health of the domestic economy or the welfare of those they have been entrusted to represent.

The implication is that the American people are slobs who are irresponsible and wrecked the place while the leaders who ran the country were helpless to do a thing about it.

Let's set the record straight:

If energy technology had not been suppressed for the past 100 years, our energy costs would be a pittance compared to what they are now, and our savings would be much higher.

If countless medical discoveries had not been suppressed, we would not be looking at such ridiculous costs for health insurance, Medicare and Medicaid.

If government had produced proper financial statements as required by law and had also produced such disclosure contiguous to Congressional districts, the housing bubble and a lot of other bubbles could never have happened.

If the currency and monetary systems had been run in the manner envisioned by the founding fathers rather than by private bankers, we would not have any debt.

If the American media and government had communicated honestly about our problems for the past few decades, we would not be in this pickle.

If wasteful defense spending and disappearing money had not defined the Pentagon for quite some time, things would look very different.

I once had a wonderful employee when I was the Assistant Secretary of Housing. He told me that the way to clean up a big mortgage mess was to view the problem as the solution. He said, "In the destruction of the old, let there be the creation of the new."

America does not have a debt problem. We have a political problem. We have created a system where secret governments can steal and have Congress, the U.S. Treasury, and the Federal Reserve replace whatever they stole. The theory is that the end of the world will come unless we bail them out. That is not true, for all the reasons you learned in kindergarten about letting bullies have their way.

Precious Metals

During the first half of the 20th century, each of four world leaders did the exact same thing within ninety days of their ascension to power. Each made it illegal for the citizens of their respective countries to own gold. Those leaders were: Mao, Stalin, Hitler, and Franklin D. Roosevelt. All four were acutely aware of the restrictions that a gold standard imposed on their abilities to wage war.

The bankers hate gold as money for the same reason. Gold as money acts as a barrier to the expansion of credit money. By pandering the lure of unlimited credit, the banksters went about recruiting politicians through out the world. The opportunity to wage war on borrowed money turned out to be irresistible to Empire. Wars have always been very important to the banking cartels. They are very expensive. Time and time again, through loans to governments, the cartels have provided the funding for great conflicts. Imagine, being able to go to war with unlimited funds. Better yet, imagine the inability to go to war because of the lack of unlimited funds. The temptation extended to the power mongers was too great. The credit was made available with a single catch. The gist of the pitch went something like this:

"Sure we'll loan you all the money you want, on the condition that you enact laws making all the citizens of your individual countries responsible for the interest payments, through taxation"

One by one the leaders of every government on earth sold out, and agreed to demonetize gold, thereby allowing the continued power grab of the banking cartels through the issuance debt based currency. The result has been the methodical fleecing of the general population through the debasing of the dollar by 98%.

Now, through the orchestrated collusion between the government, the Federal Reserve and Wall Street, the price of precious metal is criminally manipulated and suppressed in order to provide the illusion (smoke and mirrors) that the US Dollar is strong and its role as the world's reserve currency should be continued.

From Roxanne Lewis:

Gold bugs are quite simply “bugged” by the recent drop in the price of gold and silver!  Hopefully none of you capitulated and started selling.  If you did you will soon realize that you were hood winked.  You see the value of gold and silver has not dropped, only the price of the shiny metals.  This is a buying opportunity to get in for anyone who hasn't’ already started to collect metals for protection.  You see the ultimate movement, by the world’s nations, out of dollars has begun all around the globe.  The trickle is becoming a stream and will ultimately churn into a torrential river overflowing its banks.  Ultimately, the U.S. dollar's exchange value will plummet.  Prices on imports will go up as too many dollars chase too few goods. Our domestic inflation will go into the stratosphere and destroy the Federal Reserve's control over interest rates.  So what has the ultimate deception been the past few years?   One could assume that the Federal Reserve has been shorting gold and silver in the paper bullion market in order to protect its policy of Quantitative Easing policy.
 
Yes, I agree that gold prices saw their biggest drop in 30 years.  The odds are 20 trillion to one that an occurrence of this magnitude could have happened.  Yet it did!   Now are you thinking conspiracy and manipulation?   The actual price of gold (value) is quite simply significantly higher than the gold price reported by the COMEX.  Has anyone noticed that the real demand for gold around the globe is enormous and shows no signs of slowing?

Those evil stock traders who are shorting COMEX contracts have seen the response of the engineered fall in the gold price and must be considering there mindset for being short on the obligation to deliver gold that is in high demand all over the world.  I see central banks from all around the world, from Korea to Australia, see this as an opportunity to stack and you should too!  I find it tremendously puzzling why our western banks don’t recognize the opportunity as well and get on board.  Do you think they do but they just aren’t saying it or “doth protest too much” and are buying it too under the guise of disguise?  What would happen?  Would they be exposed if we all pulled our worthless dollars out of our bank accounts, 401k’s, Roth’s, mutual funds and other nonsense?  It would feasibly sink their propped up house of cards “hologram” stock market. 

Makes you wonder doesn’t it? ‘Cui bono’ who has the most to gain?  A Latin term which means “To who’s advantage or benefit”?  You see, the likely party to gain from this act is the Federal Reserve’s owners, the power elite .001%.    Didn’t “Dumb berg” (Bloomberg) say, “The drop in gold prices have handed central bankers more reasons to pursue the easy monetary policy that helped drive up gold’s prices in the first place.” I have said it before but I will say it again, Bernanke will never stop printing dollars in a fatal attempt to jump start the economy -- and now he has the ammunition to continue!!

Energy

Battery technologies, along with all other forms of energy storage, currently provide the greatest single stumbling block to the successful application and implementation of alternative energies. In the Energy Forum of the Silver Bear Cafe, we have explored many breakthroughs over the past eleven years. The past couple of weeks has provided the introduction of "Flywheel Energy" as well as various alternatives to Lithium Ion.

From Robert Rapier:

Perhaps the biggest shortcoming of solar and wind power is their intermittency. In locations like Hawaii, where I live, wind and solar power are already competitive on price. My fossil-fuel supplied electricity typically costs above 40 cents a kilowatt-hour, and wind and solar power can compete with that. But since they can't supply power that is available on demand (firm power) they must be backed up by power sources that can provide power when the sun isn't shining and the wind isn't blowing.

This scenario could change dramatically if cost-effective energy storage solutions were developed. I consider this to be the most important unresolved problem in the energy business. A company that develops a way to efficiently and economically store intermittent energy for on-demand use will be a game-changer.

The ideal power storage solution would be able to store energy densely, at a reasonable capital cost, and would be able to return that power at high efficiency. For instance, if we put 1 unit of power into the storage system and we actually got 1 unit back out when we needed it, the system would be 100% efficient. Real-life efficiencies will be less than 100%, but the higher the efficiency, the more desirable the storage option.

The Fed

The U.S. economic and systemic-solvency crises of the last five years continue to deteriorate. Yet they remain just the precursors to the coming Great Collapse: a hyperinflationary great depression. The unfolding circumstance will encompass a complete loss in the purchasing power of the U.S. dollar; a collapse in the normal stream of U.S. commercial and economic activity; a collapse in the U.S. financial system, as we know it; and a likely realignment of the U.S. political environment. Outside timing on the hyperinflation remains 2014, but events of the last year have accelerated the movement towards this ultimate dollar catastrophe. Following Mr. Bernanke's extraordinary efforts to debase the U.S. currency in late-2010, the dollar had lost its traditional safe-haven status by early-2011. Whatever global confidence had remained behind the U.S dollar was lost in July and August. That was in response to the lack of political will—shown by those who control the White House and Congress—to address the long-range insolvency of the U.S. government, and as a result of the later credit-rating downgrade to U.S. Treasury debt.)

From Toby Connor:

I've been pointing out for several months now that the recent rally in the dollar was a mirage, an illusion generated by the yen, euro, pound, and Canadian dollar all dropping into yearly, or intermediate cycle lows together. This selling pressure in the four major currencies that make up the dollar index spawned what looked like a strong dollar.

With Bernanke printing 85 billion of them a month, there is no such thing as a "strong dollar". I've been saying for months that once these four currencies completed their bottoming cluster it would be the dollar's turn to crash. The recent collapse in the yen was 23%. The Pound 9%. I think the dollar will be somewhere in between with a loss of 9-12% as it drops down into its yearly cycle low.

As this process starts to accelerate over the next couple of months the dollar bulls are going to get a rude awakening, as our currency shows its true colors. The acceleration began today as the dollar has now completed a lower low and a lower high.

Financial Survival

It became so apparent, to your editor, years ago, when a domestic law-enforcement arm of the U.S. military (referred to by The Army Times as the "Consequence Management Response Force") was created, to deal with, what U.S. officials believe to be, a coming unprecedented wave of massive social chaos, that a revolution was imminent. The only two good things that came out of the War of Northern Aggression was the Interstate Commerce Act of 1887 (which precluded states from taxing interstate commerce), and the Posse Comitatus act of 1878 which was meant to insure that no maniac would ever again be able to sic the American Armed Forces on American citizens. That act, by the way, was done away with by Bozo Bush , the younger...

Many Washington insiders (including officials directly involved in homeland security) are personally making emergency preparations for social chaos. In addition, former Treasury Secretary Hank Paulson told Sen. James Inhofe and Rep. Brad Sherman that so much financial mayhem lies ahead, U.S. troops will have to impose martial law to deal with social unrest. When the next shoe drops, as is provided for in the following missive, I suspect that the proverbial camels back will be broken. Fasten your seat belts, I'm afraid we are in for a bumpy ride.

From Dennis Miller:

Some people claim that our Social Security system isn't broke. Technically, they're right. The Old Age and Survivors Trust Fund (OASI) currently holds $2.5 trillion in special government Treasuries that can be redeemed at any time – in theory of course. But here's the catch. What happens when the OASI needs those trillions of dollars to pay out benefits? Essentially, the government has to find the money to pay the face value of those Treasuries. So from that standpoint, Social Security is broke. The Treasury IOUs are not backed by any cash surplus, only by faith that the US government will somehow come up with the cash... probably by indebting itself further or by raising taxes.

Social Security was created by the Federal Insurance Contribution Act (FICA) and sold as a government-managed insurance program. We pay "premiums" to the OASI during our working years (actually the government just snatches money from our paychecks), which are supposed to be invested and provide retirement income for the rest of our lives. Our retirement is supposed to come from the income on those investments.

After taxing baby boomers for decades, the OASI is huge. But now that millions of those baby boomers are retiring, it's time for our government to tap into that fund to keep its promises.

The problem is that our government claims it can't – or won't – honor its commitment... no surprise there. In a nutshell, it recklessly spent the money it grabbed from our paychecks... money it was supposedly holding as a custodian. Rather than be honest or have the courage to raise other taxes to support its spending, the politicians stole money from our retirement insurance premiums to pay the bills. If folks in private industry raided their employees' pension funds and spent that money, they would be in jail. Well, if the shoe fits…

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.