The Silver Bear Cafe

Beartracks Replay from 02.08.14- There are three faithful friends - an old wife, an old dog, and ready money.

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

As I mentioned last week, I no longer feel that it is prudent or productive to discuss solutions to our economic woes. The problems that we already, or are about to face are no longer solvable. The system has been damaged to such an extent, that it cannot be fixed. The series of events that is responsible for the deterioration, decimation and decay of our economic system has already occurred. The genie, so to speak, cannot be put back in the bottle. Therefore, I think we should focus on strategies that might enable us to adapt and adjust in a manner that will allow the reset to be as painless as possible.

I am afraid that the vast majority of Americans have either been placated by the availability of a government teat to suckle (food stamps, welfare checks, etc.) or belong to a group that has intentionally turned off their individual "radar systems" and have, as a result, become SOP (stupid on purpose). There are none so blind as those who will not see. From those two groups, we should not expect much help.

Now I have to admit that, for many, the bountiful offerings, presented by the remnants of our great Republic, which has flourished from the employ of a capitalistic system, has, in turn, provided ample opportunities for those with ambition, to achieve and maintain a level of comfort. That life style has been the envy of the world. Consequently, as a result of that comfort, a pandemic apathy has resulted and a blind eye has been cast on the emergence of a slow, albeit steady erosion of the opportunities through which those comforts were attained.

It is that erosion, and its causes, that have altered, paradigmatically, the process through which Americans can garner social and economic security. We are all aware that the middle class is "under fire" and that an economic war is being waged relentlessly.

It is so easy to point fingers and cast blame. I have used the term "Darkside" as a "catch all", when referring to those that have incited the situation we now find ourselves in. Although I do believe that there is a specific group of very powerful persons, who maintain an agenda, which includes ruling the world, I do not believe that our well being (or the subsequent loss of such, as middle class Americans) is, necessarily, part of their agenda. We could be, perhaps, more accurately defined as "collateral damage".

Here again, in order to achieve a better understanding of what has happened and, as a result, what is about to happen, we need to examine (once again) the series of events that have already occurred.

The international monetary system has already collapsed three times in the last 100 years. Once in 1914, again in 1939, and then again in 1971. Most are unaware of the specifics of the three events. Each of those disruptions was the result of misguided attempts by greedy banksters, to micro-manage the markets, and each was intrinsically related to gold. The attempt to arbitrate the value of precious metals has caused market dislocations since first attempted. The current manipulation of the price of PMs is no different. It is, after all, a ploy designed to enable the privileged few an opportunity to accumulate a finite resource on the cheap. There follows a punch line, which involves gaining the possession of precious metals as one of the best forms of insurance. But first, lets go over the events that have led up to the current debacle.

At the onset of World War One, at a time that gold's value was set at $20 an ounce, and at a time when dollars could still be redeemed for gold, American bankers were faced with the probability of having to exchange $billions of foreign held reserves. Most of that value was in the form of U.S. railroad stocks and bonds. These securities were liquid assets and could be sold quickly on the New York Stock Exchange. The cash from those sales could then be exchanged for gold bullion.

On July 31, 1914, the then Treasury Secretary William G. McAdoo shut down the NYSE which eliminated the opportunity of the bond holders to liquefy their holdings which, in turn, precluded the opportunity of those bond holders to raise the cash necessary for gold redemption. Understandably, the rest of the world viewed this extraordinary measure as underhanded and complained bitterly. The markets would remain closed until December 12, 1914. During those four months, without the ability to raise cash, needed to service debt, through the sale of securities, the system collapsed, much to the chagrin of everyone except the New York Bankstes who "dodged the bullet" when it came to retaining their gold reserves.

By 1939 the financial machinations initiated by the Federal Reserve had caught on throughout the world. As more and more countries adopted policies like currency devaluation and increasing tariff rates on imported goods, international trade contracted violently and unemployment in export industries exploded. FDR had altered the gold standard by adjusting the price and limiting convertibility, once again, in an attempt to micro-manage the markets. Just as everything was about to come to a screeching halt, Hilter invaded Poland. Could it be that western banksters had something to do with Hitler's decision? I have often stated that, there has never been a war fought for anything but money. World War Two allowed the Banksters to "dodge the bullet" once again.

On August 15, 1971, Richard Nixon decided to suspend the convertibility of dollars into gold. This was, in essence, an act of reneging on agreement that had been contained in the Bretton Woods Accord of 1944. This left the US Dollar backed by nothing. The decision, which was undoubtably proffered by the Banksters, provided the Federal Reserve the unfettered ability to increase the amount of dollars in circulation by as much as they wanted. That privilege (which was unconstitutional to begin with) has been grossly abused to the point of "end game" for the dollar and a global reset for the world.

It should be noted that in each case noted above, legislation contrary to Constitutional Law, was enacted to provide for the actions of the Banksters. Had recourse been employed and retribution demanded, the precedent of "an apt deterrent" might have been set and the proliferation of criminal banksters and politicians been somewhat dissuaded.

Now we can take up where we left off last week. Because of the unfettered issuance of debt based currency, we, as a country, along with all of the TBTF banks, have become so indebted to other countries that both the government and the banks are being foreclosed on. More research this past week provides for the realization that the process of foreclosure will be orchestrated, in part, by the IMF. China has foreclosed on JP Morgan Chase and has taken over the bank. They have also assumed the bank's liabilities, as well as assets. China has also foreclosed on the Federal Reserve and, again, assumed that banks liabilities as well as assets. I suggested that the only means of the recovery of the debt owed them would be to squeeze the American middle class. It turns out that I was right. I didn't, however, understand exactly how it was to be achieved. I now understand.

When viewed from a certain perspective, we realize that China has been subtly buying up the Federal Reserve for some time. The Fed is the largest holder of U.S. Debt. China is second. The Fed holds $2.1 trillion, China holds $1.3 trillion. The US Government became unable to service its debt to China last October. The government has only been able to service its debt to to anyone by borrowing more and more money from the Fed. Talk about a convoluted dog and pony show!

China, and the other BRICS countries, through the guidance of the IMF, will recover the U.S. debt through exchange rate increases and trade tariffs. This will result in an inflation rate, in the U.S., approaching 50%. This is happening now. Everything that we, as Americans, consume, that originates from outside the US will become a great deal more expensive, leaving anyone consuming foreign goods a great deal poorer.

We as a nation have had our standard of living levitated by exploiting the labors and energies of the rest of the world. This was accomplished by the Federal Reserve's exportation of its freshly minted currency and the inflation that resulted in its issuance. The banksters have incited a condition which provides for either an economic reset, or an economic collapse. It is in the world's best interest to insure that U.S. debt be restructured smoothly and without a hitch.

Word is that the U.S. dollar will have one rate of exchange for in country use, and a separate rate of exchange for international transactions. That is because the U.S. treasury and the Federal Reserve are about to divorce each other. Given my well known sentiments concerning the Federal Reserve, you might think that I might consider this a great occurrence. The Treasury will control the in country dollar, and the "international reserve" dollar will be controlled by China and or the I.M.F. consortium of debt holders.

We are all aware (at least those of us who give a hoot) of the massive quantities of gold and silver are flowing from west to east. China's appetite for gold has been insatiable and, as it turns out, has provided for their gold hoard to grow by thousands of tons in the last four years. Now, this possession will allow for their new currency, a gold backed Renminbi, to supplant the dollar as the world's reserve currency.

And now for the punch line. Because of the massive amounts of debt that have been created and the even more massive quantities of derivative exposure by the seven largest banks in the world (some estimate that that total exceeds $800 trillion) there is not enough gold in the world to back a world reserve currency at current valuations. But there is enough gold, along with other resources, to back a world reserve currency if the price suppression/manipulation were to cease and a free market valuation achieved. One of my most respected pundits, Jim Rickards, believes that that price will approach $10,000 per ounce. As I pointed out at the beginning of this missive, the events that will provide for this to happen have already occurred. The US Government has already defaulted on their debts, and the IMF is already in the process of restructuring the US Government debt so as to prevent a global economic meltdown. If you didn't realize that these events had already occurred, it is because TPTB didn't want you to know.

I believe that a bottom has been achieved for gold and silver and platinum and palladium. I also believe that because of that fact, the purchase of precious metals is warranted now. I also believe that precious metals that you already own, no matter how much you paid for them will turn out to be one of the best investments you ever made.

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.

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.

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.