If A Bear Falls And No One Hears, Did It Make A Sound?

Oh how quickly we forget, especially when we never knew.  You would think by now that one of the greatest setbacks to our economy in the last 100 years would be studied more, given that we are still trying to climb out of it going on six years later.

 

I read an article this morning (see link below) that basically said that Bear Stearns (remember them?  They are the ones that were bailed out first in 2008 and then were sold to JP Morgan for pennies on the dollar) didn’t fail because of the mortgage crisis but rather because they were very short on gold and silver and they couldn’t meet margin calls.  My point isn’t whether or not this report is true (although I suspect that it is), my point is that the financial media are ignoring the story.  Not just this story but the whole long history of price manipulation that makes a mockery of what we like to call a market based system.  If Bear Stearns was very short on silver and gold as part of a 100 years long effort to suppress precious metals prices, and that position led to their downfall, doesn’t it behoove the press to delve into the matter?  Or Congress for that matter?

JP Morgan bought Bear Stearns and they have assumed the mantle of price smasher extraordinaire.  Does this activity serve the public or serve China and India who are wise enough to stock up on assets with lasting value at the expense of fiat currencies which have been debased beyond the tolerance of the prudent investor?  Does anyone doubt that the prices of silver and gold are like a coiled spring that has been suppressed to the point where there is no more give?    Has anyone noticed that despite all the talk about gold being a relic, JP Morgan is very long now?  (they understand springs perhaps) They can no longer dump gold on the market (it’s long gone)and outright shorting is a recipe for going the way of Bear Stearns, so their last gasp is to use trading algorithms to drive prices down.  Is there no reporter out there outside the gold and silver camps that can understand this well enough to blow the whistle?

If you have any doubt that MiLords are in control, that we suffer at the hands of an Oligarchy, that wealth is being bled from us at an accelerating pace, look no further than the silence of the mainstream media.  The regulators have been silenced and this has not been reported.  The market has been tampered with beyond recognition.  Inflation is not being reported accurately.  Unemployment is understated.  Real wages are plunging.  And all we hear is the sound of silence.

So if you go to the trouble to read this one story, ask yourself the question: is this not worth headlines?  Would this not portend a coming crisis of even greater magnitude?  Is this whole sordid mess more about treason than it is about shorting gold?

http://www.tfmetalsreport.com/blog/5497/guest-post-what-really-happened-bear-stearns-ted-butler

The Truth Is - I Just Don't Know

I tend to read people with whom I agree.  I confess.  This flies directly in the face of my posting about Critical Thinking.  But that is not to say that I am oblivious to the main stream media and their message about recovery, and the falling unemployment rate and their take on the relevancy of the price of gold.  I take note of the views on printing money out of thin air – oops, I’m sorry – Quantitative Easing and how it doesn’t really spell doom for the dollar.  I listen to commentators applaud Bernanke for saving our hide by coming up with innovative ways to prop up the dollar and the banking system.

I also can read a graph, and when I look at graphs published by the Fed itself, I can only come to one conclusion.  This cannot end well.  Now in the universe of people that I agree with on this point, there is a lot of chatter about how that end will play out.  Some call it a great Reset where the value of the dollar will plummet and it will either be replaced by a new face, or it will be devalued significantly to allow for the $17 Trillion debt to be serviced.  Some refer to a Great Unwinding, where $200 Trillion dollars worth of obligations unravel into a pile of paper with no intrinsic value.  Some see us Falling Off a Cliff and collapsing into chaos, martial law, toilet paper shortages, travel restrictions and a repudiation of retirement fund obligations.

And then there are those who can also read a graph but maintain that we are not in a 100 year long Ponzi  Scheme and that things will get worse, but we will not Reset or Unwind or Fall off a Cliff.  The dollar will lose its Reserve Currency status and this will affect our standard of living, but the dollar will still be a dollar and it will survive as our sovereign currency.  I call this the “muddle our way through” view and it assumes that no one will question 400 to 1 pay ratios that used to be 10 to 1, that the falling middle class will keep clawing and defending our democratic form of government and a capitalist system that rewards those who make us more productive.

This is where it is prudent to step back and take a longer view.  How does a fiat paper system fare when a government resorts to unbridled printing of new money?  How is it possible to dump thousands of tons of gold into the market in order to artificially keep the price down for fifty years, and then persuade people to believe that gold is not money?  That the citizens of India and China are deluded and they will see their gold and silver wealth crushed by a piece of paper with the face of a dead President on it?  That Fort Knox being empty is of no consequence?  That the paper profits making many bankers and financial traders billionaires were justified because they helped fuel our prosperity for 50 years?

The long historical view says to me, that this will not end well.  The dollar will lose its Reserve Status.  There will be a Bretton Woods like conference, and those with the gold will sit at the head of the table and those with empty vaults and piles of derivatives and notes and credit default swaps will sit at the foot of the table.  Bretton Woods is 70 years old this year.  Look it up and study why the dollar was given Reserve Currency status.  And while you’re at it, look up Petro-dollars and the WTO and the suppression of gold prices and how insurance is used to hedge gambling by banks.

 

Yes, Critical Thinkers study history.  And the main stream media is selling us short and feeding us the company line.  The people charged with regulating our markets are turning a blind eye to overt manipulation that a fifth grader could recognize if shown 365 daily graphs.  Unemployment figures are presented with a straight face, with no attention being given to the falling levels of total employment and the falling income levels.  Inflation numbers are fudged and then fudged some more.  Yes, I conclude that it will not end well.

But I don’t pretend to know what that means and anyone who says they do is just guessing.  I don’t know if there will be a cliff or just a steady march to the bottom.  I don’t know if people will rise to the occasion and start a million local businesses that restore our productivity or if instead we are locked down by martial law to keep starving people from roaming the countryside.  I don’t know if banks will be propped up indefinitely or whether they will at last be allowed to fall into ruin.

What I do know is this.  There are things we can do that are prudent under any scenario.  Get out of debt, grow food, look for ways to be productive and form communities.  I will close with a paragraph from my very first blog entry in February 2012:

“My conclusion is that by Visualizing Intrinsic Value Alignment (VIVA) we can embark upon a journey that is appropriate for all prophetic outcomes.  For me this means I want to grow more of my own food.  Will that serve me and my family if the world economy falls apart?  Yes.  Will it still serve me if we muddle on much like we have for the last five years? Yes.  Will it serve if energy becomes scarce?  Yes.  I cannot imagine many scenarios where growing more of my own food will not be of great benefit to my well being.  I can then cast aside Future Fear and live according to my intrinsic values which assumes of course my values align with a system of productivity in community and not with derivatives and fiat currency.”