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Lucas Brandenburg had been under investigation by the Florida Department of Law Enforcement for several months prior to his arrest.
Brevard County Sheriff’s Office Lucas Brandenburg had been under investigation by the Florida Department of Law Enforcement for several months prior to his arrest.

A Florida youth pastor has been busted for reportedly victimizing the same age group he set out to serve.

Lucas Dillon Brandenburg, 30, was arrested Thursday on 10 counts of possession of child pornography, the Florida Department of Law Enforcement confirmed in a statement.

Cops were tipped off to the Titusville pastor’s deranged preferences in July after identifying a computer at his home that was reportedly sharing images of young girls involved in sexual activity with men and boys. Some of the victims were as young as 9 years old.

In his arrest affidavit, Brandenburg “stated he has been viewing child pornography for over 10 years,” WESH.com reports.


Despite signs that the U.S. economy is gaining traction, Stephen Roach, former chairman of Morgan Stanley Asia, says the recovery appears to be a “false dawn.”

“Financial markets and the so-called Davos consensus are in broad agreement that something close to a classic cyclical revival may finally be at hand for the U.S. But is it?” Roach, a senior fellow at Yale University, wrote in an op-ed published on the Project Syndicate website on Monday.

“At first blush, the celebration seems warranted… But my advice is to keep the champagne on ice,” he said.

Roach argues that two quarters of strengthening gross domestic product (GDP) growth doesn’t indicate a breakout from an anemic recovery. He cited a temporary acceleration in the second and third quarters of 2010 as well as in the fourth quarter of 2011 and the first quarter of 2012.

Roach says he would not rule out a similar outcome this time around, given much of the growth uptick has been driven be an “unsustainable” surge of restocking. Over the first three quarters of 2013, rising inventory investment accounted for 38 percent of the 2.6 percent increase in total GDP, he said.

“With inventory investment unlikely to keep accelerating at anything close to its recent rate, overall GDP growth can be expected to converge on this more subdued pace of final demand,” he said.

According to Roach, the toughest issue for the economy is the ongoing household “balance sheet recession” that is stifling American consumers who are still working to pay down debt and remain in saving mode.

The debt-to-income ratio – or the percentage of a consumer’s monthly gross income that goes toward paying debts – for U.S. households is now down to 109 percent, well below the peak of 135 percent reached in late 2007.

In the 17 quarters since the “recovery” began, annualized growth in real personal consumption expenditure has averaged just 2.2 percent, compared with a pre-crisis trend of 3.6 percent from 1996 to 2007, he said.

“In the past, when discretionary spending on items such as motor vehicles, furniture, appliances, and travel was deferred, a surge of ‘pent-up demand’ quickly followed,” he said

“The record plunge in consumer demand during the Great Recession has been followed by persistently subpar consumption growth,” he added, referring to the 2007-2008 global financial crisis.

Finally, Roach says the decline in the unemployment rate is merely a reflection of grim labor market conditions which have discouraged workers from staying in the workforce.

If the labor force participation rate was 66 percent, as it was in early 2008, rather than 62.8 percent, as it was in December 2013, the unemployment rate would be just over 11 percent, not 6.7 percent, he said.

“Yes, there has been some progress on the road to recovery. But, as (economists) Carmen Reinhart and Ken Rogoff have long documented, post-crisis healing is typically slow and painful. Notwithstanding the Fed’s [Federal Reserve] claims that its unconventional policies have been the elixir of economic renewal in the U.S., the healing process still has years to go,” he concluded.

—By CNBC’s Ansuya Harjani. Follow her on Twitter: @Ansuya_H



New reports indicate a Fukushima-style nuclear disaster is inevitable in the Miami area, and need to be investigated immediately.

Concerns over the possibility of a Fukushima-like nuclear meltdown event in the U.S. have been growing, with the most likely next disaster predicted in 2011 to be surprisingly close to Miami Florida, at the Turkey Point facility 20 miles east of Homestead.

According to a July 23rd NPR story, the Turkey Point facility was found to be (literally) in hot water, over its cooling system, which caused federal regulators to be so concerned, that they upped the nuclear plant’s cooling system allowable temperature to exceed the 100 degree limit for 10 days – up to 103 degrees if necessary. The plant has come close to 100 degrees, which should mandate an immediate shut down. But instead of exercising precaution, regulators simply increased their legal limit causing environmental groups in nearby Biscayne National Park to express grave concern. Read or listen to the NPR story, Nuclear Plant May Be In Hot Water Over Its Cooling System, to learn the alarming details, which includes the following highly disturbing fact:

The Turkey Point facility has a canal-based cooling system, technology like something out of the Dark Ages. What happens if that system fails as it appears to be doing now? Will the non-canal based cooling back up system (diesel-based) work? These questions need to be asked and answered, but the most poignant question of all is: is a core infrastructure failure occurring and responsible for the insufficient cooling system the plant is experiencing?

According to the original Miami New Times exposé published in 2011, the Turkey Point nuclear facility has serious infrastructure issues that make it an extreme risk for a radiation leakage event, or much worse:

“It’s old. When Turkey Point went into operation in 1972, it was licensed for 40 years. The U.S. Nuclear Regulatory Commission (NRC) recently “rubber-stamped” another 20 years, allowing the plant to operate until 2033. “This is uncharted territory,” Saporito says. “They cannot dispute that those reactors may crack from being bombarded with high-level radiation.”

The most concerning evidence was provided by Erin Elizabeth, founder of HealthNutNews, who reported and documented earlier today that the closest radiation monitor to the Turkey Point station far north was the highest in the country at 100, which is close to ALERT level, the highest parameter the only publicly supported real-time independent radiation monitoring site RadiationNetwork.comhas in their gradient of concern, and would indicate some radioactive source above and beyond background radiation is responsible. See screen shot below taken at 12 pm EST:

Is Miami on the Brink of A Nuclear Disaster?

The monitoring station’s readings fluctuated wildly today [Aug. 21st], between 30-100. Whatever the cause(s) for these rising and fluctuating radiation levels may be, at least, an investigation is justified. Also, because the concerning levels of radiation were measured in Del Ray Beach, 80 miles away from the Turkey Point plant facility, everyone in between, including the densely population of Miami, would be potentially affected. This anomaly should be taken seriously and an explanation must be providedby those whose responsibility it is to protect the public and secure the safety of this facility.

What are the implications of this?

We don’t truly know. Following the global suppression of coverage on Fukushima – have you heard anything about it lately? – we can expect similar silence on the subject of this reactor, and all the others that should have been decommissioned decades ago. We need to spread awareness, raise concern, and hope for the best. At the least, we need to acknowledge the significance of a potential meltdown event here in the states. As reported by the Miami New Times,  Thomas Saporito, a Jupiter-based former instrument control technician at nuclear power plants in Florida, Arizona, and Texas, who spent three years at Turkey Point, and who now works as a consultant and nuclear watchdog, the plant’s spent fuels are brimming with danger. In recent interview he stated that the increase in temperatures indicate that, “This is uncharted territory.” Also, that, regulators and plant operators “[C]annot dispute that those reactors may crack from being bombarded with high-level radiation.”

Also revealed in the Miami New Times report:

“Last June, FPL was fined $70,000 for violations regarding Turkey Point’s spent fuel pools. The negligence “could have resulted in a severe nuclear accident,” Saporito says. “That could be a horrific disaster all by itself.”

If Turkey Point melts down, Miami is doomed. Saporito says there will be no time to evacuate the city to protect ourselves from radiation. If there’s a meltdown, “people are going to die,” he says, “and the entire city of Miami could become a ghost town that nobody can go back to for 50,000 years.”

To confirm the inevitable danger of a nuclear disaster in Florida, A Huffington Post article published in 2014 revealed how “How Rising Seas Could Sink Nuclear Plants On The East Coast,” featured the Turkey Point plant, showing how sea level rise will make a nuclear disaster much more likely there unless we start decommissioning it and moving the tons of radioactive materials to safer ground now.

- See more at: http://survivalbackpack.us/miami-brink-nuclear-disaster/#sthash.eAkCW6nI.dpuf


We may eventually know the actual facts in the killing of 18-year-old Michael Brown by policeman Darren Wilson in the Missouri town of Ferguson, but the widely publicized full-scale war on protesters there by the police has finally begun to alert Americans of all backgrounds to the militarization of law enforcement in many areas of our nation.

Constitutional lawyer John Whitehead, founder and president of civil liberties defender The Rutherford Institute, has been reporting often on this aggrandizement of our police:

“This is not just happening in Ferguson, Missouri. As I show in my book ‘A Government of Wolves: The Emerging American Police State,’ it’s happening and will happen anywhere and everywhere else in this country where law enforcement officials are given carte blanche to do what they like, when they like, how they like, with immunity from their superiors, the legislators and the courts …

“We’ve not only brought the military equipment used in Iraq and Afghanistan home to be used against the American people. We’ve also brought the very spirit of the war home” (“Turning America Into a War Zone, Where ‘We the People’ Are the Enemy,” Whitehead, Rutherford.org, Aug. 20).

Also reporting on police militarization is Walter Olson of the Cato Institute (where I am a senior fellow):

“Why armored vehicles in a Midwestern inner suburb? Why would cops wear camouflage gear against a terrain patterned by convenience stores and beauty parlors? Why are the authorities in Ferguson, Mo., so given to quasi-martial crowd control methods (such as bans on walking on the street) and, per the reporting of Riverfront Times, the firing of tear gas at people in their own yards? (‘ “This is my property!” he shouted, prompting police to fire a tear gas canister directly at his face.’) (“Police Militarization in Ferguson — and Your Town,” Olson, Cato.org, Aug. 13).

more@ http://www.cato.org/publications/commentary/we-awaken-national-militarization-police-not-only-ferguson


The nonpartisan Congressional Budget Office (CBO) has raised its estimate for this year’s federal deficit to $506 billion, while slashing its growth forecast for the US economy.

The new estimate is $14 billion more than the budget office’s last report in April which had projected the deficit for fiscal 2014 to hit $492 billion on September 30. The US government’s fiscal year runs from October through September.

The new projection is largely a result of lower-than-expected revenues for the year, in part because receipts from corporate income taxes are $37 billion less than expected.

Corporate tax revenues will be $315 billion in 2014, compared to a prior estimate of $351 billion, CBO said Wednesday.

Meanwhile, the agency slashed its projection of gross domestic product (GDP) growth for the year to 1.5 percent from 3.1 percent, “reflecting the surprising economic weakness in the first half of the year.”

“Later in the coming decade, if current laws governing federal taxes and spending generally remain unchanged, revenues would grow only slightly faster than the economy and spending would increase more rapidly,” CBO said.

The deficit in 2015 will drop to $469 billion, which would be 2.6 percent of the GDP.

After 2018, however, the federal deficit is expected to rise to about 4 percent of GDP through 2024.

The budget office further said public debt would hit 77 percent of GDP in 2024, down slightly from a previous estimate of 78 percent.

The deficit is expected to reach $960 billion in 2024 due to an aging population, rising healthcare costs and an expansion of federal subsidies for insurance.

http://www.presstv.com/detail/2014/08/27/376777/us-federal-deficit-to-hit-506-billion/

 


Surveillance video shows an Ohio man talking on a cell phone, leaning on a toy gun, and facing away from officers moments before police shot and killed him in a Walmart store, according to an attorney for the man’s family.

John Crawford III died Aug. 5 after police were called to Walmart in Beavercreek, near Dayton, by another shopper who reported a man carrying what appeared to be an AR-15 rifle.

The 22-year-old Crawford was instead carrying an unpackaged MK-177 (.177 caliber) BB/pellet rifle he picked up in the store’s toy department.

Police claim Crawford ignored their commands to drop the weapon, and the former Marine who called in the report and witnessed the shooting said Crawford “looked like he was going to go violently.” But attorney Michael Wright said surveillance video from the incident, which Ohio’s attorney general allowed him to watch with Crawford’s family, contradicted those accounts.
“John was doing nothing wrong in Walmart, nothing more, nothing less than shopping,” Wright said.

The attorney said surveillance video showed Crawford facing away from officers, talking on the phone, and leaning on the pellet gun like a cane when he was “shot on sight” in a “militaristic” response by police. Ohio Attorney General Mike DeWine announced Tuesday handed the case over to a special prosecutor to present to a grand jury Sept. 22.

Piepmeier, an assistant Hamilton County, Ohio, prosecutor, has handled more than 100 officer-involved shooting cases in his career. He oversaw the grand jury investigation of Stephen Roach, who was indicted but later acquitted of a negligent homicide charge in the fatal 2001 shooting of 19-year-old Timothy Thomas that sparked race riots in Cincinnati.

DeWine said Tuesday he was glad he had allowed Crawford’s family to view the surveillance video, but he did not plan to publicly release the video to avoid tainting the jury pool.

“I thought the family had the right to view it,” DeWine said. “The mom did not want to view it; I understand it. The dad did view it, (but) to put the video out on TV is not the right thing to do.”
Wright said the family objected to the piecemeal release of evidence, such as dispatch audio and video on the day of the shooting, was biased toward the police.

“Everything released is one-sided,” Wright said. “There is nothing favorable to John Crawford. You can’t show different pieces, show it all, don’t trickle pieces to gain favor of the public.” He said the video suggests Crawford probably did not see or hear officers as they arrived.

Crawford was speaking by cell phone to his girlfriend, who was with his parents, when he was shot.

“He said he was at the video games playing videos, and he went over there by the toy section where the toy guns were,” said LeeCee Johnson, the mother of his two children. “The next thing I know, he said, ‘It’s not real,’ and the police start shooting, and they said ‘Get on the ground,’ but he was already on the ground because they had shot him.” Johnson put the phone on speaker mode, and she and Crawford’s parents heard him die.
Read more at http://www.liveleak.com/view?i=200_1409081392#RWux3kKIFRrMRZgM.99


US intelligence: 300 Americans fighting alongside Islamic State

[Yeah, that includes their handlers.]

27 Aug 2014 The United States government is tracking as many as 300 Americans supposedly fighting with Islamic State, the jihadist group with a heavy presence in parts of Syria and Iraq, according to senior US officials. Washington is worried that radicalized foreign fighters could become a risk to the US if they return to employ skills learned overseas to carry out attacks, anonymous US officials said, according to the Washington Times. “We know that there are several hundred American passport holders running around with ISIS in Syria or Iraq,” a senior US official said.


Protesters March on Hartford Police Department After Teen Is Shot With Taser

27 Aug 2014 Community activists are protesting the arrest of a Hartford teen who police shot with a Taser last week and demanding that the officer be charged instead. They gathered at Albany Avenue and Main Street to march on Hartford police headquarters Wednesday evening. “Drop those charges! They tased him!” protesters shouted during the rally.


1) Iceland has 130 volcanic mountains of which 89 have erupted since 900 A.D.

2) Katla volcano last erupted 96 years ago in 1918. It normally erupts every 13 to 95 years. Katla’s last major eruption was in 1918. It threw so much water from the glacier above it into the atmosphere that it flooded the trenches in Europe making the war difficult to wage for almost a week.

3) Katla erupted in 1700 . It threw so much ash into the air that it blocked enough sunlight to freeze the Mississippi river near New Orleans. Katla also erupted just before the French revolution and forced food prices beyond the reach of the poor.

4) 1816 was a year without a summer. Then as now we had a minimum of sun spot activity which causes global cooling. Mt Tambora in the Dutch East Indies erupted and sent so much ash into the sky that sunlight was partially blocked. Snow and frosts occurred that summer curtailing food production. There were only one billion people then. Today we have more than 7 billion which means we are one big earthquake and one major volcano away from Global Starvation.

5) California has two nuclear power plants almost directly on top of earth quake fault lines. Del Mar racetrack has lost ten horses so far this year. A couple died of heart attacks. Race horses are not old. They were all foals and colts after the events of Fukushima meaning they absorbed radiation more rapidly than adult humans. They are athletes and breathe deeply. They also eat a lot of food and drink a lot of water that could be contaminated with radiation from Fukushima. Fukushima is far away. But California is much closer and any melt downs would add to existing radiation levels.

6) The New Madrid earthquakes were a series of 4 quakes on three separate days that occurred over 53 days from December 16, 1811 to February 7, 1812. Two of those quakes reversed the flow of the Mississippi river. The Mississippi is the fourth longest river in the world. Can you calculate how much force would be required to lift the water in the Mississippi river and send it in the other direction?  That is how much force an earthquake can release.

7) The San Andreas fault runs a distance of about 810 miles (1,300 km). A 2006 University of California study concluded that a Mega Thrust quake is more likely to occur on the southern third of the San Andreas fault. The southern section of the fault has not seen a quake in over 300 years. The San Gabriel fault runs through Los Angeles. Both are overdue.

8) There are 800,000 miles (1,287,475 Kms) of water pipes and aqueducts in the US. Americans use almost 400 billion gallons of water a day. The US has 600,000 miles (965,606 Kms) of sewers. Earthquakes on either California or the New Madrid could cut off water and sewers to 20 million Californians or ten million or more people in the center of the US where the New Madrid fault lies. The New Madrid fault covers parts of Illinois, Missouri, Kentucky, Arkansas and Tennessee.

9) The US has more than 300,000 miles (482,803 Kms) of natural gas pipelines and 150,000 miles (241,402 Kms)  of crude  oil and gasoline pipelines. The New Madrid fault line is in the center of America and is near most oil and natural gas production. If quakes severed these pipelines, America would grind to a halt for an extended period of time due to shortages of oil, natural gas and gasoline.

10) If one or more of the nuclear power plants facing either the Missouri or Mississippi rivers melted down and spilled into either river, they would turn the Gulf of Mexico and hence the Atlantic Ocean into a toxic waste dump. The Pacific Ocean is already losing life forms along the Canadian and American west coasts due to Fukushima.

11) California’s Salton Sea and surrounding basin is near the San Andreas fault. There have been earthquake swarms in the area.  The USGS is studying four active volcanoes on the south side of the Salton Sea. There is a large pool of magma 2 to 4 miles below the volcanoes. They think an earthquake would send the magma to the surface in a giant volcanic eruption. The volcanoes have been emitting a rotten egg smell (Hydrogen Sulfide) which has been detected 120 miles away in Los Angeles and San Diego. It was this same smell that preceded the eruption of Vesuvius which buried Pompeii in 79 AD.

12) An 8.35 earthquake releases the same power as two 25 megaton Hydrogen bombs. In the 1906 San Francisco earthquake a road was thrown 20 feet. At that time a dirt road’s sudden movement in a rural county immediately north of the city did little damage.

13) America has a $4 trillion deficit in repair to its infrastructure. Legal and illegal immigration is increasing the demand for new schools, roads, bridges, dams, sewers and hospitals. Earthquakes in California and in the New Madrid area could add a trillion dollars to that repair bill. As we have seen, some of those repairs to interstate roads, water aqueducts and gasoline and natural gas pipelines would be urgent. Money for those repairs are already scarce.

14) Imagine the abrupt change to life in southern California that a major earthquake would produce. Early one morning a major earthquake erupts and it takes down the freeways. Roads rupture. Overpasses fall to the ground making escape by auto impossible. The quake lasts more than 2 minutes. In the second minute the sewers and the water pipelines rupture. The natural gas pipelines break and cause fires. There is no water to fight fires. There is no electricity so 20 million people cannot buy food and gasoline with credit cards, debit cards and EBT Food Stamp cards. In any event the gas pumps won’t work without electricity though a few battery operated pumps could be set up for emergency vehicles but none of the gas will be given to civilians. They will have no drinking water. Most people did not understand that they were supposed to store water for emergencies and that the first thing to do is to fill the tub and all available containers with water. There will be no hospitals.

15) Feeding and housing 20 million southern Californians will be beyond the abilities of the federal government. Just giving them emergency medical treatment and water to drink will be a herculean task. This task would be compounded if the volcanoes at the Salton Sea erupted. And, if the San Onofre nuclear power plant were to meltdown, the radiation released would force people to evacuate. But where would they go? How would they find a job? How much tax money would the US government lose each month and for how many months before the economy recovers?

16) In 1906 the psychologist William James went from Stanford to San Francisco and noticed how well people worked together. That was then. This is now. Los Angeles has well over 100,000 Street Gang members. What will they do? The answer is anything they want. There will not be much of a police presence. George Hemminger talked to gangbangers in California who said they would be committing, robbery, rape, murder and mayhem.

17) Depending on how severe the earthquakes are in the New Madrid area, the US could have 4 to 6 to 8 nuclear power plants melt down. There is a problem with the electrical power grid. US nuclear power plants rely on electricity from the power grid for cooling when they are shut down. If the power grid goes down, the plants rely on batteries to keep the cooling process going for 4 to 8 hours. After that they would use generators. But the situation could become dire if the power grid remained down for too long.

18) The long term problem would be the health risks of radiation releases from 6 or more American Fukushimas. Safe food would be a concern. When Hillary Clinton was Secretary of State, she negotiated with the Japanese to allow them to ship fish they caught off the coast of Fukushima directly into America without being inspected for radiation. This is obviously harmful to American consumers. But after 6 melt downs on US soil, the US will have a problem finding safe food to eat. I would personally recommend that you try greenhouses and aquaponics. But the problem there would be neighbors and government officials taking your food away from you.

19) The Indo-Australian plate is active as well as the entire Pacific ring of fire. Buoys measure water columns to predict tsunamis that move across the ocean at 500 mph. In a recent quake near Australia buoys thousands of miles apart became active within 20 minutes of each other. Because tsunamis cannot travel at 10,000 mph we know that the Indo-Australian plate is active and the entire area of the South Pacific is likely to have major quakes.

What we need to do is to develop locally generated power to replace both the power grid which loses electricity due to resistance in those wires transporting electrons over long distances. The United States government has Tesla technology. Nikola Tesla discovered alternating current electricity. In 1934 He said he had a mechanism for generating tremendous electrical force and a means of intensifying and amplifying the force developed by that mechanism. The government seized 155 boxes and crates of Tesla’s lab notes and equipment when he died in 1943. They have spent billions of dollars every year perfecting his work and on other clandestine research which they have kept hidden from the public.

The government or rather the people who think they own our government have done such a poor job running things that we as a people will soon have a choice between extinction and survival which is to say a choice between accepting more of this abuse from above or learning to say No to tyranny. The choice is ours and not theirs.

original link @ http://vidrebel.wordpress.com/2014/08/27/19-facts-about-american-earthquakes-and-the-iceland-volcanoes/


Microsoft co-founder Bill Gates and his wife, Melinda, have donated $1 million to a Washington state campaign seeking to expand background checks on gun sales, bringing the total amount the campaign has brought in up to nearly $6 million.

The donation to the Initiative 594 campaign was given Friday, but it was not made public until Monday, when it posted on the state’s Public Disclosure Commission website.

I-594 would require background checks for all gun sales and transfers in Washington state, including at gun shows and for private sales. Under the measure, exemptions would exist, including gifts within a family and antiques.

In a joint written statement issued Monday, the couple said that they believe I-594 “will be an effective and balanced approach to improving gun safety in our state by closing existing loopholes for background checks.”

The large donation comes on the heels of fellow Microsoft co-founder Paul Allen’s $500,000 donation earlier this month. Also last week, venture capitalist Nick Hanauer donated an additional $1 million, bring his total donation to the campaign to nearly $1.4 million.

Other prominent figures who have made large donations to the campaign include former Microsoft CEO Steve Ballmer and his wife, Connie, who have given $580,000.

- See more at: http://survivalbackpack.us/bill-melinda-gates-donate-1-million-gun-control-campaign/#sthash.5N0aznWc.dpuf


Something is very wrong here.

Shell Tzorfas on YouTube pointed us to this U.S. Centers for Disease Control and Prevention (CDC) paper “Trends in the Prevalence of Developmental Disabilities in U.S. Children, 1997–2008” and what are some pretty astonishing figures.

The joint CDC—Health Resources and Services Administration (HRSA) paper not only revealed that one in six children across America suffered from a developmental disability in 2006-2008, but the rate of parent-reported developmental disabilities in their children had increased 17.1% from 1997 to 2008.

Worse, in the 12-year period, the prevalence of autism increased nearly three hundred percent (289.5%).

Males were twice as likely to suffer from developmental disabilities as females. The sample size wasn’t small, either; the study included some 119,367 children.

One in six. That means if you go to just two of your neighbors’ homes with children, it is very likely that at one of them, you will find at least one child with a developmental disability.  And these figures were from 2008, so that begs the question: how bad are they now?

http://www.activistpost.com/2014/08/did-you-know-1-in-6-children-now-has.html


After reading this you may never trust Congress or the FDA again, let alone corporate chain grocery stores. This toxic practice makes seriously decayed meat look fresh for weeks and is banned in many countries including the European Union and Japan. Many consumers are unaware that over 70% of beef and chicken in the United States and Canada is treated with poisonous carbon monoxide gas and the FDA allows it, despite the known public health risks. A bill was introduced in Congress that would require the labeling of meat that has been treated with carbon monoxide but it was never enacted and the topic was swept under the rug entirely. [Bill: H.R. 3115 (110th) introduced on July 19, 2007; never enacted.] This practice makes meat appear and smell fresh even when contaminated with harmful bacteria such as Clostridium botulinum, Salmonella, Campylobacter, and E-coli 0157:H7. Carbon monoxide makes meat appear fresher than it really is by reacting with the meat pigment myoglobin to create carboxymyoglobin. This bright red pigment masks the natural telltale signs of spoiled meat such as rank odors and slime. Meats containing carboxymyoglobin will appear red and fresh for days or even weeks beyond the point of spoiling.


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- Ben Bernanke, Deflation: Making Sure “It” Doesn’t Happen Here, November 21, 2002

A year ago, when it became abundantly clear that all of the Fed’s attempts to boost the economy have failed, leading instead to a record divergence between the “1%” who were benefiting from the Fed’s aritficial inflation of financial assets, and everyone else (a topic that would become one of the most discussed issues of 2014) and with no help coming from a hopelessly broken Congress (who can forget the infamous plea by a desperate Wall Street lobby-funding recipient “Get to work Mr. Chariman”), we wrote that “Bernanke’s Helicopter Is Warming Up.”

The reasoning was very simple: in a country (and world) drowning with debt, there are only two options to extinguish said debt: inflate it away or default. Anything else is kicking the can while making the problem even worse. Because while the Fed has been successful at recreating the world’s biggest asset bubble (in history), it has failed to stimulate broad, “benign” demand-pull inflation as the trickle down effects of its “wealth effect” have failed to materialize 6 years after the launch of the Fed’s unconventional monetary policies.

In other words, a world stuck in the last phase before complete Keynesian collapse, had no choice but to gamble “all in” with the last and only bluff it had left before admitting the economic system it had labored under, one which has borrowed so extensively from the future to fund the present that there is no future left, has failed.

The only question left was when would the trial balloons for such monetary paradrops start to emerge.

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We now know the answer, and it is today.

Moments ago a stunning article appearing in the “Foreign Affaird” publication of the influential and policy-setting Council of Foreign Relations, titled “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People.”

In it we read the now conventional admission of failure by Keynesians, who however, unwilling to actually admit they have been wrong, urge the even more conventional solution: do more of the same that has lead to the current financial cataclysm, only in this case the authors advocate no longer pretending that the traditional monetary channels work but to, literally, paradrop money. To wit:

To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.

 

Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.

A third, and most important outcome, would be the one we have forecast from the beginning of this ridiculous central bank experiment: “hyperinflation” (which is not simply runaway inflation as it is often incorrectly designated –  it is outright evisceration of the prevailing monetary system), which has been avoided for now, but which is inevitable in a world in which only the wholesale destruction of the fiat reserve currency is the one option left to inflate away the debt overhang.

So without further ado, here is the first official trial balloon – the article that one day soon will be seen as the canary in the paradropmine, and the piece that will finally get the rotor of Bernanke’s, now Yellen’s infamous helicopter finally spinning. Highlights ours:

Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People

From Foreign Affairs, by Mark Blyth and Eric Lonergan

In the decades following World War II, Japan’s economy grew so quickly and for so long that experts came to describe it as nothing short of miraculous. During the country’s last big boom, between 1986 and 1991, its economy expanded by nearly $1 trillion. But then, in a story with clear parallels for today, Japan’s asset bubble burst, and its markets went into a deep dive. Government debt ballooned, and annual growth slowed to less than one percent. By 1998, the economy was shrinking.

That December, a Princeton economics professor named Ben Bernanke argued that central bankers could still turn the country around. Japan was essentially suffering from a deficiency of demand: interest rates were already low, but consumers were not buying, firms were not borrowing, and investors were not betting. It was a self-fulfilling prophesy: pessimism about the economy was preventing a recovery. Bernanke argued that the Bank of Japan needed to act more aggressively and suggested it consider an unconventional approach: give Japanese households cash directly. Consumers could use the new windfalls to spend their way out of the recession, driving up demand and raising prices.

As Bernanke made clear, the concept was not new: in the 1930s, the British economist John Maynard Keynes proposed burying bottles of bank notes in old coal mines; once unearthed (like gold), the cash would create new wealth and spur spending. The conservative economist Milton Friedman also saw the appeal of direct money transfers, which he likened to dropping cash out of a helicopter. Japan never tried using them, however, and the country’s economy has never fully recovered. Between 1993 and 2003, Japan’s annual growth rates averaged less than one percent.

Today, most economists agree that like Japan in the late 1990s, the global economy is suffering from insufficient spending, a problem that stems from a larger failure of governance. Central banks, including the U.S. Federal Reserve, have taken aggressive action, consistently lowering interest rates such that today they hover near zero. They have also pumped trillions of dollars’ worth of new money into the financial system. Yet such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse. It’s well past time, then, for U.S. policymakers — as well as their counterparts in other developed countries — to consider a version of Friedman’s helicopter drops. In the short term, such cash transfers could jump-start the economy. Over the long term, they could reduce dependence on the banking system for growth and reverse the trend of rising inequality. The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them.

EASY MONEY

In theory, governments can boost spending in two ways: through fiscal policies (such as lowering taxes or increasing government spending) or through monetary policies (such as reducing interest rates or increasing the money supply). But over the past few decades, policymakers in many countries have come to rely almost exclusively on the latter. The shift has occurred for a number of reasons. Particularly in the United States, partisan divides over fiscal policy have grown too wide to bridge, as the left and the right have waged bitter fights over whether to increase government spending or cut tax rates. More generally, tax rebates and stimulus packages tend to face greater political hurdles than monetary policy shifts. Presidents and prime ministers need approval from their legislatures to pass a budget; that takes time, and the resulting tax breaks and government investments often benefit powerful constituencies rather than the economy as a whole. Many central banks, by contrast, are politically independent and can cut interest rates with a single conference call. Moreover, there is simply no real consensus about how to use taxes or spending to efficiently stimulate the economy.

Steady growth from the late 1980s to the early years of this century seemed to vindicate this emphasis on monetary policy. The approach presented major drawbacks, however. Unlike fiscal policy, which directly affects spending, monetary policy operates in an indirect fashion. Low interest rates reduce the cost of borrowing and drive up the prices of stocks, bonds, and homes. But stimulating the economy in this way is expensive and inefficient, and can create dangerous bubbles — in real estate, for example — and encourage companies and households to take on dangerous levels of debt.

That is precisely what happened during Alan Greenspan’s tenure as Fed chair, from 1997 to 2006: Washington relied too heavily on monetary policy to increase spending. Commentators often blame Greenspan for sowing the seeds of the 2008 financial crisis by keeping interest rates too low during the early years of this century. But Greenspan’s approach was merely a reaction to Congress’ unwillingness to use its fiscal tools. Moreover, Greenspan was completely honest about what he was doing. In testimony to Congress in 2002, he explained how Fed policy was affecting ordinary Americans:

“Particularly important in buoying spending [are] the very low levels of mortgage interest rates, which [encourage] households to purchase homes, refinance debt and lower debt service burdens, and extract equity from homes to finance expenditures. Fixed mortgage rates remain at historically low levels and thus should continue to fuel reasonably strong housing demand and, through equity extraction, to support consumer spending as well.”

Of course, Greenspan’s model crashed and burned spectacularly when the housing market imploded in 2008. Yet nothing has really changed since then. The United States merely patched its financial sector back together and resumed the same policies that created 30 years of financial bubbles. Consider what Bernanke, who came out of the academy to serve as Greenspan’s successor, did with his policy of “quantitative easing,” through which the Fed increased the money supply by purchasing billions of dollars’ worth of mortgage-backed securities and government bonds. Bernanke aimed to boost stock and bond prices in the same way that Greenspan had lifted home values. Their ends were ultimately the same: to increase consumer spending.

The overall effects of Bernanke’s policies have also been similar to those of Greenspan’s. Higher asset prices have encouraged a modest recovery in spending, but at great risk to the financial system and at a huge cost to taxpayers. Yet other governments have still followed Bernanke’s lead. Japan’s central bank, for example, has tried to use its own policy of quantitative easing to lift its stock market. So far, however, Tokyo’s efforts have failed to counteract the country’s chronic underconsumption. In the eurozone, the European Central Bank has attempted to increase incentives for spending by making its interest rates negative, charging commercial banks 0.1 percent to deposit cash. But there is little evidence that this policy has increased spending.

China is already struggling to cope with the consequences of similar policies, which it adopted in the wake of the 2008 financial crisis. To keep the country’s economy afloat, Beijing aggressively cut interest rates and gave banks the green light to hand out an unprecedented number of loans. The results were a dramatic rise in asset prices and substantial new borrowing by individuals and financial firms, which led to dangerous instability. Chinese policymakers are now trying to sustain overall spending while reducing debt and making prices more stable. Like other governments, Beijing seems short on ideas about just how to do this. It doesn’t want to keep loosening monetary policy. But it hasn’t yet found a different way forward.

The broader global economy, meanwhile, may have already entered a bond bubble and could soon witness a stock bubble. Housing markets around the world, from Tel Aviv to Toronto, have overheated. Many in the private sector don’t want to take out any more loans; they believe their debt levels are already too high. That’s especially bad news for central bankers: when households and businesses refuse to rapidly increase their borrowing, monetary policy can’t do much to increase their spending. Over the past 15 years, the world’s major central banks have expanded their balance sheets by around $6 trillion, primarily through quantitative easing and other so-called liquidity operations. Yet in much of the developed world, inflation has barely budged.

To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.

MAKE IT RAIN

Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.

Such an approach would represent the first significant innovation in monetary policy since the inception of central banking, yet it would not be a radical departure from the status quo. Most citizens already trust their central banks to manipulate interest rates. And rate changes are just as redistributive as cash transfers. When interest rates go down, for example, those borrowing at adjustable rates end up benefiting, whereas those who save — and thus depend more on interest income — lose out.

Most economists agree that cash transfers from a central bank would stimulate demand. But policymakers nonetheless continue to resist the notion. In a 2012 speech, Mervyn King, then governor of the Bank of England, argued that transfers technically counted as fiscal policy, which falls outside the purview of central bankers, a view that his Japanese counterpart, Haruhiko Kuroda, echoed this past March. Such arguments, however, are merely semantic. Distinctions between monetary and fiscal policies are a function of what governments ask their central banks to do. In other words, cash transfers would become a tool of monetary policy as soon as the banks began using them.

Other critics warn that such helicopter drops could cause inflation. The transfers, however, would be a flexible tool. Central bankers could ramp them up whenever they saw fit and raise interest rates to offset any inflationary effects, although they probably wouldn’t have to do the latter: in recent years, low inflation rates have proved remarkably resilient, even following round after round of quantitative easing. Three trends explain why. First, technological innovation has driven down consumer prices and globalization has kept wages from rising. Second, the recurring financial panics of the past few decades have encouraged many lower-income economies to increase savings — in the form of currency reserves — as a form of insurance. That means they have been spending far less than they could, starving their economies of investments in such areas as infrastructure and defense, which would provide employment and drive up prices. Finally, throughout the developed world, increased life expectancies have led some private citizens to focus on saving for the longer term (think Japan). As a result, middle-aged adults and the elderly have started spending less on goods and services. These structural roots of today’s low inflation will only strengthen in the coming years, as global competition intensifies, fears of financial crises persist, and populations in Europe and the United States continue to age. If anything, policymakers should be more worried about deflation, which is already troubling the eurozone.

There is no need, then, for central banks to abandon their traditional focus on keeping demand high and inflation on target. Cash transfers stand a better chance of achieving those goals than do interest-rate shifts and quantitative easing, and at a much lower cost. Because they are more efficient, helicopter drops would require the banks to print much less money. By depositing the funds directly into millions of individual accounts — spurring spending immediately — central bankers wouldn’t need to print quantities of money equivalent to 20 percent of GDP.

The transfers’ overall impact would depend on their so-called fiscal multiplier, which measures how much GDP would rise for every $100 transferred. In the United States, the tax rebates provided by the Economic Stimulus Act of 2008, which amounted to roughly one percent of GDP, can serve as a useful guide: they are estimated to have had a multiplier of around 1.3. That means that an infusion of cash equivalent to two percent of GDP would likely grow the economy by about 2.6 percent. Transfers on that scale — less than five percent of GDP — would probably suffice to generate economic growth.

LET THEM HAVE CASH

Using cash transfers, central banks could boost spending without assuming the risks of keeping interest rates low. But transfers would only marginally address growing income inequality, another major threat to economic growth over the long term. In the past three decades, the wages of the bottom 40 percent of earners in developed countries have stagnated, while the very top earners have seen their incomes soar. The Bank of England estimates that the richest five percent of British households now own 40 percent of the total wealth of the United Kingdom — a phenomenon now common across the developed world.

To reduce the gap between rich and poor, the French economist Thomas Piketty and others have proposed a global tax on wealth. But such a policy would be impractical. For one thing, the wealthy would probably use their political influence and financial resources to oppose the tax or avoid paying it. Around $29 trillion in offshore assets already lies beyond the reach of state treasuries, and the new tax would only add to that pile. In addition, the majority of the people who would likely have to pay — the top ten percent of earners — are not all that rich. Typically, the majority of households in the highest income tax brackets are upper-middle class, not superwealthy. Further burdening this group would be a hard sell politically and, as France’s recent budget problems demonstrate, would yield little financial benefit. Finally, taxes on capital would discourage private investment and innovation.

There is another way: instead of trying to drag down the top, governments could boost the bottom. Central banks could issue debt and use the proceeds to invest in a global equity index, a bundle of diverse investments with a value that rises and falls with the market, which they could hold in sovereign wealth funds. The Bank of England, the European Central Bank, and the Federal Reserve already own assets in excess of 20 percent of their countries’ GDPs, so there is no reason why they could not invest those assets in global equities on behalf of their citizens. After around 15 years, the funds could distribute their equity holdings to the lowest-earning 80 percent of taxpayers. The payments could be made to tax-exempt individual savings accounts, and governments could place simple constraints on how the capital could be used.

For example, beneficiaries could be required to retain the funds as savings or to use them to finance their education, pay off debts, start a business, or invest in a home. Such restrictions would encourage the recipients to think of the transfers as investments in the future rather than as lottery winnings. The goal, moreover, would be to increase wealth at the bottom end of the income distribution over the long run, which would do much to lower inequality.

Best of all, the system would be self-financing. Most governments can now issue debt at a real interest rate of close to zero. If they raised capital that way or liquidated the assets they currently possess, they could enjoy a five percent real rate of return — a conservative estimate, given historical returns and current valuations. Thanks to the effect of compound interest, the profits from these funds could amount to around a 100 percent capital gain after just 15 years. Say a government issued debt equivalent to 20 percent of GDP at a real interest rate of zero and then invested the capital in an index of global equities. After 15 years, it could repay the debt generated and also transfer the excess capital to households. This is not alchemy. It’s a policy that would make the so-called equity risk premium — the excess return that investors receive in exchange for putting their capital at risk — work for everyone.

MO’ MONEY, FEWER PROBLEMS

As things currently stand, the prevailing monetary policies have gone almost completely unchallenged, with the exception of proposals by Keynesian economists such as Lawrence Summers and Paul Krugman, who have called for government-financed spending on infrastructure and research. Such investments, the reasoning goes, would create jobs while making the United States more competitive. And now seems like the perfect time to raise the funds to pay for such work: governments can borrow for ten years at real interest rates of close to zero.

The problem with these proposals is that infrastructure spending takes too long to revive an ailing economy. In the United Kingdom, for example, policymakers have taken years to reach an agreement on building the high-speed rail project known as HS2 and an equally long time to settle on a plan to add a third runway at London’s Heathrow Airport. Such large, long-term investments are needed. But they shouldn’t be rushed. Just ask Berliners about the unnecessary new airport that the German government is building for over $5 billion, and which is now some five years behind schedule. Governments should thus continue to invest in infrastructure and research, but when facing insufficient demand, they should tackle the spending problem quickly and directly.

If cash transfers represent such a sure thing, then why has no one tried them? The answer, in part, comes down to an accident of history: central banks were not designed to manage spending. The first central banks, many of which were founded in the late nineteenth century, were designed to carry out a few basic functions: issue currency, provide liquidity to the government bond market, and mitigate banking panics. They mainly engaged in so-called open-market operations — essentially, the purchase and sale of government bonds — which provided banks with liquidity and determined the rate of interest in money markets. Quantitative easing, the latest variant of that bond-buying function, proved capable of stabilizing money markets in 2009, but at too high a cost considering what little growth it achieved.

A second factor explaining the persistence of the old way of doing business involves central banks’ balance sheets. Conventional accounting treats money — bank notes and reserves — as a liability. So if one of these banks were to issue cash transfers in excess of its assets, it could technically have a negative net worth. Yet it makes no sense to worry about the solvency of central banks: after all, they can always print  more money.

The most powerful sources of resistance to cash transfers are political and ideological. In the United States, for example, the Fed is extremely resistant to legislative changes affecting monetary policy for fear of congressional actions that would limit its freedom of action in a future crisis (such as preventing it from bailing out foreign banks). Moreover, many American conservatives consider cash transfers to be socialist handouts. In Europe, which one might think would provide more fertile ground for such transfers, the German fear of inflation that led the European Central Bank to hike rates in 2011, in the middle of the greatest recession since the 1930s, suggests that ideological resistance can be found there, too.

Those who don’t like the idea of cash giveaways, however, should imagine that poor households received an unanticipated inheritance or tax rebate. An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s control. Although the gift may come from a family member, in financial terms, it’s the same as a direct money transfer from the government. Poor people, of course, rarely have rich relatives and so rarely get inheritances — but under the plan being proposed here, they would, every time it looked as though their country was at risk of entering a recession.

Unless one subscribes to the view that recessions are either therapeutic or deserved, there is no reason governments should not try to end them if they can, and cash transfers are a uniquely effective way of doing so. For one thing, they would quickly increase spending, and central banks could implement them instantaneously, unlike infrastructure spending or changes to the tax code, which typically require legislation. And in contrast to interest-rate cuts, cash transfers would affect demand directly, without the side effects of distorting financial markets and asset prices. They would also would help address inequality — without skinning the rich.

Ideology aside, the main barriers to implementing this policy are surmountable. And the time is long past for this kind of innovation. Central banks are now trying to run twenty-first-century economies with a set of policy tools invented over a century ago. By relying too heavily on those tactics, they have ended up embracing policies with perverse consequences and poor payoffs. All it will take to change course is the courage, brains, and leadership to try something new.

http://www.zerohedge.com/news/2014-08-26/it-begins-council-foreign-relations-proposes-central-banks-should-hand-consumers-cas

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