Deutsche Bundesbank Had to Leave 1200 Tons of Gold in NY, they still can't go in and check or count the gold.

Deutsche Bundesbank Had to Leave 1200 Tons of Gold in NY, they still can't go in and check or count the gold. HT: Cryptogon. Source: Norberthaering.

With big fanfare, Deutsche Bundesbank announced on February 9 that ahead of plan they had repatriated 300 tons of gold from New York. This put a positive spin on a rather disturbing fact –1236 tons of gold that is supposed to be part of Germany’s currency reserve will continue to be kept outside of German control in New York – indefinitely.

The German gold in question is being kept in storage at the New York Fed, an institution that is owned and controlled by Wall-Street-banks, in a country, whose current president considers it an imposition that the law and so-called judges tell him what he is allowed to do and not allowed to do.

I am not criticizing the Bundesbank for storing 37 percent of Germany’s official gold in in a place there it has no control over it. It seems clear that they negotiated hard with the US and acted rather shrewdly. Their negotiation position was much enhanced in 2012 by the leakage of a report of the German Court of Auditors, which was very critical of the conditions under which German gold was being held in New York. This created public and political pressure on the Bundesbank to renegotiate and to get that gold out of New York. At the same time, the US-side could hardly afford to snub this demand, because there was lots of speculation, even in the US, that something was amiss with the gold reserves of the US and the rest of the world that were stored in the country. 

The way in which the official gold of the US, and the gold held in custody for other countries, is guarded against public scrutiny and shielded from its owners, gives fodder to any number of conspiracy theories. Had the New York Fed refused to let a foreign central bank, which was under such obvious pressure, retrieve some of their gold, these conspiracy theories around official gold might very well have become intense enough to damage trust in the dollar.

Reaching an agreement was apparently not easy. On the way, the Bundesbank announced a relocation plan for the next three years and then, very soon, superseded it by anouther one that allowed time until 2020 for finishing the intended relocations. First they said they were going to publish the report of the auditors, then they didn’t. This kind of behavior would not be expected if the semi-official story (from unnamed sources) was true, that the Bundesbank just had to say how much gold they wanted at what time and the Fed would have put it at the gate at that time with no further questions asked.

The Dutch Get in the Way

According to its (second) gold relocation and storage plan, unveiled in early 2013, the Bundesbank will be storing half of Germany’s gold reserves in its own vaults in Frankfurt am Main by 2020. This required a transfer to Frankfurt am Main of 300 tons of gold from New York and 283 tons of gold from Paris. 1236 tons will continue to be kept in storage in New York, plus (a much more reasonable) 432 tons in London.

In the summer of 2013 Bundesbank started with a first transport of 5 tons of gold to Frankfurt and then stopped the transports again right away. In hindsight, a plausible explanation for this unusual behavior could be a when secret repatriation program of the Dutch central bank, which was only made public when it was concluded in 2014. 

Apparently, the Dutch came out and said something like “If the Germans are allowed to take out their gold, we want to have our’s too.” This created the threat that more and more countries would use the precedent of the Fed’s lenience with the Germans to demand getting back their own gold. 

The withdrawals were halted until a plan was in place of how everybody could be treated the same and nobody could take out too much gold. Judging from what the Germans and the Dutch did, the scheme seems to be that the US will allow central banks to repatriate as much gold from New York as is absolutely necessary to allow them to have half of their gold at home.

After that was settled, the Dutch were first to be allowed to withdraw their allotment. They were finished in late summer 2014. The Bundesbank managed to get 85 tons out in the rest of the year. In 2015, another as yet unknown institution besides the Bundesbank withdraw gold -30 tons overall. The Bundesbank got 99 tons back. 

In 2016, finally, Bundesbank was alone in withdrawing gold from New York. This might explain why the Fed was more forthcoming than the Bundesbank had expected and handed out the final 111 tons of their 300-ton-allotment.

A hiden message

When the Bundesbank had announced their plan of where to keep how much gold in the future, it was craftily sold as a message to the German people and politicians that they would get a chunk of the gold that was in New York under their control and store half of the official German gold in Germany. This, however, was not the main message.


The main message had New York and Washington as addressees. It consisted in the promise that in exchange for getting those 300 tons, they would leave four times as much in New York and stop forever fussing about it. This is my reading anyway, based on what I understand is usual diplomatic custom and lingo in such affairs. 

This way of reading it is bolstered by the fact that the conveniently critical Court of Auditors has gone completely silent since the Bundesbank announced their new plan for where to store the gold. 

This is not what one should have expected. None of the concerns of the auditors has been addressed in any significant way. The Bundesbank can still not go in and check or count the gold. There are still the terms and conditions of the New York Fed, which say that they give no guarantee. 

If it should turn out that the gold has been stolen in some mysterious way, that’s bad luck. None of the other problems were fixed and no convincing reason was provided why it should be in Germany’s interest to keep such a large portion of its gold outside its control. The fact that a fifth of the gold that used to be kept in New York under such unfavorable conditions has been retrieved, is not a very convincing reason for the auditors to fall completely silent. After all, they had clearly said that the way that the German national treasure is stored there, is against the law. Read the full story Here.

'CHANGE' - US Gold Reserves shrink as Europe's Banks Seek Financial Independence.

'CHANGE' - US Gold Reserves shrink as Europe's Banks Seek Financial Independence. (SP).

European Central banks keep demanding the return of their gold bullion from the vaults of the Federal Reserve Bank of New York, reducing the gold stockpile kept under the streets of Manhattan to its lowest level in decades; economist Lew Rockwell is convinced that the move is an indication that Europe is desperately striving for independence. Read the full story here.

Did the Fed Reserve Launder $141 Billion Dollars Through Belgium to Hide Massive Increase In Quantitative Easing?

Did the Fed Reserve Launder $141 Billion Dollars Through Belgium to Hide Massive Increase In Quantitative Easing? HT: WashingtonsBlog.

That’s what former Assistant Treasury Secretary and Wall Street Journal editor Paul Craig Roberts alleges:

Is the Fed “tapering”? Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014?
***
From November 2013 through January 2014 Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds. Somehow Belgium came up with enough money to allocate during a 3-month period 29 percent of its annual GDP to the purchase of US Treasury bonds. 

Certainly Belgium did not have a budget surplus of $141.2 billion. Was Belgium running a trade surplus during a 3-month period equal to 29 percent of Belgium GDP? 

No, Belgium’s trade and current accounts are in deficit. 

Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?
No, Belgium is a member of the euro system, and its central bank cannot increase the money supply. 

So where did the $141.2 billion come from?
There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases during November 2013 through January 2014 were $112 billion per month. 

In other words, during those 3 months there was a sharp rise in bond purchases by the Fed. The Fed’s actual bond purchases for those three months are $27 billion per month above the original $85 billion monthly purchase and $47 billion above the official $65 billion monthly purchase at that time.
***
Why did the Federal Reserve have to purchase so many bonds above the announced amounts and why did the Fed have to launder and hide the purchase?
Some country or countries, unknown at this time, for reasons we do not know dumped $104 billion in Treasuries in one week.

And see this:

China's Official Press Agency Calls For New Reserve Currency, And New World Order.

China's Official Press Agency Calls For New Reserve Currency, And New World Order.HT: ZeroHedge.

We assume it is a coincidence that on the day in which we demonstrate China's relentless appetite for gold, driven by what we and many others believe is the country's desire to have a call option on a gold-backed reserve currency when the time comes, just posted in China's official press agency, Xinhua, is an op-ed by writer Liu Chang in which he decries the "US fiscal failure which warrants a de-Americanized world" and flatly states that the world should consider a new reserve currency "that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States."

Of course, if China were serious, and if the world were to voluntarily engage in such a (r)evolutionary reserve currency transition, then all Magic Money Tree theories that the only thing better than near infinite debt is beyond infinite debt, would promptly be relegated to the historic dust heap of idiotic theories where they belong.

Some of China's (which as a reminder is the single largest offshore holder of US Treasury paper, and the second largest of all only second naturally to the Federal Reserve whose $85 billion in monthly monetizing "flow" is what is keeping rates from exploding higher) thoughts as captured in the Xinhua Op-ed:

• Reform of the world’s financial system should include the introduction of a new internatonal reserve currency to replace the U.S. dollar
• The international community could thus permanently stay away from the spillover of intensifying domestic political turmoil in the U.S.
• Fiscal impasse in the U.S. is a good time for “befuddled world” to start considering building a “de-Americanized world”
• Impasse has left many nations’ dollar assets in jeopardy and the international community agonized
• Other cornerstones should be laid to underpin a de-Americanized world, including respect for sovereignty, recognizing authority of UN in handling global hotspot issues and giving developing and emerging market economies more say in major international financial institutions
• Purpose of such changes is not to “completely toss the United States aside,” rather to encourage Washington to play a much more constructive role in addressing global affairs

Of course, if and when the day comes that the USD is no longer the reserve currency, kiss America's superpower, or any power, status, which is now based purely on the USD's reserve currency status, and the ability to fund half the US budget deficit with debt promptly monetized by the Fed, goodbye.

The Biggest Ponzi Scheme In The History Of The World

The Biggest Ponzi Scheme In The History Of The World.HT: The Economic Collapse blog By Michael Snyder.

Did you know that you are involved in the most massive Ponzi scheme that has ever existed?  To illustrate my point, allow me to tell you a little story.

Once upon a time, there was a man named Sam.  When he was younger, he had been a very principled young man that had worked incredibly hard and that had built a large number of tremendously successful businesses. 

He became fabulously wealthy and he accumulated far more gold than anyone else on the planet.  But when he started to get a little older he forgot the values of his youth.  He started making really bad decisions and some of his relatives started to take advantage of him.  One particularly devious relative was a nephew named Fred.  One day Fred approached his uncle Sam with a scheme that his friends the bankers had come up with.  What happened next would change the course of Sam's life forever.

Even though Sam was the wealthiest man in the world by far, Fred convinced Sam that he could have an even higher standard of living by going into a little bit of debt. 

In exchange for IOUs issued by his uncle Sam, Fred would give him paper notes that he printed off on his printing press.  Since the paper notes would be backed by the gold that Sam was holding, everyone would consider them to be valuable.  Sam could take those paper notes and spend them on whatever his heart desired.  Uncle Sam started to do this, and he started to become addicted to all of the nice things that those paper notes would buy him.

Fred took the IOUs that he received from his uncle and he auctioned them off to the bankers.  But there was a problem. 

The IOUs issued by Uncle Sam had to be paid back with interest.  When the time came to pay back the IOUs, Uncle Sam could not afford to pay back the debts, pay the interest on those debts, and buy all of the nice things that he wanted.  So Uncle Sam issued even more IOUs than before so that he could get enough notes to pay off his debts.  As time rolled on, this pattern just kept on repeating.  Uncle Sam repeatedly paid off his old debts by taking out even larger new debts.

Meanwhile, since the notes that Uncle Sam was using were backed by gold, everyone else in the world decided to start using them to trade with one another. 

This was greatly beneficial to Uncle Sam, because the rest of the world was glad to send him oil, home electronics, plastic trinkets and anything else that Uncle Sam wanted in exchange for his gold-backed notes.
Eventually, however, the rest of the world started to suspect that the number of gold-backed notes that Uncle Sam was issuing far exceeded the amount of gold that Uncle Sam actually had.  So the rest of the world started to trade in their notes for gold.

And by that time Uncle Sam definitely did not have enough gold to back up his notes. 

Realizing that the scheme was starting to collapse, one day Uncle Sam announced that his notes would no longer be backed by gold.  But he insisted that the rest of the world should continue using his notes because he was the wealthiest man on the planet and everyone should just trust him.

And the rest of the world did continue to trust him, although it wasn't the same as before.

As Uncle Sam got greedier and greedier, he started to issue IOUs and spend notes at a rate that nobody ever dreamed possible.  The great businesses that Uncle Sam had built when he was younger were starting to decline, and Uncle Sam started buying far more stuff from the rest of the world than they bought from him.  The rest of the world was still glad to take Uncle Sam's notes because they used them to trade with one another, but they started accumulating far more notes than they actually needed.

Not sure exactly what to do with mountains of these notes, the rest of the world started to loan them back to Uncle Sam. 

It eventually got to the point where Uncle Sam owed the rest of the world trillions of these notes.  Even though the notes were losing value at a rate of close to 10 percent a year, Uncle Sam somehow convinced the rest of the world to loan him notes at an average rate of interest of less than 3 percent a year.

One day Uncle Sam woke up and realized that the amount of debt that he owed was now more than 5000 times larger than it was when Fred had first approached him with this ill-fated scheme. 

Uncle Sam now owed more than 16 trillion notes to his creditors, and Uncle Sam had already made future financial commitments of 202 trillion notes that he would never be able to pay.  Meanwhile, the notes that Fred had been printing up for Uncle Sam were now worth less than 5 percent of their original value.  Uncle Sam was becoming concerned because some of his other relatives were warning that this whole scheme was about to collapse.

Sadly, Uncle Sam did not listen to them. 

Uncle Sam knew that if he admitted how fraudulent the financial scheme was, the rest of the world would quit sending him all of the things that he needed in exchange for his notes and they would quit lending his notes back to him at super low interest rates.

And if the rest of the world lost confidence in his notes and quit using them, Uncle Sam knew that his standard of living would go way, way down. 

That was something that Uncle Sam could not bear to have happen.

When a financial crisis almost caused the scheme to crash in 2008, a desperate Uncle Sam went to Fred and asked for help. 

In response, Fred started printing up far more notes than ever before and started directly buying up large amounts of IOUs from Uncle Sam with the notes that he was creating out of thin air.  Fred hoped that the rest of the world would not notice what he was doing.

It seemed to work for a little while, but then an even worse financial crisis came along. 

Once again, Uncle Sam started issuing massive amounts of new IOUs and Fred started printing up giant mountains of new notes to try to fix things, but their desperate attempts to keep the system going were to no avail.  The rest of the world started to realize that they had been sucked into a massive Ponzi scheme, and they lost confidence in the notes that Uncle Sam was using.  Suddenly nobody wanted to lend notes to Uncle Sam at super low interest rates anymore, and people started asking for far more notes in exchange for the things that Uncle Sam wanted.

Uncle Sam's standard of living dropped dramatically. 

Since he could no longer flood the world with his notes, Uncle Sam could not continue to consume far, far more wealth than he produced.  Uncle Sam sunk into a deep depression as he watched the scheme fall apart all around him.

Uncle Sam had once been the wealthiest man on the entire planet, but now he was a broke, tired old man that was absolutely drowning in debt. 

Unfortunately, once he was down on his luck the rest of the world did not have any compassion for him.  In fact, much of the rest of the world celebrated the downfall of Uncle Sam.
All of this could have been avoided if Uncle Sam had never agreed to Fred's crazy scheme.  And once Uncle Sam made the decision to stop backing his notes with gold, it was only a matter of time before the scheme was going to collapse.

Does this little story sound crazy to you? 

It shouldn't.  The truth is that you are involved in such a scheme right now.  In case you haven't figured it out, "Uncle Sam" is the United States, the "notes" are U.S. dollars, and "Fred" is the Federal Reserve.
Please share this story with as many people as you can.  Our country is headed for complete and total financial disaster, and we need to get people educated about this while there is still time.


“Thousands” Are Withdrawing Their Money; ALERT IN THE SOUTHERN EUROPEAN COUNTRIES.

Flashback: Video - Max Keiser talks to David Smith: "The Mother of All Collapses: Wall St. Witches and Alice in Switzer-land."



Related: CHAOS IN CYPRUS: “Thousands” Are Withdrawing Their Money; ALERT IN THE SOUTHERN EUROPEAN COUNTRIES – Cyprus-Rescue Shows, Bank Accounts Are NOT Safe!

Scam Complete: The US Government Takes A Page From Diocletian’s Book.

Scam Complete: The US Government Takes A Page From Diocletian’s Book.(SovereignManblog).By Simon Black.

Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.

This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.
I thought of Diocletian’s desperation a few days ago when I read about the recent sanctions imposed on US rating agency Egan-Jones. It’s a similar story–
For years, major rating agencies (S&P, Moody’s, and Fitch) have championed the outright fraud of our financial system by pinning pristine credit ratings on insolvent governments and their heavily inflated currencies.
In doing so, the rating agencies are effectively claiming that the greatest debtor that has ever existed in the history of the world is nearly ‘risk-free’.
Clearly this is a ridiculous assertion. With a debt level over 100% of GDP, the US is so broke that the government must borrow money just to pay interest on the money it’s already borrowed. They’ve lost over a trillion dollars a year since 2008, yet they still spend money on things like drones and body scanners. It’s crazy.
As with any good scam, the government must maintain public confidence. The moment someone says ‘the Emperor has no clothes,’ that shallow, fragile confidence will come crashing down and expose the scam. Dissent must be vigorously and swiftly pursued.
So when S&P finally downgraded the US one notch in August 2011, the SEC and Justice Department announced that S&P was under investigation, just two weeks later.
Egan-Jones, a smaller rating agency, has been even more aggressive, downgrading the US credit rating three times in 18 months. And while the federal government may not have imposed Diocletian’s death penalty, they are just as willing to squash dissent.
In a country that churns out thousands of pages of new regulations each week, it’s easy to find a reason to go after someone. As you read this letter, in fact, you are probably in violation of at least a dozen regulatory offenses.
In the case of Egan-Jones, the SEC brought administrative action against the agency within two weeks of their second downgrade. And a few days ago, the case was settled.
I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.
The lesson here is obvious. Just as in Roman times, bankrupt nations today will stop at nothing to keep up the scam just a little bit longer.
Given that all this is happening at a time when Congress is voting to suspend the debt ceiling entirely, these actions are the clearest sign yet of just how desperate the government has become.
Could the warning signs be any more obvious?Hmmmm.....They know their Pyramid scam is crumbling that's why they want your weapons, cause when it does 'explode' they'll have to face 250 million plus angry, hungry and well armed Americans.Hey.... they might even stock up a billion plus hollow point bullets.....Oh wait they have.Read the full story here.

Video - Max Keiser talks to David Smith: "The Mother of All Collapses: Wall St. Witches and Alice in Switzer-land."

Another "Swiss Gold Bars Scam" discovered - Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District.

Another "Swiss Gold Bars Scam" discovered - Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District.(ZH).It is one thing for tungsten-filled gold bars to appear in the UK, or in Germany: after all out of sight, and across the Atlantic, certainly must mean out of mind, and out of the safe. However, when a 10 ounce 999.9 gold bar bearing the stamp of the reputable Swiss Produits Artistiques Métaux Précieux (PAMP, with owner MTP) and a serial number (serial #038892, likely rehypothecated in at least 10 gold ETFs across the world but that's a different story), mysteriously emerges in the heart of the world's jewerly district located on 47th street in Manhattan, things get real quick. Moments ago, Myfoxny reported that a 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit. The discovery was made by the dealer Ibrahim Fadl, who bought the PAMP bar in question from a merchant who has sold him real gold before. "But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold. The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce."

What makes so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up. That is a sophisticated operation.
MTB, the Swiss manufacturer of the gold bars, said customers should only buy from a reputable merchant. The problem, he admits, is Ibrahim Fadl is a very reputable merchant.
Raymond Nessim, CEO Manfra, Tordell & Brookes, said he has reported the situation to the FBI and Secret Service.
The Secret Service, which deals with counterfeits, said it is investigating.

And cue panic on the realization that virtually any gold bar in the world, not just those in Europe and Australia, which have already had close encounters with Tungsten substitutes, but also New York may be hollowed out and have a real worth of a few dollars max. Which, sadly, is fitting considering our main story from last night was the realization that an unknown amount of Chinese iron ore had either never existed or had simply vaporized, and was no longer serving as the secured collateral to various liabilities circulating in the electronic ether. After all, only the most naive out there could conceive of gold being sacrosanct when every other asset class is being diluted to infinity by a regime that has long since run out of money.
As for gold-based transactions on West 47th street: look for that market to grind to a halt at least for as long as it takes for this scandal to be forgotten too.
The only open question remaining will be how much of the gold located 90 feet below Libert 33 is in the same Tungstenized format. For what it's worth: it is unlikely we will ever find out.
This is what glaring gold counterfeiting looks like:

Hmmm.....Flashback: MFS - The Other News - March 26 th :  "Not everything that shines is Gold !" Tungsten Filled 1 kilo Gold Bar Discovered in UK.

Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody.
And here’s what the Chinese allegedly uncovered: Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.

"Gold Confiscation Coming?" - The Terrifying Line in Obama's Speech That Everyone Missed.

"Gold Confiscation Coming?" - The Terrifying Line in Obama's Speech That Everyone Missed.(NI). Obama said he'd create a million new manufacturing jobs, recruit another 100,000 math and science teachers, cut tuition growth in half, and reform the tax code. All by magic, apparently, since he's provided no detailed plans on any of this. But while everyone was picking apart these and other flaws in Obama's speech, they overlooked the most frightening line of all. That was when Obama promised that he'd pursue "the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one." That promise might have made liberal hearts swoon.
But as Amity Shlaes explained in her outstanding history of the era — "The Forgotten Man" — it was precisely FDR's "bold, persistent experimentation" that was largely to blame for the length, depth and severity of the Great Depression.
Convinced that the government had to do something, FDR tinkered and experimented, she said, figuring that if he didn't "get it right the first time ... maybe he'd get it right the second time." But the very arbitrariness of FDR's actions, she found, made it impossible for businesses to make plans. And so, as FDR's bold experiments increased, business activity decreased and markets froze. "From the point of view of a business," Shlaes said in a 2009 interview, "it is annihilating to hear Washington uncertain, and that itself retards recovery because you really don't know what to expect." If Obama wants to conduct experiments, he should get a job as a high school science teacher, and not use the entire nation as guinea pigs, particularly when we already know how his tests will turn out.Hmmmm.........Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States". The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.Read the full story here.

The US Treasury, Federal Reserve and the FDIC Mulling New Gold Regulation; ‘May be biggest event in gold market since US dropped gold standard’

The US Treasury, Federal Reserve and the FDIC Mulling New Gold Regulation; ‘May be biggest event in gold market since US dropped gold standard’.(SR).See also: Bank of International Settlements: Gold Becomes a Tier 1 Asset Class for Banks, A Stabilizing Mechanism‎
Is gold safe or dangerous now?
US authorities have recently called for comment on a rule change that may impact the gold market.
The US Treasury, Federal Reserve and the FDIC have jointly sought comment on changing some capital adequacy rules for when an institution holds gold in its own vaults or in another’s vaults.
According to the draft documents released, when gold is currently held as an asset, it is risk weighted at 15% – that is, a 15% haircut is taken on its current value for capital adequacy calculations. (See page 86 of the attached Federal Reserve document.)
However, in this same document, they are proposing that there be no (zero) discount.
That would then put gold on the same basis as cash.Fans of gold are taking an interest in this potential development. As Greene notes: “It may be one of the most important events in the gold market since the US abandoned the gold standard.”Read the full story here.

Related? Societe Generale: Gold Could Surge Over 500%


Related - Buyer beware ! MFS - The Other News : 

This bar was purchased by staff of a scrap dealer in xxxxx, UK yesterday. The bar appeared to be perfect other than the fact that it was 2gms underweight. It was checked by hand-held xrf and showed 99.98% Au. Being Tungsten, it would not be ferro-magnetic. The bar was supplied with the original certificate. The owner of the business that purchased the bar only became suspicious when he realized the weight discrepancy and had the bar cropped. He estimates between 30-40% of the weight of the bar to be Tungsten.

The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].
This was apparently all highly orchestrated by an extremely well financed criminal operation.

Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody.
And here’s what the Chinese allegedly uncovered:
Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.Read the full story here.

Video - Peter Schiff - The Fed Unspun.

During a lecture entitled "The Fed Unspun: The Other Side of the Story", Schiff responded to Bernake's recent four-part college lecture series, rebutting many of the Federal Reserve Chairman's claims about the cause of the housing crisis, the role of the Federal Reserve, the value of the gold standard, and more.Read the full story and more here @ KitmanTV.

Nassim "Black Swan" Taleb: Forget the euro crisis... The U.S. is in far worse shape.

Nassim "Black Swan" Taleb: Forget the euro crisis... The U.S. is in far worse shape.(Bloomberg).Nassim Taleb, author of "The Black Swan," said he favors investing in Europe over the U.S. even with the possible breakup of the single European currency in part because of the euro area's superior deficit situation. Europe's lack of a centralized government is another reason it's preferable to invest in the region, said Taleb, a professor of risk engineering at New York University whose 2007 best- selling book argued that history is littered with rare events that can't be predicted by trends. A breakup of the euro "is not a big deal," Taleb said yesterday at an event in Montreal hosted by the Alternative Investment Management Association. "When they break it up, there will be a lot of fun currencies. This is why I am not afraid of Europe, or investing in Europe. I'm afraid of the United States."
The budget deficit as a proportion of gross domestic product in the U.S. amounted to 8.2 percent at the end of 2011, government figures show. That's twice the 4.1 percent ratio for euro-region countries, according to data compiled by Bloomberg. "Of course Europe has its problems, but it's in much better shape than the United States," Taleb said. He voiced similar concerns about U.S. prospects at a conference in Tokyo in September. Yields on two-year Treasury notes were little changed at 0.285 percent at 9:19 p.m. New York time yesterday, while yields on five-year notes dropped more than one basis point to 0.761 percent. Interest Rates Rising interest rates would make things worse for the U.S., said Taleb, a principal at hedge fund Universa Investments LP who also serves as an adviser to the International Monetary Fund. "We have zero interest rates," Taleb said. "If interest rates go up in the United States, you can imagine what the deficit would be. Europe is like someone who is ill but is conscious of it. In the United States we are ill, but we don't know it. We don't talk about it." Europe's lack of a centralized government works in its favor, he said. "The best thing Europe ever did is managing to have members bickering with each other, so you don't have the big government," Taleb said. "Centralized government doesn't work. In Europe they tried to have a powerful Brussels, but what happens when you have a powerful Brussels? You have lobbies hijacking Brussels."Read the full story here.

President Obama filling the Federal Reserve board with "Fat Cat Bankers"?

President Obama filling the Federal Reserve board with "Fat Cat Bankers"?(Cato).By Mark A. Calabria.
Tomorrow the Senate Banking Committee will likely hold a vote on President Obama’s recent nominations to the Federal Reserve Board, Harvard professor Jeremy Stein and former investment banker and Treasury official Jerome Powell. I’ve written elsewhere on how these two fail to meet the statutory requirements for board membership, as it relates to geography. But there is another issue that continues to bother me about these nominations. That is the unwritten assumption that Wall Street gets a seat on the Federal Reserve Board.

As Bloomberg reports Powell “would bring expertise on financial markets to the Fed’s board, filling a void left by Kevin Warsh, a former Morgan Stanley banker.” But this overlooks the fact that the New York Federal Reserve President, currently former Goldman Exec William Dudley, is a permanent member of the Fed’s Federal Open Market Committee (FOMC). As an institutional matter, the Fed already has a line from Wall Street via the New York Fed, where’s the need for another?

The Federal Reserve Act requires the president, when making nominations to the Fed, to give “due regard to a fair representation of the financial, agricultural, industrial, and commercial interests.” As far as I can tell there is zero representation on the Board for “agricultural, industrial and commercial interests” and already one former banker (Duke) on the Board. How is that “fair?” While this “fairness” requirement is not as black and white as the geography issue, I do believe it is one fundamental to the functioning of the Fed. Is this a Fed that represents all sectors and interests in the economy, or is this a Fed that mainly represents Wall Street (and academia, which is never mentioned in the Federal Reserve Act)?

While I do not personally know Mr. Powell, and I have no reason to suspect he is anything other than an honorable and well-intended man, I think we all have reason to believe that the last thing the Fed needs is another New York investment banker.Read the full story here.

"Not everything that shines is Gold !" Tungsten Filled 1 kilo Gold Bar Discovered in UK.

"Not everything that shines is Gold !"Tungsten Filled 1 kilo Gold Bar Discovered in UK.(SD).Australian Bullion Dealer ABC Bullion has contacted SD to advise that one of its suppliers has provided them photographic evidence of a tungsten filled 1 kilo gold bar discovered this week. The bar passed a hand-held xrf scan which showed 99.98% pure AU. The tungsten was only discovered when the bar was physically cut in half. After numerous reports of 400oz tungsten filled bars being discovered in Hong Kong, this is the first documented and verified report with photographic evidence that has been made public.
Submitted by Australian Bullion Dealer ABC Bullion:
Attached are photographs of a legitimate Metalor 1000gm Au bar that has been drilled out and filled with Tungsten (W). This bar was purchased by staff of a scrap dealer in xxxxx, UK yesterday. The bar appeared to be perfect other than the fact that it was 2gms underweight. It was checked by hand-held xrf and showed 99.98% Au. Being Tungsten, it would not be ferro-magnetic. The bar was supplied with the original certificate. The owner of the business that purchased the bar only became suspicious when he realized the weight discrepancy and had the bar cropped. He estimates between 30-40% of the weight of the bar to be Tungsten.

The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].
This was apparently all highly orchestrated by an extremely well financed criminal operation.

Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody.
And here’s what the Chinese allegedly uncovered:
Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.Read the full story here.

Switzerland Wants Its Gold Back From The New York Fed.......................

Switzerland Wants Its Gold Back From The New York Fed..............(ZeroHedge).Earlier today, Zerohedge reported that Germans are increasingly concerned that their gold, at over 3,400 tons a majority of which is likely stored in the vault 80 feet below street level of 33 Liberty (recently purchased by the Fed with freshly printed money at far higher than prevailing commercial real estate rates for the Downtown NY area), may be in jeopardy,and will likely soon formally inquire just how much of said gold is really held by the Fed.
As it turns out, Germany is not alone: as part of the "Rettet Unser Schweizer Gold", or the “Gold Initiative”: A Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves initiative, launched recently by four members of the Swiss parliament, the Swiss people should have a right to vote on 3 simple things:

i) keeping the Swiss gold physically in Switzerland;

ii) forbidding the SNB from selling any more of its gold reserves, and

iii) the SNB has to hold at least 20% of its assets in gold.

Needless the say the implications of this vote actually succeeding are comparable to the Greeks holding a referendum on whether or not to be in the Eurozone. And everyone saw how quickly G-Pap was "eliminated" within hours of making that particular threat.
Yet it begs the question: how many more international grassroots outcries for if not repatriation, then at least an audit of foreign gold held by the New York Fed have to take place, before Goldman's (and New York Fed's) Bill Dudley relents? And why are the international central banks not disclosing what their people demand, if only to confirm that the gold is present and accounted for, even if it is at the Federal Reserve?Read the full story here.

Why Were The $ Six Trillions In Fake Bonds Held In Chicago Fed Crates?

Why Were The $ Six Trillions In Fake Bonds Held In Chicago Fed Crates?(PoorRichardsB).By Tyler Durden.While there is precious little in terms of detail coming out of the latest and literally greatest "fake" bond story in history, the BBC has been kind enough to release the pictures of the boxes that the supposedly fake bonds were contained in. While we reserve judgment on the authenticity of the bonds, what we wonder is whether the boxes were also fake. Because while we can understand why someone would counterfeit the Treasury paper itself, what we don't get is why someone would go the extra effort to also create a "fake" compartment in which to store it. In this case a compartment that is property of the "CHICAGO FEDERAL RESERVE SYSTEM." Perhaps Fed uberdove and Chicago Fed President Charles Evans will be kind enough to explain why Versailles Treaty Chicago Fed crates are floating around in Europe (and filled with $6 trillion in supposedly fake bearer bonds)?Read the full story here.

The Federal Reserve’s Explicit Goal: Devalue The Dollar 33%

The Federal Reserve’s Explicit Goal: Devalue The Dollar 33%.(BI).The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.
The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of Americans’ hard earned savings over the next 4 years.
Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:
“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling — a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”In other words, a gradual destruction of the dollar’s value is the best the FOMC can do.Here’s why: First, the Fed believes that manipulation of interest rates and the value of the dollar can reduce unemployment rates.The results of the past 40 years say the opposite.
The Fed’s finger prints in the form of monetary manipulation are all over the dozen financial crises and spikes in unemployment we have experienced since abandoning the gold standard in 1971. The financial crisis of 2008, caused in no small part by the Fed’s efforts to stimulate the economy by keeping interest rates too low for, as it turned out, way too long is but the latest example of the Fed failing to fulfill its mandate to achieve either price stability or full employment.
The Fed’s most recent experience with Quantitative Easing also belies the entire notion that monetary manipulation can spur the economy. Between November 2010 and June 2011, the Fed tried to spur economic growth by purchasing $600 billion in Treasury securities, flooding the banking system with reserves and keeping interest rates low. In response the economy, which had been growing at a 3.4% annual rate, slowed to a 1% annual rate in the first half of 2011. Once the Fed stopped supplying all of that liquidity, economic growth in the second half of the year accelerated to a 2.3% annual rate.
Second, the Fed does not use real time indicators of the price level. Instead, it views inflation through the rear view mirror of the trailing increases in the PCE. And, even when it had evidence of rising inflation — as it did in the first quarter of last year — it chose to temporize, betting that the spike in inflation would prove temporary.This spike in inflation did prove temporary, as Fed Chairman Bernanke predicted at the time, but not for the reasons — a slack economy — that he cited. Instead, the growing debt crisis in Europe led to a massive shift in deposits out of the euro and into the dollar — an event totally out of the Fed’s control. Yet, this increase in the demand for dollars was far more important than any action taken by the Fed because it increased the value of the dollar and produced a slowdown in the inflation rate.
What we are left with is a trial and error monetary system that depends on the best judgment of 19 men and women who meet every six weeks around a big table at the Federal Reserve in Washington. At the end of a day and a half of discussions, 11 of them vote on what to do next. The error the members of the FOMC fear most when they vote is deflation. So, they have built in a 2% margin of error.
Given the crudeness of the tools the FOMC uses to set monetary policy, allowing for such a margin of error is no doubt prudent. For example, when the economy slowed in the first half of last year, inflation picked up, accelerating to a 6.1% annual rate during the second quarter. And, when the economic growth accelerated in the second half, inflation slowed. These results are the precise opposite of what the Fed’s playbook says are supposed to happen.
The best the Fed can do — an average debauch in the dollar’s value of 2% a year while producing recurring financial crises and a more cyclical economy — is demonstrably inferior to the results produced by the classical gold standard. Here’s just one example. The largest gold discovery of modern times set off the 1849 California gold rush and increased the supply of gold in the world faster than the increase in the output of goods and services. The price level in the US did increase by12.4 percent over the next 8 years. That translates into an average of just 1.5% a year. The gold standard at its worst was better than the best the Fed now promises to do with the paper dollar.
The Fed’s best is hardly good enough. The time has arrived for the American people to demand something far better — a dollar as good as gold.
Regards,
Charles Kadlec,
for The Daily Reckoning.

MFS - The Other News

                    Morning Posting.

• Updated !Earthquakes in the last 24 hours in the world seismic activity situation Chile 5.2   !More info here.

• Obama Administration gives up on detained American journalist Joseph Mayton in Egypt.(Bikyamasr).CAIRO: US Embassy officials refuse to assist detained American journalist, citing security and diplomatic concerns.The American Embassy in Cairo, in communication with detained American journalist and Bikya Masr Editor-in-Chief Joseph Mayton, reported that they cannot help in retrieving Mayton from Egyptian military detention, citing security and diplomatic concerns.“The military has spoke on two specific times to embassy officials, telling them that I can leave when the come and get me,” said Mayton, speaking to Bikyamasr.com staff on Saturday evening.“For two reasons they will not send someone to come get me. First, they say that there is a security situation in the area. Second, they told me that there is a tense diplomatic situation between the US government and the Egyptian security forces,” Mayton explained.“They said they will not send someone until a US security officer gives them the ok. They told me that they are looking at other solutions,” he continued.Meanwhile, the Hungarian embassy has sent a representative to retrieve Mark Fodor, a Hungarian citizen who was also detained today in the Cabinet building.Mayton, who was covering the ongoing violence in Cairo, was assaulted by the military police around 9:30 AM on Saturday morning after a group of citizens surrounded him, questioning why he was there.He was brought to the Cabinet building, where he has been detained for the past 11 hours.American embassy officials say that they will try to arrange for Mayton’s release on Sunday morning.Hmmm.......In Obama's world American citizens don't seem to count much?Read the full story here.

• Bail-out Bombshell: Fed "Emergency" Bank Rescue Totaled $29 Trillion Over Three Years.(BlacklistedNews).Source:Alternet.While the 99% suffered hardship, a new study shows that the Fed propped up buddies in the banking industry and a vast shadow banking system far beyond what anyone has guessed.Speculation about the the Fed’s actions during the financial crisis has made headlines on and off again over the last several years. The latest drama occurred on November 27 when Bloomberg published an article, “Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress," which gives an account of the news agency’s struggle to bring to light the details of the Fed’s emergency programs. Bloomberg throws out some very large numbers, revealing that as of March 2009, the Fed lent, spent, or committed $7.77 trillion worth of aid to the financial system and that banks used the low interest rates charged on these loans to make an estimated $13 billion in income. On December 6, the Fed struck back, issuing a four page unsigned memo intended to correct recent “egregious errors and mistakes” found in various reports of its emergency lending facilities. The Fed argues that the “total credit outstanding under liquidity programs was never more than about $1.5 trillion.” While Bloomberg wasn’t mentioned explicitly in the Fed memo, it was fairly clear to whom the response was directed. The following day Bloomberg defended its reporting, and the Wall Street Journal’s David Wessel came to the Fed’s defense, characterizing Bloomberg’s methodology as a “great story,” but ultimately not “true.” All this may sound like controversy, but it’s little more than a tempest in a teacup.Here’s the hurricane: In reality, no less than $29.616 trillion is the total emergency assistance provided by the Fed to foreign and domestic entities during the Global Financial Crisis. Let’s repeat that: $29 trillion. This astounding number is over twice U.S. gross domestic product, the nominal value of all goods and services produced for the year 2010. This is the total of the bailout as calculated by Nicola Matthews and myself as part of the Ford Foundation project, A Research And Policy Dialogue Project On Improving Governance Of The Government Safety Net In Financial Crisis. We will be presenting the results of our analysis in a series of papers published by the Levy Economics Institute, the first of which, “29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient,” is already available here. The results we have calculated are presented below, and it is important to note that the totals are cumulative and in billions of U.S. dollars. (The numbers in parentheses indicate amounts still outstanding as of November 10, 2011).Read the full story here.

• The Gospel According To Wright.(AmericanSpectator).By Charles C. Johnson.In 2008 America elected a president whose pastor for 20 years preached anti-Semitic conspiracy theories, advocated bizarre pseudo-scientific racial ideas, opposed interracial marriage, praised communist dictatorships, denounced black "assimilation," and taught Afrocentric feel-good nonsense to schoolchildren. When Americans discovered the Rev. Jeremiah Wright's views during the 2008 campaign, they rightly wondered if Barack Obama, like his pastor, really believed that HIV/AIDS was created by the American government to kill black people. Even to this day, no one knows for sure whether Obama shares the views of Wright, whom the Chicago Sun-Times once described as Obama's "close confidant."Candidate Obama tried to dismiss his support for Wright, telling Charlie Gibson of ABC News, "It's as if we took the five dumbest things that I ever said or you ever said…in our lives and compressed them, and put them out there, you know, I think that people's reaction, would be understandably upset." And rightly so. In sermon after sermon, Wright's radical black nationalist ideas were clearly and emphatically stated. They were not an aberration, but the focal point of Pastor Wright's Trinity United Church of Christ in Chicago, where Obama was an active member for 20 years.Nor has Wright renounced any of his anti-Americanism. In a sermon last September 16 marking the 10th anniversary of 9/11 entitled, "The Day of Jerusalem's Fall," Wright seemed to celebrate white America's comeuppance. "We bombed Hiroshima. We bombed Nagasaki. And we nuked far more than the thousands in New York and the Pentagon--and we never batted an eye!" Wright preached. "We supported state terrorism against the Palestinians and black south Africans and now we are indignant because the stuff we have done overseas is now brought right back into our own front yards." He closed, invoking Malcolm X's statement about the assassination of J.F.K, "America's chickens! Coming home! To roost!" White America, he was saying, had gotten its just deserts.Candidate Obama tried to distance himself from Wright's more damning comments. But, crucially, he didn't disown the pastor himself. In fact, in his rise to political fame, he had made Wright's sermons his own, drawing on Wright's "Audacity to Hope" sermon and appropriating its theme for his political coming-out speech at the Democratic National Convention in Boston in 2004. He even borrowed the sermon's title for his second autobiography, The Audacity of Hope, in a bid to get Wright and other black churches to support his candidacy.The question is why Barack Obama, raised without any faith at all, chose one of the most incendiary preachers in Black America to preach the word of God to him. Wright became, in Obama's words, "like family to me. [Wright] strengthened my faith, officiated my wedding, and baptized my children." Obama told a group of ministers in June 2007 that Wright helped "introduce me to my Christian faith." But what, exactly, is Barack Obama's faith? Just as important, what is Jeremiah Wright's?Read the full story here.

• Outrage over West's Goebbels remark (Obama likening the U.S. to Nazi Germany on NPR remains in memory hole, however).(DougRoss).Please consider this report from The Hill: Dems call on Rep. West to apologize for Joseph Goebbels comparison. Rep. Allen West (R-Fla.) landed in hot water on Friday for his remarks the previous day comparing the Democrats’ proficiency in getting out their message to the notorious head of the Nazi Party’s propaganda department under Hitler.“If Joseph Goebbels was around, he’d be very proud of the Democrat Party, because they have an incredible propaganda machine,” West said Thursday... “Shame on him,” tweeted Rep. Steve Israel (D-N.Y.). “Rep. West needs to apologize now for insulting the memories of the millions who lost their lives during the Holocaust.”Rep. Gary Ackerman (D-N.Y.) also called on West to apologize.Curiously, these Democrat hacks were utterly silent when then-candidate Barack Obama was revealed to have compared the United States to Nazi Germany during an NPR interview.None other than Charles (or the "Chuckster", as he prefers to be known) Johnson of LGF -- then in the patriotic phase of his career -- discovered Obama tarring America as a fascist regime.The audio recording of Barack Obama espousing his socialist philosophy of “redistribution of wealth” is all over the internet and Fox News today (although the other media outlets are ignoring it), but there’s another disturbing section on that tape that has so far escaped notice.The link to the audio is here: Chicago Public Radio - Audio Library: Odyssey.At about 15:30, Obama compares what was going on in the United States during the time of Brown vs. the Board of Education to ... Nazi Germany. Yes, really. Here’s the quote:“...just to take a, sort of a realist perspective...there’s a lot of change going on outside of the Court, um, that, that judges essentially have to take judicial notice of. I mean you’ve got World War II, you’ve got uh, uh, uh, the doctrines of Nazism, that, that we are fighting against, that start looking uncomfortably similar to what we have going on, back here at home.”There you have it. America is close to electing a President that compares his own country to Nazi Germany.Countdown to media analysis of Obama's egregious statements in: 3... 2... never.Read the full story here.
  

• Obama Administration, evidently to appease Muslims May Free Hezbollah Terrorist.(JW).A renowned Hezbollah terrorist in U.S. military custody for murdering five American soldiers in Iraq may soon be released by the Obama Administration, evidently to appease Muslims.The perplexing story was reported recently by a mainstream newspaper that portrays the case as a “dilemma” for the president as American troops prepare to exit Iraq. The Lebanese militant, Ali Mussa Daqduq, has been in U.S. military custody in Iraq since 2007 for his involvement in a carefully orchestrated plot that killed, kidnapped and tortured American military officers.The incident took place in a city called Karbala, south of Baghdad in early 2007. Around a dozen terrorists dressed in U.S. military uniforms opened fire on Americans after approaching a camp in five sports utility vehicles resembling U.S. transports. One U.S. soldier died at the scene and four others were kidnapped, tortured and executed. Daqduq, a Hezbollah commander, was the mastermind.But the Obama Administration can’t decide what to do with him. The president doesn’t want to violate Iraq’s sovereignty by removing Daqduq from the country when the U.S. withdraws at the end of the month. If Iraq is gracious enough to grant the U.S. permission to remove the terrorist so that he can be tried, this presents yet another huge dilemma for Obama.Taking Daqduq to the U.S. Naval base in Guantanamo Cuba, which houses other high-value terrorists, is out of the question because the facility is an anathema in the Middle East, according to the newspaper that broke the story. Furthermore, Iraqi Prime Minister Nuri Kamal al-Maliki would not approve the “unacceptable” Guantanamo option.What to do with this Islamic terrorist who murdered members of our military? Incredibly, releasing him seems to be a very realistic option, according to various news reports. One mainstream outlet says that Daqduq may soon go free,without facing trial. This has outraged some members of Congress who offer the administration a reasonable solution.During a recent Senate Judiciary Committee hearing, one senator insisted Daqduq should go to Guantanamo to be tried before a military commission. Releasing him to the Iraqis would be like letting him go and trying him in a U.S. civilian court would be disastrous, the lawmaker pointed out. The administration already tested that brilliant idea when it proposed trying 9/11 mastermind Khalid Sheikh Mohammed in Manhattan.The Guantanamo option is clearly the most sensible. Last month Judicial Watch was approved by the Department of Defense (DOD) to observe the arraignment of Abd al-Rahim al-Nashiri, the al-Qaeda terrorist charged with orchestrating the 2000 attack on the Navy destroyer USS Cole. JW witnessed a deep commitment to justice by military lawyers as well as al-Nashiri’s topnotch capital defense attorney. Read JW’s Guantanamo coverage here.Hmmmm..........Read the full story here.

• US turns over Hezbollah prisoner to Iraqi government.(TheHill).The U.S. handed over a Hezbollah prisoner suspected of being involved in the deaths of five U.S. soldiers to the Iraqi government Friday, as U.S. troops prepare to leave the country, the White House said.The Obama administration had been pushing Iraq to allow the U.S. to keep Ali Musa Daqduq in U.S. custody, and President Obama discussed it with Iraqi Prime Minister Nouri al-Maliki when he visited the White House Monday, National Security Council spokesman Tommy Vietor said.But the Iraqi government wouldn’t agree to let the U.S. taking Daqduq out of Iraq, and the U.S. legally had to transfer him to Iraqi custody under the security agreement negotiated by the Bush administration in 2008, Vietor said.The decision to hand the last prisoner in U.S. custody over to the Iraqis was blasted by Republicans and Sen. Joe Lieberman (I-Conn.) Friday, who had wanted him transferred to Guantánamo Bay for a military tribunal.A statement from Sen. John McCain (R-Ariz.), Senate Minority Leader Mitch McConnell (R-Ky.), Lieberman and Sen. Lindsey Graham (R-S.C.) called the move “disgraceful.” “Coming on the heels of the Administration's failure to maintain a small American military presence in Iraq to support the fragile peace there, this failure to keep a committed murderer of Americans in U.S. custody sends exactly the wrong message to our allies and enemies in the region,” the statement said.Sen. Saxby Chambliss (R-Ga.), vice chairman of the Senate Intelligence Committee, said: “Given Iraq’s history of releasing detainees, I expect it is only a matter of time before this terrorist will be back on the battlefield.”Vietor said that the administration did not want to send any more detainees to Guantanamo, and the U.S. had discussed transferring him to a U.S. military commission.“The president has been clear that he believes it’s in our national security interest to close the detention facility of Guantanamo Bay, not add to the population,” Vietor said.Vietor said the Iraqis have given assurances to the administration that Daqduq will be tried for his crimes.Daqduq is accused of organizing a 2007 raid in Karbala, Iraq, where five U.S. soldiers were killed. Under the security agreement with Iraq, the U.S. must return all prisoners to Iraqi custody as it leaves the country. The U.S. marked the end of the Iraq war Thursday and is in the process of withdrawing the final troops from the country by the end of the month.Hmmmmm.....Anyone still doubting why an ex Iranian guard commander was at the WhiteHouse?Iran.....Hezbollah....Hellooooooo?Read the full story here.

• Canadian Imam Compares Canada to Nazi Germany.(Zaman).Calgary - A local Muslim leader who came under fire for comparing the situation Jews faced in Nazi Germany with that of Muslims in Canada today is hoping to meet the Calgary Jewish Community Council to clear the air.“I have asked for a meeting, and after the meeting, I’m going to comment,” said Imam Syed Soharwardy. “I just don’t want any misunderstanding that people are trying to create.”Imam Soharwardy, president of the Islamic Supreme Council of Canada, was sounding off on Ottawa’s new policy barring individuals from donning niqabs or face veils while taking their oath of citizenship.“Muslims are going through that situation right now where the Jews faced before the Holocaust,” hey told CTV earlier this week.Related - Niqab is not an issue.Barbara Kay: New niqab law puts Canadian values first.“Because intimidation of their faith, badmouthing about their faith, badmouthing about their book, badmouthing about their beliefs - that was going on in Germany before the Holocaust. The same thing is happening now about Muslims,” he said.Judy Shapiro, community relations director with the Calgary Jewish Community Council, said she understood that the Imam was disagreeing with federal government policy.“But there is no comparison between what Canadian Muslims are facing today and what the Jews faced in Germany before the Holocaust,” Ms. Shapiro said.“Not only is such a statement factually wrong, but it’s insensitive, at the very least, not only to the Jewish community, but to all Canadians. To equate Canadians to Nazis is totally unwarranted.”Ms. Shapiro said no meeting has been set up, but if it does happen, it will be private.Read the full story here.

• US Clears Iraqi Airspace For Israeli Strike On Iran.(Matzav).The U.S. military’s fast-approaching Dec. 31 exit from Iraq, which has no way to defend its airspace, puts Israel in a better place strategically to strike Iran’s nuclear facilities.Iraq has yet to assemble a force of jet fighters, and since the shortest route for Israeli strike fighters to Iran is through Iraqi airspace, observers conclude that the U.S. exit makes the Jewish state’s mission planning a lot easier.Army Maj. Gen. Jeffrey Buchanan, the top U.S. military spokesman in Iraq, said the Iraqi military will maintain radars to monitor the country’s airspace, but it has not taken possession of American F-16s to guard that space.“The country has a capable and improving capability to see the airspace, a viable system to provide command and control, but no system to defeat incoming air threats until it gets either the F-16s or ground-based systems or, optimally, some of both,” Gen. Buchanan told The Washington Times.Iraq made the first payment in September for 18 F-16s that will not arrive until next fall at the earliest. This means Israel would have a theoretical window of about 12 months if it wants to fly over Iraq unimpeded by theIraqi air force.Retired Air ForceGen. Thomas McInerney, who advocates a U.S. strategic bombing raid to destroy Iran’s nuclear sites, agreed that Iraq’s open airspace would make it easier for an Israeli mission.“Yes, it will be,” he said. “However, it will be much easier for Iranian forces to get to Israel through Iraq via land and air.”Gen. McInerney said he thinks there is a good chance that Iran, stretched economically by Western sanctions and fearing threats from Israel, will launch a war against the Jewish state through Iraq.“Our departing Iraq will be a huge strategic mistake,” he said of the Dec. 31 deadline for all U.S. forces to leave.Iraq’s ruling Shiite majority has historic ties to Iran’s dominant Shiite society, but Iraqi Prime Minister Nouri al-Maliki has warned Tehran against meddling in his country’s politics.Unknown is the role of U.S. jet fighters stationed outside Iraq but within striking distance from Navy carriers in the Persian Gulf, or possibly Kuwait.“I would hope we would jump to defend Iraqi airspace,” said James Carafano, a military analyst at the Heritage Foundation. “These are the kinds of contingency plans that ought to be put in place.”Defense Secretary Leon E. Panetta, like his predecessor, Robert M. Gates, has downplayed the impact that an airstrike might have on Iran’s quest for an atomic bomb. The Islamic republic has denied that it is trying to make a nuclear weapon.Read the full story here.

• Leftists Delay Justice, Cop-Killer Gets Death Reprieve.(JW).Pliant courts and a powerful leftist movement delayed justice long enough to get a convicted cop-murderer a death-penalty reprieve more than a decade after his lengthy appeals process had already been exhausted.The outrageous case involves a member of the radical Black Panthers, Mumia Abu-Jamal, who murdered a police officer (Daniel Faulkner) in Philadelphia three decades ago. Abu-Jamal, who claims to be the victim of a racist legal system, was sentenced to death by the jury that convicted him in 1982. After losing multiple appeals and being rejected by the U.S. Supreme Court twice, Abu-Jamal finally got his official reprieve this week.Prosecutors in Philadelphia officially abandoned their decades-long pursuit of execution for the cop-killer, leaving him to rot in jail for the rest of his life. In 2001, two years after Abu-Jamal had exhausted a lengthy appeals process, a Philadelphia federal judge (William Yohn) threw out the death sentence citing problems with the jury instructions and verdict form in the trial.Judge Yohn, appointed by the first President Bush in 1991, said jurors should have been able to consider mitigating circumstances during sentencing even if they did not unanimously agree that those circumstances even existed. Then he ordered prosecutors to, either conduct a new sentencing hearing, or instead sentence Abu-Jamal to life imprisonment since the conviction itself was never questioned.Decades have passed, many of the witnesses are either dead or unreachable so Philadelphia’s District Attorney decided not to proceed with a new sentencing hearing. “There has never been a doubt in my mind that Mumia Abu-Jamal shot and killed Officer Faulkner, and I believe the appropriate sentence was handed down in 1982,” said Philly D.A. Seth Williams, who happens to be black.He points out that every reviewing court has ruled that Abu-Jamal’s trial was fair and the verdict of guilt sound. The evidence was overwhelming and the mixed-race jury didn’t take long to reach a verdict for the 1981 murder. Three credible eyewitnesses testified that Abu Jamal was the killer. The bullet in the officer’s brain came from Abu Jamal’s gun, which had five empty cartridges when investigators found it. Court documents, testimony and other relevant facts about the case are available on a website created in the officer’s memory.From prison Abu-Jamal has been a hero to a powerful leftwing movement—including journalists— that has fought for his release. His backers include famous Hollywood celebrities and well-known activists and civil rights groups such as the National Association for the Advancement of Colored People (NAACP) and Amnesty International. President Obama’s ousted “Green Czar” (Van Jones) is also among the vocal Abu-Jamal supporters.Reacting to this week’s reprieve, a San Francisco-based group (appropriately called Prison Radio) that claims Abu-Jamal is a political prisoner insists he be freed, asserting that he’s innocent. To make its case the group includes a statement from the great South African activist (Desmond Tutu) who earned international accolades for opposing apartheid. Because life in prison is yet another form of death sentence, Tutu says, justice will not be served. “Based on even a minimal following of international human rights standards, Mumia must now be released,” Tutu said.Read the full story here.  

• House Passes Spending Bill That Bans White House “Czars”.(DetNews).WASHINGTON — The U.S. House approved a $1 trillion spending bill on a 296-121 vote to fund the federal government’s operations through Sept. 30. As part of a compromise struck late Thursday, the funding bill specifically prohibits “czars” related to health care, climate change, the auto industry and urban affairs.The Senate is expected to pass the measure on Saturday.Michigan’s House delegation split 10-5 in favor of the resolution.Opposing the measure were Reps. Thad McCotter, R-Livonia; Justin Amash, R-Cascade Township; Hansen Clarke, D-Detroit; Bill Huizenga, R-Zeeland; and Tim Walberg, R-Tipton.But Democrats and Republicans are still debating whether to extend a cut in payroll taxes set to expire Dec. 31, extend emergency unemployment insurance and increase Medicare reimbursement payments to doctors. Republicans are insisting on a provision aimed at speeding approval of a controversial energy pipeline from Canada.House Speaker John Boehner, R-Ohio, praised the vote.“Recognizing the danger our spending-driven debt poses to long-term economic growth, this bill cuts discretionary spending for the second year in a row — a first in modern history — and eliminates several excessive government regulations that threaten job creators,” he said.Read the full story here.

• Unreal: Congressmen Told They Can’t Say “Merry Christmas” In Mail To Constituents.(Washington Examiner).Looks like the PC police have threatened members of the House of Representatives against wishing constituents a “Merry Christmas,” if they want to do so in a mailing paid for with tax dollars.Members who submit official mailings for review by the congressional franking commission that reviews all congressional mail to determine if it can be “franked,” or paid for with tax dollars, are being told that no holiday greetings, including “Merry Christmas,” can be sent in official mail.“I called the commission to ask for clarification and was told no ‘Merry Christmas.’ Also told cannot say ‘Happy New Year’ but can say ‘have a happy new year’ — referencing the time period of a new year, but not the holiday,” said a Hill staffer who requested anonymity.Another Hill staffer told The Washington Examiner that “we were given that advice after submitting” a draft mailing.Read the full story here.

• Why won't Obama say 'victory' to mark end of Iraq war?(WashingtonExaminer).President Obama delivered an important speech yesterday concerning the conclusion of the American war effort in Iraq. He spoke at Fort Bragg, N.C., before an assembly of America's finest military men and women, not a few of whom carried with them wounds suffered in the war. Every American should carefully read and study this Obama speech. Those who do will look in vain for the most important word that can be said about this or any other war.U.S. troops invaded Saddam Hussein's Iraq in 2003. By all accounts, the turning point in the war was the surge, the rapid increase in 2006 of American troop strength and the systematic application of their courage and firepower in an unprecedented strategy of localized engagement that began with the Anbar Awakening.Of the surge, Obama said this yesterday: "We remember the surge and we remember the Awakening -- when the abyss of chaos turned toward the promise of reconciliation. By battling and building block by block in Baghdad, by bringing tribes into the fold and partnering with the Iraqi army and police, you helped turn the tide toward peace."A little further on in his address, Obama observed: "It's harder to end a war than begin one. Indeed, everything that American troops have done in Iraq -- all the fighting and all the dying, the bleeding and the building, and the training and the partnering -- all of it has led to this moment of success. Now, Iraq is not a perfect place. It has many challenges ahead. But we're leaving behind a sovereign, stable and self-reliant Iraq, with a representative government that was elected by its people. We're building a new partnership between our nations. And we are ending a war not with a final battle, but with a final march toward home."Those are fine and inspiring words to be sure. But what is more notable is the one word America's commander in chief could not bring himself to say to the assembled troops: Victory. He called the end of the American sacrifice in Iraq a "moment of success." And he called it an "extraordinary achievement." He even called it the fullest "expression of America's support for self-determination than our leaving Iraq to its people."But he didn't call it a victory, even though by his own description, Iraq was, before the arrival of American troops, a land of intense suffering under one of the most cruel and ruthless dictators in history. Today, the people of Iraq are no longer terrorized by their own government; they are instead its masters. If that result does not deserve to be called a victory for America, Obama owes an explanation to the families of the 4,500 Americans who gave their lives to bring it about.Read the full story here.

• Coming Soon: Retroactive Surveillance on Anyone.(NetworkWorld) .As the price of digital storage drops and the technology to tap electronic communication improves, authoritarian governments will soon be able to perform retroactive surveillance on anyone within their borders, according to a Brookings Institute report.These regimes will store every phone call, instant message, email, social media interaction, text message, movements of people and vehicles and public surveillance video and mine it at their leisure, according to “Recording Everything: Digital Storage as an Enabler of Authoritarian Government,” written by John Villaseno, a senior fellow at Brookings and a professor of electrical engineering at UCLA.That will enable shadowing people’s movements and communications that took place before the individuals became suspects, he says.“For example, if an anti-regime demonstrator previously unknown to security services is arrested, it will be possible to go back in time to scrutinize the demonstrator’s phone conversations, automobile travels, and the people he or she met in the months and even years leading up to the arrest,” the report says.“These enormous databases of captured information will create what amounts to a surveillance time machine. … This will fundamentally change the dynamics of dissent, insurgency and revolution,” the report says.Villaseno draws on knowledge gained from recent overthrows of such authoritarian regimes to support his argument that such a scenario is not just possible but likely. He notes that when the government of Libya fell, insurgents found equipment that had captured 30 million to 40 million minutes of phone conversations per month and enabled the government to read activist emails. There have been reports that the government of Syria wants to build communications intercepts as well, he says.In 2015 the cost of storing all the phone calls made in a year by an average person will be less than 2 cents, the report says. By 2020, the cost to store all the phone calls made by everyone over the age of 14 in Iran will be about $100,000, the report says.Hmmmm.....Welcome to the police state.Read the full story here.

• Britain should not be afraid of standing up for Christian values to counter ‘moral collapse’: Cameron.(Alarabiya).Britain is a Christian nation and should not be afraid of standing up for Christian values to help counter the country’s “moral collapse”, Prime Minister David Cameron said Friday.In a rare foray into religion by a British premier, Cameron said “live and let live” had too often become “do what you please” in Britain.The “passive tolerance” of immoral behavior had helped fuel the August riots, excess in the banking industry and home-grown Islamist terror, he said.“We are a Christian country. And we should not be afraid to say so,” Cameron said at an event in Oxford, southern England, to mark the 400th anniversary of the King James Bible.“The Bible has helped to give Britain a set of values and morals which make Britain what it is today. Values and morals we should actively stand up and defend.The alternative of moral neutrality should not be an option.”Cameron described himself as a committed but only “vaguely practicing” member of the Church of England, who was “full of doubts” about big theological issues.“We’ve got stand up for our values if we are to confront the slow-motion moral collapse that has taken place in parts of our country these past few generations,” he said.“Moral neutrality or passive tolerance just isn’t going to cut it anymore.“Shying away from speaking the truth about behavior, about morality has actually helped to cause some of the social problems.”Cameron said that along with the works of William Shakespeare, the King James Bible was a “high point of the English language”.“The Bible has helped to shape the values which define our country,” he said.“Responsibility, hard work, charity, compassion, humility, self-sacrifice, love, pride in working for the common good and honoring the social obligations we have to one another, to our families and our communities – these are the values we treasure.“Yes, they are Christian values. And we should not be afraid to acknowledge that.“But they are also values that speak to us all – to people of every faith and none. And I believe we should all stand up and defend them.”People who say that would be “doing down other faiths” were “profoundly wrong”.Hmmmm........Jesus said "...you shall know the truth, and the truth shall make you free." ~ John 8:32 .Read the full story here.

• AP Poll: Majority of Americans Want Obama Voted Out of Office.(The Hill) — The majority of Americans believe that President Obama should not win reelection and his job approval stands at a new low, throwing into doubt his chances to earn reelection according to a new AP/GfK poll.More than half of Americans — 52 percent — said that President Obama should be voted out of office, a record high. Only 43 percent says he deserves a second term. Only 44 percent of voters approve of the job Obama has done as president, with 54 percent disapproving.Those numbers are a sharp decline from May, when 53 percent said Obama should be reelected. Only 38 percent of independents are approve of the job the president is doing, and only 39 percent of all voters approve of the job Obama is doing on the economy.Only 26 percent said the United States was headed in the right direction, and less than a third of respondents said they supported the president’s signature health care reform legislation.Read the full story here.

• Update: Nine dead in Cairo as clashes between army and protesters escalate.(BikyaMasr).CAIRO: Egyptian soldiers clashed with protesters for the second consecutive day in downtown Cairo, in an ongoing, violent crackdown on anti-government protests in the area.According estimates from the Egyptian Ministry of Health, at least nine protesters have been killed and 354 have been injured since the violence began in the early hours of Friday morning.Eyewitnesses reported that the army stormed flats surrounding the square where news stations had set up cameras. The army reportedly confiscated the video equipment, destroying it or throwing it down to the street below.In a press statement on Saturday afternoon, Egypt’s newly appointed Prime Minister, Kamal Ganzouri, said that the military did not initiate the attack and only worked to defend itself.He called his government “the revolution’s salvation government,” denying media reports that the army had used live ammunition on protesters.Hundreds of protesters have remained in the square on Saturday afternoon as the army’s violence intensifies.“We are waiting to see what happens next. When people wake up today, they will come and we will not stop this in the face of military,” Amr, a protester with rock in hand, told Bikyamasr.comThe violence began around two in the morning on Friday after an Ultra – a hardcore football fan – was allegedly abducted by security near the nearly three-week old sit-in in front of the Egyptian cabinet building.Rock throwing and clashes ensued and spread through the downtown Cairo area to Tahrir Square, Talaat Harb and Qasr el-Nil.Egypt’s army took power after popular uprisings ousted former President Hosni Mubarak in February.Since, they have become growingly unpopular, as protesters call upon them to immediately transfer power to a civilian-led government.Read the full story here.

• Related - BikyaMasr.com Editor-in-Chief Joseph Mayton detained by Egyptian military.(BikyaMasr).Breaking from Cairo: Bikyamasr.com’s Editor-in-Chief, Joseph Mayton, was detained this morning while covering the escalating clashes between protesters and military personnel outside of Egypt’s Cabinet building.As of the time of writing, Bikyamasr.com staff were in communication with US Embassy officials who are working to obtain Mayton’s immediate release.The clashes between demonstrators and military forces, which began in the early morning of Friday, December 17, have escalated rapidly in the past 12 hours. At least 8 have been confirmed dead, with reports of over 300 injured.Amongst the dead is cleric Emad Effat, a member of the Dar Al-Ifta religious authority. Al-Ahram reports that a funeral march for Effat has begun at Al-Azhar mosque, one the most important religious authorities in Sunni Islam.Egyptian State TV cut its live broadcast of the confrontation around noon on Saturday, as military forces escalated the situation, using lethal force and large numbers to repel protestors.BikyaMasr.com staff will continue to monitor this breaking story while working to assure the release of editor Joseph Mayton.Read the full story here.

• Arab League considers taking its Syria plan to the U.N. but rules out military action.(AlArabiya).An Arab ministerial committee ruled out taking military action against Syria but proposed on Saturday to take an Arab League plan to end the crisis in Syria to the U.N. Security Council, Qatar Prime Minister Sheikh Hamad bin Jassem Al-Thani said.The bloc’s foreign ministers will meet in Cairo on Wednesday to discuss the proposal, he said, a day after Russia proposed a surprise draft resolution to the council.“As Russia has gone to the Security Council, a proposal will be presented in the (Arab ministers’) meeting on December 21 that the Arab League goes to the (U.N.) Security Council to present the Arab initiative,” the Qatari premier said.In the same time Syria said that it will delay signing the agreement that will allow an Arab mission of military and civilian observers in the country as part of an Arab League proposal to end the bloodshed there. Meanwhile, an Iraqi team held “positive” talks with Syrian President Bashar al-Assad on Saturday in a bid to end the deadlock over an Arab League plan to end nine months of bloodshed, its leader told AFP.“I am on my way to Cairo for a meeting with the Arab League after holding positive talks with President Assad,” National Security Adviser Falah al-Fayadh said.The Iraqi initiative is aimed at opening a dialogue between the opposition and the Syrian government to reach a result that satisfies both sides, Prime Minister Nuri al-Maliki said in an interview with AFP on Thursday.“America and Europe are afraid of the phase after Bashar al-Assad. That is why they understand the initiative” from Iraq, Maliki said.The United Nations this week estimated that more than 5,000 people have been killed in the Syrian government’s crackdown on dissent, now in its 10th month.According to the Syrian Revolution Council, about 14 people were killed on Saturday across the country by the fire of the security forces. Shiite-led Iraq has so far shied away from punitive measures against Assad’s Alawite Shiite regime, abstaining from both a vote to suspend Syria from the Arab League, and another to impose sanctions on Damascus.There are fears among officials in Iraq, which has a substantial Sunni minority, that instability in neighboring Sunni-majority Syria could spill over the border.Read the full story here.

• Report: Iran 'blinded' CIA spy satellite.(Ynet).Is Iran in possession of satellite jamming technology? A European intelligence source claimed Iran stunned Western intelligence agencies when it managed to "blind a CIA spy satellite by aiming a laser burst quite accurately," in a never before reported incident.According to an article in The Christian Science Monitor, this unreported incident might suggest that the Iranians have successively gained access to jamming technology, allowing them to track unmanned aerial vehicle navigation capabilities.Former US Ambassador to the United Nations John Bolton told Fox News on Sunday that such an option is possible."Some reports have said Russia sold (Iran) a very sophisticated jamming system a short time ago. Now, our military says that is not true, it came down because of a malfunction. I certainly hope that's right because if the Russians have provided Iran with sophisticated jamming equipment it means a lot else is at risk too," said Bolton. He added that Congress should be quite concerned if Iran is in possession of jamming technology that can bring down missiles, planes and communications and guidance systems "for a whole range of our weapon systems."An Iranian engineer, trying to decipher the secrets of the CIA drone that was flying over Iranian territory earlier this month, claimed Iranians managed to the craft's frequency, causing it to switch into autopilot mode and land on Iranian territory. The engineer maintained that the drone's Achilles' heel is its global positioning system (GPS). He explained that by jamming the communication the UAV is forced to switch to autopilot, causing it to lose control. According to the engineer, Iran was able to jam communication after accumulating data on other US drones which were shot down in Afganistan. Iranian experts were then able to reprogram the GPS data supposedly directing the US craft to land in Iran.Meanwhile, Iran's foreign minister said on Saturday that his country deliberately delayed its announcement of the capture of an American surveillance drone to test US reaction.Ali Akbar Salehi is quoted by the official IRNA news agency as saying Saturday that Iran's armed forces intercepted and brought down the pilotless aircraft without any foreign assistance.On Friday US offcials said they believe the American stealth drone displayed in Iran had crashed and broke into pieces and was put back together by Iranians to make it seem it was not damaged by the crash, reported The Wall Street Journal.Iranian military officials were appeared surveying the unmanned aerial vehicle in video clips published last week, which Tehran claimed was shot down or remotely skyjacked before managing to land the drone intact. However US officials maintained the pilots of the UAV, which was developed by the Air Force but used by the Central Intelligence Agency at the time of the incident, lost control of the drone last week.The officials claimed the drone broke into three pieces, and added the UAV in question is one the most-sophisticated US spy planes available. Now the American intelligence officials are hard at work trying to asses how badly this incident hurt their capabilities in the region. American officials believe the Iranians have managed to reassemble the drone and display it, stirring up a heated discussion among Washington lawmakers who are outraged the sophisticated UAV cannot self destruct in the event that it falls into unwanted hands. Officials also maintained the drone was repainted by Iran in an attempt to hide the damage caused to the UAV. According to them, the actual color of the drone is charcoal-gray and not white, as it appears to be in the video. Tehran's claim that the pilot had lost control of the craft has raised suspicion among US officials. "They did not commandeer it and steer it to the ground," a Washington official stated. "It crashed, and they put it back together to make it look whole, like a puzzle being put back together."Meanwhile, Google CEO Eric Schmidt asserted that Iran has been developing cyber warfare which might endanger the US in the future. “The Iranians are unusually talented in cyber war for some reason we don't fully understand,” Schmidt said in an interview with CNN on Thursday. Read the full story here.