The World’s Largest Money-Laundering Machine: The Federal Reserve (October 8, 2012)

Hezbollah says it sent drone over Israel

BEIRUT (AP) — The leader of Hezbollah claimed responsibility Thursday for launching an Iranian-madedrone aircraft into Israeli airspace earlier this week, adding more tension to an already explosive Mideast atmosphere.

Sheik Hassan Nasrallah warned that it would not be the last such operation by his Lebanese militant group.

Israeli warplanes shot down the unmanned plane, but the infiltration marked a rare breach of Israel's tightly guarded airspace. Hezbollah had been the leading suspect because of its arsenal of sophisticated Iranian weapons and a history of trying to deploy similar aircraft.

With a formidable arsenal that rivals that of the Lebanese army, Hezbollah is already under pressure in Lebanon from rivals who accuse it of putting Lebanon at risk of getting sucked into regional turmoil. Confirmation that Hezbollah was behind the drone could put the group under further strain internally as it pursues its longstanding conflict with Israel.

Hezbollah, a powerful Shiite group committed to Israel's destruction, has long served as an Iranian proxy along Israel's northern border. It is also seen as a close ally of the embattled regime of Syrian President Bashar Assad. Israel accuses the Assad government of allowingIran to ferry weapons to Hezbollah through its territory.

Israel and Hezbollah fought a brutal monthlong war in mid-2006. Hundreds of people were killed, and Hezbollah fired several thousand rockets and missiles into Israel before the conflict ended in a stalemate.

Israel routinely sends F-16 fighter planes over Lebanon, in violation of a U.N. Security Council resolution that ended the 2006 war. The Israeli planes have often broken the sound barrier over Beirut and other places as a show of strength, most recently after the drone incident.

"This statement today is a claim of responsibility by the Islamic resistance for this qualitative operation" of dispatching the drone, Nasrallah said in a televised address late Thursday.

"Today we are uncovering a small part of our capabilities, and we shall keep many more hidden," he said. "It is our natural right to send other reconnaissance flights inside occupiedPalestine ... This is not the first time and will not be the last. We can reach any place we want" in Israel, he said.

He said the aircraft was launched from Lebanese territory and flew "tens of kilometers" over sensitive Israeli installations before it was discovered and shot down by the Israeli air force near the Dimona nuclear reactor in Israel's southern desert.

He dismissed an Israeli military statement that it began tracking the aircraft over the Mediterranean but waited until it was over an empty desert area to bring it down in order to avert casualties on the ground.

Nasrallah claimed the group had more surprises and would not hesitate to use them in any future war with Israel.

Launching the drone was a rare and provocative move by the Lebanese militants at a time of soaring regional tensions, with both Syria and Iran under intense international pressure.

Nasrallah said the aircraft was made in Iran and assembled by Hezbollah, adding that it was much more sophisticated than drones it sent before.

Hezbollah has attempted to send unmanned aircraft over Israel on several occasions, dating back to 2004. Nasrallah has claimed that the group's drones were capable of carrying explosives and striking deep into Israel.

Israel has said the latest drone was not carrying explosives and appeared to be on a reconnaissance mission.

The last known attempt by Hezbollah to use a drone took place during the 2006 war, when Israel shot down an Iranian-made pilotless aircraft that entered its airspace.

Touring southern Israel on Thursday, Israeli Prime Minister Benjamin Netanyahu praised efforts to prevent land infiltrations from Egypt. He mentioned that Israel has been equally successful "in the air, just like we thwarted the Hezbollah attempt last weekend," his first public statement blaming Hezbollah.

Hezbollah was formed to oppose Israel's occupation of south Lebanon in the 1980s, and the two sides have a bitter history.

Hezbollah has accused Israel of assassinating a top Hezbollah operative in 2008 in Syria. The group and Lebanese officials say they have broken up several Israeli spy rings inside Lebanon over the past few years.

Israel charges that Hezbollah, with Iranian backing, was behind a string of attempted attacks on Israeli diplomatic targets in India, Thailand and the former Soviet republic ofGeorgia, plus a deadly bombing this year that killed five Israeli tourists in a Bulgarian resort.

Last week, Israel announced the arrest of an Arab citizen it accused of spying for Hezbollah, the latest in a string of such cases.

Nasrallah also denied reports that Hezbollah members were fighting alongside Assad's forces against rebels in Syria.

The reports gained new urgency in the past weeks after Hezbollah buried several of its members, saying they died while performing their "jihadi duty." Lebanese officials said they died in Syria.

He said those killed were among 30,000 Lebanese who live in Syrian territory along the border with Lebanon and were defending themselves against repeated attacks by gunmen in Syria.

"Until this moment we did not enter the fight alongside the (Syrian) regime," Nasrallah said, but did not preclude the possibility that the group might do so in the future.

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Greek unemployment rate hits 25.1 per cent in July as recession heads for sixth year

ATHENS, Greece - Unemployment in Greece hit a record high of 25.1 per cent in July as the country's financial crisis continues to exact its heavy toll, official figures showed Thursday.

All indications are that unemployment in Greece will continue to rise. The economy has shrunk by around a fifth since the recession started in 2008 and youth unemployment has pushed far above 50 per cent. The economy is expected to enter a sixth year of recessionnext year.

"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation.

The state statistics agency said Greece's unemployment rate rose from 24.8 per cent in June. According to European statisticians, that would be the same rate as Spain's in August.

The two countries have the highest unemployment rates among the 17 that use the euro. In August, eurozone unemployment stood at an average 11.4 per cent, itself the highest level since the single currency was launched in 1999.

Greece's statistical authority said 1.26 million Greeks were out of work in July, with more than 1,000 jobs lost every day over the past year. In the worst-affected 15-24 age group, unemployment was 54.2 per cent. In July 2008, a year before Greece's acute financial crisis broke, there were only about 364,000 registered unemployed.

The country's main GSEE labour union said real unemployment is above 30 per cent and growing, which it blamed on "violent" government cutbacks.

After losing access to international money markets and nearly defaulting on its mountain of debt, Greece has survived on international bailouts since May 2010.

However, solvency comes at a harsh price: To secure and continue receiving the loans, Athens imposed tough austerity measures, slashing incomes and repeatedly increasing taxes, in an attempt to get its public finances in order.

The conservative-led government is currently in negotiations with the country's creditors over another raft of austerity measures, worth €13.5 billion ($17.4 billion) over the next two years, so it can get the next batch of bailout funds. Greece has to satisfy certain periodic conditions in order to qualify for the handouts.

Without the money, Greece won't be able to pay all its financial obligations and may end up defaulting on its debts and leaving the euro.

The cutbacks have triggered deep resentment among a population reeling under nearly three years of austerity. GSEE and other main unions have called a new general strike and demonstration next week.

"During a time when unemployment is strangling Greek society and the recession is at 7 per cent, it is at least provocative that (bailout creditors are) focusing on further bleeding workers and pensioners," GSEE said in a statement.

Finance Minister Yiannis Stournaras was holding talks Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank — the so-called troika. The government still hopes to have struck a deal before next week's EU summit in Brussels, officials say.

The troika has to sign off the package for the release of the funds.

After the late-evening talks, a senior government official said it remained unclear whether agreement on the austerity package could be reached before the Oct. 18-19 meeting in Brussels of European heads of government.

The official said another sticking point was how to cover the cost of a Greek request to extend its fiscal adjustment program by two years to the end of 2016, with the price tag estimated at €12 billion ($15.5 billion).

The official asked not to be named because the negotiations are ongoing.

Some evidence emerged Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-busting effort is on track despite lower-than-anticipated revenues.

The ministry said the January-September deficit was €12.64 billion, lower than the €13.5 billion target. Although revenues were €1.3 billion off target, spending was €2.2 billion less than budgeted.

All three parties in Greece's governing coalition back the two-year extension, and IMF chief Christine Lagarde on Thursday said she also supports the idea.

"I said repeatedly that an additional two years was necessary for the country to actually face the Fiscal Consolidation Program that is considered," Lagarde told reporters as the IMF and World Bank held annual meetings in Tokyo.

But German Chancellor Angela Merkel, who in a visit to Athens on Tuesday praised Greek progress with reforms but stressed that much remains to be done, said the troika must deliver its report before any decision is made.

"I do not want to comment on every single statement of which we see many during a single day," she said. "This is the base. I now wait for the troika report, then we will forge our position," she said.

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Jordan: US forces plan shield against Syria

RUSSEIFEH, Jordan (AP) — From the edge of a steep mountain overlooking a desert compound built into an old rock quarry, machine gunfire echoes just outside hangars where U.S. special operations forces are training Jordanian commandos.

The Americans, who arrived in the kingdom a few weeks ago at the request of the Jordanians, are helping them develop techniques to protect civilians in case of a chemical attack from neighboring Syria, according to Jordanian officials.

On the Syrian border farther north, British military officers recently assessed the dangers of rockets constantly falling on the kingdom and ways to shield the Jordanian population and Syrian refugees as President Bashar Assad widens his military offensive against rebel enclaves in the vicinity, according to Jordan-based Western diplomats.

Jordan's King Abdullah II has repeatedly discussed plans for reinforcing security along the Syrian border and expressed concern over Syria's chemical stockpiles in meetings with visiting Western allies, according to the two diplomats, who monitor Syria from their base.

They said it is believed that Abdullah has also been shopping around for an anti-missile defense system to shield his densely populated capital, Amman — home to nearly half of Jordan's population.

There is also talk of contingency plans for a quick pre-emptive strike if Assad loses control over his stock of chemical weapons in the civil war. The fear is that those weapons might otherwise fall into the hands of al-Qaida or Lebanon's Islamic militant group Hezbollah.

"There are dangers involved, and we have to ensure the safety of our country and the well-being of our citizens," a senior government official said in the first public Jordanian confirmation of the presence of foreign military personnel here. "We are benefiting from the experience of our allies as we prepare for the worst scenarios."

The presence of some 150 Americans at the King Abdullah II Special Operations Training Center northeast of the capital is a clear message to Assad that Jordan's longtime Western allies stand ready to defend the country if it is dragged into the 19-month Syria conflict.

Assad's regime, which is believed to have one of the world's largest chemical weapons programs, has said it might use them against external threats but not against Syrians.

But the Jordanians worry that Assad may use his chemical weapons against his neighbors, or his countrymen, if he felt that his days in power were numbered.

In May, the U.S. held joint exercises with Jordan, nicknamed the "Eager Lion," which focused on the ways to deal with a chemical weapons attack.

On Wednesday, U.S. Defense Secretary Leon Panetta said at a NATO conference of defense ministers in Brussels that the U.S. has been working with Jordan to monitor chemical and biological weapons sites in Syria and was helping Jordan deal with refugees pouring over the border.

Although the senior government official insisted that the Americans were "advisers, not troops," two senior U.S. defense officials said most were Army special operations forces. The U.S. officials spoke on condition of anonymity because they were not authorized to comment publicly about the mission.

The troops are operating out of a military center near Amman and have moved back and forth to the Syrian border. Their work involves gathering intelligence and planning joint Jordanian-U.S. military maneuvers, one U.S. official said.

The revelation of U.S. military personnel so close to the Syrian conflict suggests an escalation in the American involvement, even as the Obama administration pushes back on any suggestion of a direct intervention in Syria.

The Jordanian official insisted that the kingdom was "capable of shielding itself from Syrian attack," but London-based Mideast analyst Rosemary Hollis disagreed.

"For Jordan, the more unstable Syria becomes, the deeper the crisis proceeds, the more likely Jordan will suffer from all kinds of spillover, but they are incapable of doing anything to intervene to try to turn the conflict in one direction rather than another unless they have the ballast, cover and involvement of serious international forces, which is the Americans," Hollis said.

She also saw the American military presence as a step toward possible future military operations to secure Syria's chemical stockpiles.

Torbjorn Soltvedt, a senior analyst with the Britain-based Maplecroft risk analysis group, said he saw the current situation as a "monitoring and training stage."

"Given the degree to which Syria's chemical weapons stockpiles have been dispersed across the country, an operation to secure them would be extensive and require significant numbers of troops," he said. "The Pentagon has estimated that an operation to secure Syria's chemical weapons stockpiles could require as much as 75,000 troops given the presence of several chemical agent manufacturing plants and many more storage sites throughout the country."

Panetta said that while the U.S. believes the weapons are still secure, intelligence suggests the regime might have moved some to protect them.

Steven Bucci, an expert in chemical weapons at the Heritage Foundation, has told Congress there might be as many as 50 chemical weapons sites in Syria. He said in an interview Wednesday that Syria's stockpile is potentially "like a gift from God" for militants since they don't have the know-how to assemble such weapons, while some of Syria's chemical agents are believed to have already been fitted into missile warheads.

At the desert facility, stretching 25 kilometers (16 miles) on the edge of this predominantly Palestinian suburb, Jordanian soldiers guard the walled compound, where Iraqi and Libyan special forces once received training. They refused to allow reporters in.

Jordanian officials were eager to downplay the U.S. role, concerned about the possibility of raising tensions with Syria and giving the kingdom's largely conservative population the impression that they were allowing foreigners to use Jordan as a potential launching pad for a pre-emptive attack against another Arab country.

The senior government official and two others who discussed the American military role all spoke on condition of anonymity, citing possible diplomatic sensitivities with Syria. Assad is thought to have sleeper cells scattered across the kingdom and plotting attacks on Syrian opposition and Jordanian figures.

Information Minister Sameeh Maaytah, the only official who spoke on the record, said the U.S. presence was part of "routine training exercises."

"Jordan and U.S. forces exchange visits regularly, and the presence of tens of their forces here is part of efforts to expand cooperation, exchange capabilities and protect regional stability," he said in an interview. He declined to elaborate or comment on any link to the Syrian crisis.

Amman has long had bumpy relations with Damascus because of its alliance with the United States — Jordan's largest donor of economic and military aid — and its 1994 peace treaty with Israel.

Jordan would like to see the Syrian regime toppled because of growing concern that Assad's key ally, Iran, is trying to spark Shiite uprisings in Arab countries ruled by members of the rival Sunni sect. Assad's ruling Alawite minority is an offshoot of Shiite Islam.

Abdullah was the first Arab leader to warn in 2004 of the sweep of Iran's "Shiite crescent," stretching from Lebanon through Syria and Iraq.

Jordanian officials have advocated a buffer zone inside the Syrian border to protect civilians fleeing bombardment. There is mounting speculation that Jordan would dispatch highly skilled special forces to secure such a zone when Assad's regime falls to prevent chaos on its border.

In the past six weeks, more than 20 Syrian rockets have fallen on Jordanian villages near the border. At least two people were wounded, including a 4-year-old Jordanian girl.

The two Western diplomats said the Britons, about a half-dozen officers specialized in intelligence gathering and special operations techniques, visited Jordan a few times over the past three months. The diplomats insisted on anonymity, saying that public comment may hamper their information gathering on Syria.

The Jordanian army already has an extensive presence on the border and has been assisting waves of Syrian refugees, who are straining the country's meager resources, mainly health care, water and utilities.

Jordan hosts some 200,000 Syrian refugees, more than any other neighboring country. Some come under constant firing from their army as they cross into the kingdom. Jordanian border guards have been wounded and a 6-year-old Syrian boy was killed in July.

Jordanian men also are moving the other way across the border, joining what intelligence officials have estimated to be about 2,000 foreigners fighting alongside Syrian rebels trying to topple Assad.

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Turkey Is Hell Bent On Provoking War in the Middle East