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Wave of Debt Payments Facing U.S. Government - is the Hole to Deep?
Nov 26th, 2009
Daily Newswww.nytimes.com
Categories: Today's Headlines;Warning

The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true. 

But that happy situation, aided by ultralow interest rates, may not last much longer. 

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher. 

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means. 

The surge in borrowing over the last year or two is widely judged to have been a necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years. But there is little doubt that the United States’ long-term budget crisis is becoming too big to postpone. 

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

“The government is on teaser rates,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates lower deficits. “We’re taking out a huge mortgage right now, but we won’t feel the pain until later.”

So far, the demand for Treasury securities from investors and other governments around the world has remained strong enough to hold down the interest rates that the United States must offer to sell them. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt.

The government’s average interest rate on new borrowing last year fell below 1 percent. For short-term i.o.u.’s like one-month Treasury bills, its average rate was only sixteen-hundredths of a percent. 

“All of the auction results have been solid,” said Matthew Rutherford, the Treasury’s deputy assistant secretary in charge of finance operations. “Investor demand has been very broad, and it’s been increasing in the last couple of years.”

The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

The current low rates on the country’s debt were caused by temporary factors that are already beginning to fade. One factor was the economic crisis itself, which caused panicked investors around the world to plow their money into the comparative safety of Treasury bills and notes. Even though the United States was the epicenter of the global crisis, investors viewed Treasury securities as the least dangerous place to park their money.

On top of that, the Fed used almost every tool in its arsenal to push interest rates down even further. It cut the overnight federal funds rate, the rate at which banks lend reserves to one another, to almost zero. And to reduce longer-term rates, it bought more than $1.5 trillion worth of Treasury bonds and government-guaranteed securities linked to mortgages.

Those conditions are already beginning to change. Global investors are shifting money into riskier investments like stocks and corporate bonds, and they have been pouring money into fast-growing countries like Brazil and China.

The Fed, meanwhile, is already halting its efforts at tamping down long-term interest rates. Fed officials ended their $300 billion program to buy up Treasury bonds last month, and they have announced plans to stop buying mortgage-backed securities by the end of next March. 

Eventually, though probably not until at least mid-2010, the Fed will also start raising its benchmark interest rate back to more historically normal levels.

The United States will not be the only government competing to refinance huge debt. Japan, Germany, Britain and other industrialized countries have even higher government debt loads, measured as a share of their gross domestic product, and they too borrowed heavily to combat the financial crisis and economic downturn. As the global economy recovers and businesses raise capital to finance their growth, all that new government debt is likely to put more upward pressure on interest rates.

Even a small increase in interest rates has a big impact. An increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year — about equal to the combined budgets of the Department of Energy and the Department of Education. 

But that could seem like a relatively modest pinch. Alan Levenson, chief economist at T. Rowe Price, estimated that the Treasury’s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year.

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead. 

To lock in low interest rates in the years ahead, Treasury officials are trying to replace one-month and three-month bills with 10-year and 30-year Treasury securities. That strategy will save taxpayers money in the long run. But it pushes up costs drastically in the short run, because interest rates are higher for long-term debt. 

Adding to the pressure, the Fed is set to begin reversing some of the policies it has been using to prop up the economy. Wall Street firms advising the Treasury recently estimated that the Fed’s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point. Removing that support could in itself add $40 billion to the government’s annual tab for debt service. 

This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead. 

“Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4. 

“Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.”

U.S. Dollar Falls to 14 - Year Low Against the Yen
Nov 26th, 2009
Daily NewsBBC News
Categories: Today's Headlines;Warning

The US dollar has hit a 14-year low against the Japanese yen with low interest rates in the US making the greenback less attractive to investors.

The dollar slipped to 86.5 yen, its lowest level since July 1995.

The US has indicated it is unconcerned about the dollar's slide, and will not intervene to strengthen it.

Many traders are swapping dollar holdings for gold as a safer investment in the current uncertain economic climate.

The price of gold is currently at a record high of $1,194.5 an ounce.

Close watch

"This yen strengthening is caused by dollar selling rather than yen buying, so this is not something Japan can handle itself," said Yutaka Miura at Mizuho Securities.

"This trend will continue unless the Japanese government takes action, in co-operation with the US."

In the short term at least, analysts said such intervention was unlikely.

Thanksgiving Day is evidence that the US government and the Bible can work in harmony
Nov 26th, 2009
News UpdateJimmy DeYoung
Categories: Jimmy DeYoung News

The United States of America stops today to give thanks for all the blessings and freedoms that we have and this day is a special day set aside by the US government to do exactly what the Bible calls for us all to do, give thanks in all things.

Families will gather for the traditional Thanksgiving dinner of turkey and dressing, the young men and even some of us old guys will break out in the annual game of touch football and the ladies, well they'll be there to cheer us on, and in fact heal up any of the bruises sustained in the afternoon free-for-all. Those of us with loved ones on a far away battlefield will thank God for their protection and ask God for their safe return to the family circle for next Thanksgiving: and all of this on a day of thanksgiving required by the Bible and set aside by decree of our own government.

Jimmy's Prophetic Prospective on the News

Today is a day set aside for all of us to be thankful, but as we move closer to the time of the return of the Messiah, Jesus Christ, our world will become more and more unthankful, that is according to Bible prophecy. The principle of thanksgiving: there are over 100 locations in the Bible where the scriptures speak of thanks and thanksgiving. We are told to give thanks in all things for it is the will of God in Christ Jesus, I Thessalonians 5:18.

The product of thanksgiving: interestingly when we stop to give thanks, the end result is to our own personal benefit. Paul, an apostle, in a letter that he wrote to the Philippians, states that giving thanks brings us true joy. Paul also wrote the people in Colosse that giving thanks helps us to abound in the faith, a faith that is needed for all of life Colossians 2:7.

The prophecy of unthankfulness: as we approach the time of the Second Coming of the Messiah, Jesus Christ, Paul reminded us that he wrote a letter to Timothy to tell him that people would be unthankful at that time, II Timothy 3:2.

Unthankfulness is one of the major signs of the last days and as those days approach we need to be looking up in anticipation of His coming, but also in thanksgiving as well. Remember on this day of thanksgiving, unthankfulness is an indicator, a trend, a sign of the judgment that is coming, that is according to Bible prophecy.

Obama Shatters Spending Record for First - Year Presidents
Nov 26th, 2009
Daily NewsFOXNews.com
Categories: Today's Headlines;Warning

The federal government spent $3.5 trillion during President Obama's first year in office. This far exceeds the spending for any other first-year president.

President Obama has shattered the budget record for first-year presidents -- spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history. 

In fiscal 2009 the federal government spent $3.52 trillion -- $2.8 trillion in 2000 dollars, which sets a benchmark for comparison. That fiscal year covered the last three-and-a-half months of George W. Bush's term and the first eight-and-a-half months of Obama's.

That price tag came with a $1.4 trillion deficit, nearly $1 trillion more than last year. The overall budget was about a half-trillion more than Bush's for 2008, his final full fiscal year in office.

That's a big increase. But compared with other presidents' first years in office, Obama is running circles around them.

Bush spent $1.8 trillion in 2001, according to government budget figures that have been adjusted for inflation based on 2000 dollars. Using the same formula, former President Bill Clinton spent $1.6 trillion in 1993. 

The last president to clock in under $1 trillion was Gerald Ford, who logged a $982 billion budget in 1975. Post-war Dwight Eisenhower even brought Uncle Sam's tab down to $556 billion in his first year, 1953. 

Obama's first-year budget, adjusted for inflation, is about five times that. His 2009 budget is also close to 21 percent of that for Clinton's eight years in office -- Clinton's spending added up to $13.5 trillion over his two full terms. Bush spent $16.8 trillion from 2001-2008

Next War to Include All Israel
Nov 26th, 2009
Daily Newswashingtontimes.com
Categories: Today's Headlines;War;The Nation Of Israel

Three-and-a-half years have passed since the Second Lebanon War, and Tuesday morning saw the end of a project for the renovation and restoration of bomb shelters in northern Israel in a festive ceremony. 

The Prime Minister's Office and the Defense Ministry invested NIS 96 million (roughly $25.27 million) in the renovation of 3,019 public shelters. An additional 1,838 joint shelters were renovated by the administration for the restoration of the North and the Amigour company. 

Deputy Defense Minister Matan Vilnai said that in the event of another military operation, the fighting will not only be felt near Israel's borders, but throughout the entire country. "We are building the State of Israel's civilian front," he said, "A war only on the military front, as in the Yom Kippur War - not involving the civilian population – will not reoccur." 

The minister added that, "the best war is one that is prevented, because if there is a war, it will reach every part of the State of Israel." 

Vilnai slammed the proposed budget cuts in communities on the confrontation lines and said, "It is unreasonable and unfathomable that they are trying to take away from grants to authorities in the periphery. These towns are located around the state's borders and determine how the State of Israel looks." 

Eyal Gabai, director-general of the Prime Minister's Office also noted the importance of supporting periphery communities. "The recent conflicts have proven the strength of the communities along the border. It is the State's responsibility to change the perception, and the places that have been ignored will be made a top priority." 

Gabai added that the government plans to invest tens of billions of shekels in reinforcing infrastructure in the periphery, which he said would "change the lives of the residents of the Galilee and the Negev within 10 years." 

Head of Shlomi Local Council Gabi Naaman warned that the calm in the north in recent years could lead to complacency with regards to the continued restoration of shelters. 

"We must not forget that the confrontation line has not disappeared, or that, alongside the economic and professional threats, there is still a security threat that is demonstrated with a Katyusha attack on the northern communities from time to time," he said.

New EU President Looks to Global Governance
Nov 26th, 2009
Daily Newswnd.com
Categories: Today's Headlines;Revived Roman Empire;World Government

In accepting his appointment to be the first permanent president of the European Council in the European Union, Herman Van Rompuy affirmed his belief that the new world order would be dominated by international organizations that would seek to destroy the last vestiges of nation-states on the face of the globe, Jerome Corsi's Red Alert reports. 

In the following speech captured by BBC and posted on YouTube, Van Rompuy proclaimed, "2009 is the first year of global governance with the establishment of the G20 in the middle of the financial crisis." 

He continued, "The climate conference in Copenhagen is another step toward the global management of our planet." 

In the following widely viewed YouTube video, Mario Borghezio, a member of Italy's Lega Nord who is also a member of the European Parliament, pointed out in a speech to the European Parliament that Van Rompuy is a frequent attendee at Bilderberg Group and Trilateral Commission meetings. 

Borghezio asked how it is possible that no one has mentioned Van Rompuy is a candidate of these "occult groups" who "meet behind closed doors to decide matters over the heads of the people." 

Van Rompuy is known in Europe for his proposals that in the EU national symbols need to be replaced by European symbols, such that the national flags of the EU member nations would disappear in favor of the EU flag, and the same would happen with license plates, identity cards and even sporting events, as reported by the Telegraph in Great Britain. 

"Even the selection of the largely unknown Van Rompuy to be the first EU Council president and the selection of the equally unknown Lady Catherine Ashton, an EU trade commissioner, to be EU foreign policy head, smacked of back-room deals made by global elitists seeking to fill the new posts created by the Lisbon Treaty with EU global elitists like themselves," Corsi wrote. 

He said neither Van Rompuy nor Ashton was elected, noting that Lady Ashton has never held an elected position in her life. 

Contemplating the appointment of Van Rompuy and Lady Ashton, Corsi said he is reminded of Jean Monnet, a key architect of the European Union. 

In his "Memoirs," Monnet recalled that in his Luxembourg office he kept on his desk a photograph of the Kon-Tiki, the raft Norwegian explorer Thor Heyerdahl used in his 1947 expedition from South America to the Polynesian islands across the Pacific. 

When asked about the photograph, Monnet explained that he admired the young men who sailed the Kon-Tiki because once they chose a course, they knew they could not turn back. 

"We too are headed for our objective, the United States of Europe," Monnet openly proclaimed, "and for us too there is no turning back." 

Corsi wrote, "Following Van Rompuy's comments, there should be no doubt that the globalists have no intention of stopping or slowing down, as even the EU itself is simply one small step of regionalism on the new world order journey of international government in which nation-states themselves become bygone entities of a once-treasured past." 

Meet the President of Europe
Nov 26th, 2009
Daily Newsbrusselsjournal.com
Categories: Today's Headlines;Revived Roman Empire

Herman Van Rompuy. Get used to the name. He is the first President of the European Union, which with the ratification of the Treaty of Lisbon by all the 27 EU member states in early November was transformed into a genuine United States of Europe.

The President of Europe has not been elected; he was appointed in a secret meeting of the heads of government of the 27 EU member states. They chose one of their own. Herman Van Rompuy was the Prime Minister of Belgium. I knew him when he was just setting out, reluctantly, on his political career.

To understand Herman, one must know something about Belgium, a tiny country in Western Europe, and the prototype of the EU. Belgians do not exist as a nation. Belgium is an artificial state, constructed by the international powers in 1830 as a political compromise and experiment. The country consists of 6 million Dutch, living in Flanders, the northern half of the country, and 4 million French, living in Wallonia, the southern half. The Belgian Dutch, called Flemings, would have preferred to stay part of the Netherlands, as they were until 1830, while the Belgian French, called Walloons, would have preferred to join France. Instead, they were forced to live together in one state.

Belgians do not like their state. They despise it. They say it represents nothing. There are no Belgian patriots, because no-one is willing to die for a flag which does not represent anything. Because Belgium represents nothing, multicultural ideologues love Belgium. They say that without patriotism, there would be no wars and the world would be a better place. As John Lennon sang “Imagine there’s no countries, it isn’t hard to do, nothing to kill or die for, and no religion too.”

In 1957, Belgian politicians stood at the cradle of the European Union. Their aim was to turn the whole of Europe into a Greater Belgium, so that wars between the nations of Europe would no longer be possible as there would no longer be nations, the latter all having been incorporated into an artificial superstate.

A closer look at Belgium, the laboratory of Europe, shows, however, that the country lacks more than patriotism. It also lacks democracy, respect for the rule of law, and political morality. In 1985, in his book De Afwezige Meerderheid (The Absent Majority) the late Flemish philosopher Lode Claes (1913-1997) argued that without identity and a sense of genuine nationhood, there can also be no democracy and no morality.

One of the people who were deeply influenced by Dr. Claes’s thesis was a young politician named Herman Van Rompuy. In the mid-1980s, Van Rompuy, a conservative Catholic, born in 1947, was active in the youth section of the Flemish Christian-Democrat Party. He wrote books and articles about the importance of traditional values, the role of religion, the protection of the unborn life, the Christian roots of Europe and the need to preserve them. The undemocratic and immoral nature of Belgian politics repulsed him and led to a sort of crisis of conscience. Lode Claes, who was near to retiring, offered Herman the opportunity of succeeding him as the director of Trends, a Belgian financial-economic weekly magazine. It is in this context that I made Herman’s acquaintance. He invited me for lunch one day to ask whether, if he accepted the offer to enter journalism, I would be willing to join him. It was then that he told me that he was considering leaving politics and was weighing the options for the professional life he would pursue.

I am not sure what happened next, however. Maybe word had reached the leadership of the Christian Democrat Party that Herman, a brilliant economist and intellectual, was considering leaving politics; perhaps they made him an offer he could not refuse. Herman remained in politics. He was made a Senator and entered government as a junior minister. In 1988, he became the party leader of the governing Christian-Democrats.

Our paths crossed at intervals until 1990, when the Belgian Parliament voted a very liberal abortion bill. The Belgian King Baudouin (1930-1993), a devout Catholic who suffered from the fact that he and his wife could not have any children, had told friends that he would “rather abdicate than sign the bill.” The Belgian politicians, convinced that the King was bluffing, did not want the Belgian people to know about the King’s objections to the bill. I wrote about this on the op-ed pages of The Wall Street Journal and was subsequently reprimanded by the Belgian newspaper I worked for, following an angry telephone call from the then Belgian Prime Minister, a Christian-Democrat, to my editor, who was this Prime Minister’s former spokesman. I was no longer allowed to write about Belgian affairs for foreign newspapers.

In April 1990, the King did in fact abdicate over the abortion issue, and the Christian-Democrat Party, led by Herman Van Rompuy, who had always prided himself on being a good Catholic, had one of Europe’s most liberal abortion bills signed by the college of ministers, a procedure provided by the Belgian Constitution for situations when there is no King. Then they had the King voted back on the throne the following day. I wrote about the whole affair in a critical follow-up article for The Wall Street Journal and was subsequently fired by my newspaper “for grievous misconduct”. A few weeks later, I met Herman at the wedding of a mutual friend. I approached him for a chat. I could see he felt very uncomfortable. He avoided eye contact and broke off the conversation as soon as he could. We have not spoken since.

Herman’s political career continued. He became Belgium’s Budget Minister and Deputy Prime Minister, Speaker of the Chamber of Representatives and finally Prime Minister. He kept publishing intellectual and intelligent books, but instead of defending the concept of the good, he now defended the concept of “the lesser evil.” And he began to write haiku.

Two years ago, Belgium faced its deepest political crisis ever. The country was on the verge of collapse following a 2003 ruling by its Supreme Court that the existing electoral district of Brussels-Halle-Vilvoorde (BHV), encompassing both the bilingual capital Brussels and the surrounding Dutch-speaking countryside of Halle-Vilvoorde, was unconstitutional and that Parliament should remedy the situation. The ruling came in response to a complaint that the BHV district was unconstitutional and should be divided into a bilingual electoral district Brussels and a Dutch-language electoral district Halle-Vilvoorde. This complaint had been lodged by… Herman Van Rompuy, a Flemish inhabitant of the Halle-Vilvoorde district.

In 2003, however, the Christian-Democrats were not in government and Herman was a leader of the opposition. His complaint was intended to cause political problems for Belgium’s Liberal government, which refused to divide the BHV district because the French-speaking parties in the government refused to accept the verdict of the Supreme Court. The Flemish Christian-Democrats went to the June 2007 general elections with as their major theme the promise that, once in government, they would split BHV. Herman campaigned on the issue, his party won the elections and became Flanders’ largest party.

Belgium’s political crisis dragged on from June until December 2007 because it proved impossible to put together a government consisting of sufficient Dutch-speaking (Flemish) and French-speaking (Walloon) politicians. The Flemings demanded that BHV be split, as instructed by the Supreme Court; the Walloons refused to do so. Ultimately, the Flemish Christian-Democrats gave in, reneged on their promise to their voters, and agreed to join a government without BHV being split. Worse still, the new government has more French-speaking than Dutch-speaking ministers, and does not have the support of the majority of the Flemings in Parliament, although the Flemings make up a 60% majority of the Belgian population. Herman became the Speaker of the Parliament. In this position he had to prevent Parliament, and the Flemish representatives there, from voting a bill to split BHV. He succeeded in this, by using all kinds of tricks. One day he even had the locks of the plenary meeting room changed so that Parliament could not convene to vote on the issue. On another occasion, he did not show up in his office for a whole week to avoid opening a letter demanding him to table the matter. His tactics worked. In December 2008, when the Belgian Prime Minister had to resign in the wake of a financial scandal, Herman became the new leader of the predominantly French-speaking government which does not represent the majority of Belgium’s ethnic majority group. During the past 11 months, he has skillfully managed to postpone any parliamentary vote on the BHV matter, thereby prolonging a situation which the Supreme Court, responding to Herman's own complaint in 2003, has ruled to be unconstitutional.

Now, Herman has moved on to lead Europe. Like Belgium, the European Union is an undemocratic institution, which needs shrewd leaders who are capable of renouncing everything they once believed in and who know how to impose decisions on the people against the will of the people. Never mind democracy, morality or the rule of law, our betters know what is good for us more than we do. And Herman is now one of our betters. He has come a long way since the days when he was disgusted with Belgian-style politics.

Herman is like Saruman, the wise wizard in Tolkien’s Lord of the Rings, who went over to the other side. He used to care about the things we cared about. But no longer. He has built himself a high tower from where he rules over all of us.

Israel Readying New Arms to Meet Iran Challenge
Nov 26th, 2009
Daily Newsnews.yahoo.com
Categories: Today's Headlines;The Nation Of Israel;War

With cutting-edge anti-missile systems and two new submarines that can carry nuclear weapons, Israel is readying a new generation of armaments designed to defend itself against distant Iran as well as Tehran's proxy armies on its borders.

Having failed to crush Hamas' firepower in its Gaza offensive last winter, or Hezbollah's in its 2006 war in Lebanon, Israel is turning to an increasingly sophisticated mix of defensive technology.

A system that can unleash a metallic cloud to shoot down incoming rockets in the skies over Gaza or Lebanon has already been successfully tested, according to its maker, and is expected to be deployed next year. The army is developing a new generation of its Arrow defense system designed to shoot down Iran's long-range Shihab missiles outside the Earth's atmosphere.

It has three German-made Dolphin submarines and is buying two more. They can be equipped with nuclear-tipped missiles which analysts say could be stationed off the coast of Iran. Israel says Iran, despite its denials, is trying to acquire atomic weapons. It has never confirmed its Dolphin fleet has nuclear capabilities, but senior officials acknowledge that commanders are fast at work devising a strike plan in case diplomacy fails.

The missile projects have their critics in Israel, who question their effectiveness and say they are too costly. And many Israelis would probably agree with U.S. former President Bill Clinton's recent warning to an Israeli audience that the country could achieve true security only by making peace with its enemies, who he said would always be able to improve their ability to attack.

"The trajectory of technology is not your friend," he said. "You need to get this done."

Under their overarching fear of nuclear annihilation by Iran, whose regime has repeatedly called for Israel's extinction, the more immediate threat is seen as coming from Iranian-backed Hezbollah and Hamas.

Israel's military believes Hezbollah has tripled its prewar arsenal to more than 40,000 rockets, some of which can strike virtually anywhere in Israel — a dramatic improvement over the short-range missiles fired in 2006.

Hamas has also increased its rocket arsenal since last winter's fighting, said a senior military official who spoke on condition of anonymity in accordance with army regulations. Hamas recently test-fired a rocket that can travel up to 60 kilometers (40 miles), putting the Tel Aviv area within range for the first time, according to Maj. Gen. Amos Yadlin, Israel's military intelligence chief.

Israel's defense industry says it is close to deploying Iron Dome, a system that will use cameras and radar to track incoming rockets and shoot them down within seconds of their launch. The system is so sophisticated that it can almost instantly predict where a rocket will land, changing its calculations to account for wind, sun and other conditions in fractions of a second.

Shooting down a missile is a bit like stopping a bullet with a bullet. But Eyal Ron, one of Iron Dome's developers, said his system will fire an interceptor that explodes into a cloud of small pieces which make it unnecessary to score a direct hit.

"It's a great advantage because to bring an interceptor to a target flying at incredible speed to an exact point is very hard," said Ron, a specialist at mPrest Systems Ltd., an Israeli software firm developing the system along with local arms giant Rafael.

He said recent tests in Israel's southern desert were successful, and a final dress rehearsal is expected in December before the system goes live next year.

While Israelis who have endured years of rocket fire from Gaza are sure to welcome Iron Dome, the system does not have wall-to-wall support.

"Maybe it will be good during times like this when you have 10 rockets, but not for a war. If you invest in such a system, I think you're going to go bankrupt," said Gabriel Saboni, the head of the military research program at Israel's Institute for National Security Studies.

Iron Dome is one part of a larger strategy that includes more tanks and dozens of new armored personnel carriers equipped with technology to repel anti-tank missiles.

The ultimate trump card is a nuclear arsenal Israel refuses to acknowledge but which no one doubts exists.

The strategy that became obvious in the Lebanon and Gaza wars was simply one of overwhelming force to deter further attack. 

This policy appears to have bought Israel a fragile calm on both its northern and southern borders, but it has come at a heavy price. 

The military brass are deeply concerned that international criticism of Israel's conduct of the Gaza war, including allegations of war crimes contained in a high-profile U.N. report, will tie their hands in the future. 

Military officials speaking on condition of anonymity said large resources are going into developing increasingly accurate weapons, such as bombs that cause damage over a smaller area and noisemaking explosions that scare away civilians before real bombs are dropped. 

Few expect the current quiet to last indefinitely, and muscle-flexing on all sides attests to the elusiveness of a peaceful Middle East. 

Iran is conducting large-scale air defense war games this week designed to protect its nuclear facilities from attack. Israel recently moved warships through the Red Sea toward Iran, and three weeks ago the Israeli navy captured a ship, the Francop, that it said was carrying a huge cache of Iranian weapons bound for Hezbollah. 

Last week Netanyahu boarded a Dolphin submarine and then the missile ship that led the capture of the Francop. He thanked crew members for seizing the haul and told them that Israel is Iran's first target, "but not the last" — reflecting his contention that Iranian ambitions are not just an Israeli problem.

Israel Officially Freezes Settlements, Palestinians Still Don't Want Peace Talks
Nov 26th, 2009
Daily NewsIsrael Today
Categories: Today's Headlines;Peace Process

Israel's cabinet on Wednesday voted in favor of a proposal by Prime Minister Benjamin Netanyahu to officially freeze all new construction in Jewish settlements in Judea and Samaria for a period of 10 months to give peace talks with the Palestinians another chance.

Speaking to the nation following the vote, Netanyahu insisted that "now is time to move forward toward peace. There is no more time to waste. Israel has taken a far-reaching step toward peace, it is time for the Palestinians to do the same."

The decision did not include the eastern half of Jerusalem, where the Palestinians and the international community also accuse Israel of settlement activity, and will also not halt construction on 3,000 Jewish housing units already being built in the so-called "West Bank."

The cabinet vote was really just an official public announcement of a policy Netanyahu has been implementing since he took office in March. Since then, Israel has not authorized construction of any new housing developments in Judea and Samaria, and has only allowed select projects to go forward in Jerusalem.

Nevertheless, US Secretary of State Hillary Clinton lauded the announcement of an official settlement freeze, and said it would certainly "help move forward" the stalled peace process. US Middle East envoy George Mitchell described the decision as "significant" and said it would have a "substantial impact on the ground."

But the Palestinians took a much different view. Emboldened by US President Barack Obama's recent strong criticism of Jewish building projects in Jerusalem, Palestinian leader Mahmoud Abbas said Israel's decision meant nothing, since the new red line for restarting talks was now a halt to Jewish construction in parts of the holy city claimed by the Palestinians.

"Jerusalem is the red line for the Palestinians and Arabs," Abbas said in a statement released though his spokesman, Nabil Abu Rudaineh. "Any return to negotiations must be on the basis of a complete settlement freeze, and in Jerusalem foremost."

Israeli Foreign Minister Avigdor Lieberman fired back on Thursday, noting that Israel did not actually care what Abbas thought of its decision, which was primarily made to show the US and the international community that Israel is willing to make compromises for peace, while it is the Palestinians who refuse to move forward.

Deputy Foreign Minister Danny Ayalon told reporters that the decision would be "sufficient to demonstrate whether the Palestinians are serious about peace or just serial excuse givers."

'US Warned China That Israel Could Bomb Iran'
Nov 26th, 2009
Daily NewsJpost
Categories: Today's Headlines;War

Two senior officials from the White House, Dennis Ross and Jeffrey Bader, made a trip to China on a "special mission" to garner support in Beijing over the Iranian nuclear program, according to a Thursday report in The Washington Post. The officials visited China two weeks before US President Barack Obama arrived in Beijing.

The officials reportedly carried the message that if China would not support the US on the issue, Israel would be likely to bomb Iranian nuclear facilities. The paper quoted the officials as saying that Israel saw the issue as "an existential issue," and that "countries that have an existential issue don't listen to other countries."

They stressed that were Israel to bomb Iran, the consequences for the region would be severe.

The efforts seemed to have yielded results, according to White House officials quoted in the report, as the six world powers, including both China and Russia, put together a resolution critical of Iran's nuclear program earlier this week.

The development was significant as it groups Russia and China with the four Western powers - the US, Britain, France and Germany - in unified criticism of Iran's nuclear program. Russia and China have acted as a drag on Western calls for tougher action against Iran.

While the board passed an IAEA resolution critical of Iran in 2006 with the support of all six world powers, subsequent attempts by the West to get backing from all 35 board nations foundered on resistance from Russia and China.

While any board resolution is mostly symbolic, it does get reported to the UN Security Council. Beyond that, unified action in Vienna could signal that both Russia and China may be more amenable to a fourth set of Security Council sanctions on Iran than they have been in past years.

The draft urges Iran to open its nuclear program to wider perusal by the IAEA, they said. As well, it calls on Iran to answer all outstanding questions on that enrichment facility, comply with UN Security Council demands that it suspend enrichment and further construction of the plant, and stop stonewalling an IAEA probe of allegations it tried to develop nuclear weapons.

'fatah Officials Warn of Third Palestinian Intifada'
Nov 26th, 2009
Daily Newshaaretz.com
Categories: Today's Headlines;The Nation Of Israel;Warning

Fatah had made a strategic decision to declare a third intifada against Israel, movement officials told Nazereth-based newspaper Hadith Anas, citing the failed peace talks as the reason for their resolution. 

The newspaper report quoted Fatah Central Committee members as saying that the movement wished to implement a decision made during its sixth convention, which assembled last August in the West Bank city of Bethlehem. 

One of the movement's top officials interviewed by Hadith Anas said the third intifada will have a widespread popular base, adding, however, that unlike the previous popular struggle against Israel, which was sparked in September 2000, the movement will not endorse an armed struggle or the use of firearms. 

"We want thousands of Palestinians to demonstrate daily near the settlements of the occupation, carrying out a human siege, and calling for the end of the occupation," one senior official said. 

According to the report, Fatah chief and Palestinian Authority President Mahmoud Abbas agreed to the resolution in principle, stipulating only that the struggle mustn't become a violent one. 

Sources estimate that Abbas could prepare the conditions which would allow for such a move by stepping down as PA President as well as by declaring the dissolution of the PA by the end of the year. 

Fatah officials had commented recently on the need to duplicate the weekly anti-separation fence rallies in the villages of Na'alin and Bil'in in locations across the West Bank, as well as turning some of those demonstrations against nearby settlements. 

A senior member of an Arab-Israeli Knesset party, who maintains close ties with top Fatah and PA officials, said that anti-separation fence rallies could spark renewed popular resistance, if they continued to escalate as they did week ago near the Kalandia checkpoint. 

The official said that PA sources have come to understand that unarmed popular resistance, centering on symbols of the West Bank occupation, could garner sympathy for the Palestinian cause in international circles as well as embarrassing the Israeli government. 

"The first intifada gained significant diplomatic ground as far as the Palestinians are concerned since its symbol, a boy throwing rocks at a tank, made it impossible for Israel to claim it was defending itself against terror as it did in the second intifada, followings the city-center bombings," the official said