This assent was a foregone conclusion, given the backing of the opposition Social Democrats and Greens. In any case, the vote merely ratifies the EU deal reached more than two months ago - itself too little, too late, rendered largely worthless by very fast-moving events.

The significance is entirely the opposite. The furious debate over the erosion of German fiscal sovereignty and democracy - as well as the escalating costs of the EU rescue machinery - has made it absolutely clear that the Bundestag will not prop up the ruins of monetary union for much longer.

Horst Seehofer, the leader of Bavaria's Social Christians, said his party would go "this far, and no further". There can be no question of beefing up the EFSF to 2 trillion euros or any other sum, whether by leverage or other forms of structured trickery. "The financial markets are beginning to ask whether Germans can afford all this help. We must not risk the creditworthiness of the German state," he said.

He might be "very happy" that the German parliament approved the expansion of the euro rescue fund on Thursday, but European Commission President Jose Manuel Barroso appears far from happy with how the European Union is currently functioning. In a hard-hitting interview with Friday's edition of the German daily Suddeutsche Zeitung, Barroso warned that the EU was in its "deepest ever crisis" and said that the bloc needed a more closely coordinated economic policy in order to stabilize the euro zone and the entire EU.

He called for more power for the EU's institutions, arguing that it was an "illusion" to think that the euro zone's economic policy could be coordinated just by the European Council, the institution that comprises the leaders of the EU's 27 members, which meets twice a year. He said that setting rules for a stable euro zone could not only be left to the member states. "That will never work," he said, explaining that national governments "always try to negotiate." Barroso said there was a good reason why there were independent institutions such as the European Commission - the EU's executive body - and the EU's Court of Justice.

Meanwhile, former German Finance Minister Peer Steinbruck - who is widely regarded as the likely chancellor candidate of the center-left Social Democrats in the 2013 German election - has said it is time to openly admit that Greece is "virtually bankrupt." "One can put it more drastically and say that (Greece) will not be able to return to the capital markets in the next few years," Steinbruck said in remarks to the German public broadcaster ARD. He said he was convinced that a decision would soon be made on a so-called haircut on Greek debt, which would involve creditors taking losses on part of their bond holdings. Steinbruck said that "many" private-sector creditors would also be affected.

It was one of the most anticipated parliamentary votes of the year. If it had gone wrong, it could have cost Angela Merkel her chancellorship. In the end, Merkel managed to pull it off - as she has so often in the past. The Bundestag passed the expansion of the euro backstop fund, the EFSF, with 523 votes in favor, 85 against and three abstentions. The result meant that Merkel could breathe a sigh of relief. There had been concern that renegades within her center-right coalition could force the chancellor to rely on opposition votes to pass the legislation. Had that happened, her power would have been severely curtailed.

In the end, however, 315 parliamentarians from Merkel's conservatives and from her junior coalition partners, the Free Democrats, voted in favor of the EFSF expansion. If the total had been below the so-called "chancellor's majority" of 311, it would have meant that Merkel was reliant on opposition votes, indicating she could no longer rely on the support of her own coalition. On Friday, the Bundesrat, Germany's upper legislative chamber, also approved the EFSF expansion.

The conservative daily Die Welt writes: "Europe is, without a doubt, in danger. Not because the citizens of Europe don't like the EU, but because they don't understand it. Because they can't even recognize it. Because no one explains what it's good for, what form it should take in the future and how to get there, step by step. The powers-that-be only say that the European Union must exist - there is no alternative. They also warn that talking about the dangers only causes them to grow - and so it's better to keep quiet."

"It doesn't seem to bother anyone that the EU is using its own private language... Nobody has a problem with the fact that the urgently needed rescue fund was given the clunky name of the 'European Financial Stability Facility.' Doesn't anyone realize that no one understands what's going on, that no one can even picture (the EFSF) in their minds? And doesn't anyone realize that these words don't sound like something worth saving, but something dangerous that would be better avoided?"

"Democracy can have many faces - even an absolutist one. Europe's democracies are taking on such features right now. Because so many leaders regard the European project as so titanic, they have abandoned all hope of being able to explain it to the general public. Leaders are ignoring their citizens because, hey, they're not going to understand it anyway... This attitude might buy time, but it gambles away Europe's reputation, its future and its legitimacy."

Fox News has learned that two Predator drones hovering above al-Awlaki's convoy fired the Hellfire missiles which killed the terror leader. According to a senior US official, the operation was carried out by Joint Special Operations Command, under the direction of the CIA. A total of four people were killed in the attack. President Obama called the strike a major "milestone" in the fight against Al Qaeda and its affiliates.

"The death of Awlaki is a major blow to Al Qaeda's most active operational affiliate," Obama said Friday. "He took the lead in planning and directing efforts to murder innocent Americans... and he repeatedly called on individuals in the United States and around the globe to kill innocent men, women and children to advance a murderous agenda." He said the strike is "further proof that Al Qaeda and its affiliates will find no safe haven anywhere in the world."

Al-Awlaki was a US-born Islamic militant cleric who became a prominent figure with Al Qaeda in the Arabian Peninsula, the network's most active branch. He was involved in several terror plots in the United States in recent years, using his fluent English and Internet savvy to draw recruits to carry out attacks. President Obama signed an order in early 2010 making him the first American to be placed on the "kill or capture" list.

But with the Government's favoured yardstick, the Consumer Prices Index (CPI) rising at an annual rate of 4.5 per cent - and the Retail Prices Index (RPI) showing 5.2 per cent - many may underestimate the cumulative threat. Simon Broadley of Yorkshire Building Society said: "With the average savings account standing at 11,648 pounds this can have a significant effect on a person's savings - especially over the long-term, given the current market."

"Over 10 years someone with the typical savings pot in a basic easy access savings account would have earned 1,624 pounds in interest, leaving its nominal value at 13,272 pounds. However, for them to have the same spending power as when they invested - their savings would need to have grown to 15,700 pounds - a difference of 2,428 pounds." Michelle Slade of the independent website Moneyfacts, added: "People can see the impact of rising prices on their everyday spending, but neglect to see the impact on their savings as the actual size of their savings pot is still seemingly growing."

The cumulative effect has been similar to a slow motion bank robbery, with savers suffering for the benefit of borrowers because inflation transfers wealth from the former to the latter by reducing the real value of debts as well as savings. This unstated policy is unlikely to change soon because the government is Britain's biggest debtor and also the biggest beneficiary from negative real interest rates. No politician will say that savers must be punished for their prudence in order to protect borrowers from the consequences of excessive debt but that is what government policy amounts to.

German Finance Minister Wolfgang Schauble can be an extremely polite man when he wants to be. At the same time, the many difficult years he has spent in politics have equipped him with an incomparable sarcasm. Schauble often walks a fine line between derision and civility. Schauble has recently been using a phrase that allows himself to conceal his frustration. He uses it in interviews, in internal meetings and in personal conversations, and it marks the beginning of some of his sentences. It can be loosely translated as: "Without presuming to impinge on the chancellor's authority."

Schauble had the opportunity to use the phrase once again recently. The steering committee of Angela Merkel's conservative Christian Democratic Union (CDU), to which Schauble belongs, was meeting with the assembled leaders of German trade unions. The union bosses were listening to the chancellor talk about the European Union, and yet what she was saying didn't make much sense to them. Schauble spoke up: "Without presuming to impinge on the chancellor's authority, I would also like to say something about Europe." "Should I step out of the room for a moment?" Merkel asked. At least it was a spontaneous attempt to make a joke.

Perhaps Merkel will be able to scrape together her own majority this Thursday, or cobble together a majority with votes from the opposition. But if it's merely a slim majority or if notable members of parliament from the coalition parties are among the no-votes and abstentions, Merkel will no longer be able to take the easy way out and nonchalantly declare the dissidents to be a problem - or have other people declare them to be a problem.

If that happens, it will become apparent that she is in fact the problem, and that she is incapable of explaining, convincing or leading. Then she will have forfeited her chancellorship, no matter how much longer it lasts.

"Pakistan is willing to do its best with the international partners and, most notably, the governments of Afghanistan and the United States, to acquit itself of this high responsibility (in Afghanistan)," she told the 193-nation assembly.

But her remarks came after Pakistan warned the United States to stop accusing it of playing a double game with Islamist militants and as it showered praise on China.

Now the US must deal with the threat of a jihad that security analysts warn would create serious problems for the US as it tries to end violence originating in Pakistan - and the Pakistani government can't be trusted, even if there's no alternative. The religious leaders threatening jihad are associated with the Sunni Ittehad Council (SIC), a coalition of local groups. According to Pakistani news reports, the council issued a press release declaring that it is illegitimate to call the US a superpower because only Allah deserves the title.

The scholars urged the Pakistani government to end the country's role in the war on terrorism and to try to establish a new international bloc made up of China, Turkey, Iran, Afghanistan and Pakistan. An analyst told FoxNews.com that the threat should be taken seriously.

The program, called Disaster SNAP (supplemental nutrition assistance program), was created by the federal government and is administered by the State Department of Public Welfare. Because of unexpectedly large turnouts, the application process was moved from Disaster Recovery Centers in Philadelphia to the 12 state offices in neighborhoods citywide.

Residents, based on income, household size and proof of flood-damage can receive up to a month's worth of food stamps. Those already receiving food stamps are eligible for partial relief, to the extent that their prior month's food supply was damaged. Throughout the day Monday, and beginning early Tuesday morning, many state offices had lines stretching for blocks with confused residents, many alerted by other neighbors that relief was available.

During my recent stint in the Obama administration as director of the Office of Management and Budget, it was clear to me that the country's political polarization was growing worse - harming Washington's ability to do the basic, necessary work of governing. If you need confirmation of this, look no further than the recent debt-limit debacle, which clearly showed that we are becoming two nations governed by a single Congress - and that paralyzing gridlock is the result.

So what to do? To solve the serious problems facing our country, we need to minimize the harm from legislative inertia by relying more on automatic policies and depoliticized commissions for certain policy decisions. In other words, radical as it sounds, we need to counter the gridlock of our political institutions by making them a bit less democratic.

German finance minister Wolfgang Schauble said it would be a folly to boost the EU's bail-out machinery (EFSF) beyond its 440 billion euros lending limit by deploying leverage to up to 2 trillion euros, perhaps by raising funds from the European Central Bank. "I don't understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense," he said.

Mr Schauble told Washington to mind its own businesss after President Barack Obama rebuked EU leaders for failing to recapitalise banks and allowing the debt crisis to escalate to the point where it is "scaring the world". "It's always much easier to give advice to others than to decide for yourself. I am well prepared to give advice to the US government," he said.

The comments risk irritating the White House. US Treasury Secretary Tim Geithner has been a key driver of plans to give the EFSF enough firepower to shore up Italy and Spain, fearing a drift into "cascading default, bank runs and catastrophic risk" without dramatic action. The danger for Germany is that America will lose patience, with unpredictable consequences. The US Federal Reserve is currently propping up the European banking system in a variety of ways, including dollar swaps.

Markets across the world ignored the mixed signals about the true scope of EU rescue measures, convinced that EU leaders have a "grand plan" up their sleeves and will unveil the details after the Bundestag has voted on Thursday on the earlier July deal to revamp the fund.

"Like the arrogant powers that are present near our marine borders, we will also have a powerful presence close to American marine borders," the head of the Navy, Rear Admiral Habibollah Sayyari said, according to the official IRNA news agency. Speaking at a ceremony marking the 31st anniversary of the start of the 1980-1988 war with Iraq, Sayyari gave no details of when such a deployment could happen or the number or type of vessels to be used.

The declaration comes just weeks after Turkey said it would host a NATO early warning radar system which will help spot missile threats from outside Europe, including potentially from Iran. The decision has angered Tehran which had enjoyed close relations with Ankara. And it comes a few months after Iran sent warships through the Suez canal, after the fall of former Egyptian President Hosni Mubarak, the first time the Islamic Republic had deployed navy vessels in the Mediterranean.

The United States and Israel have not ruled out military action against Iran if diplomacy fails to stop it getting nuclear weapons. Tehran denies it is developing nuclear arms saying its atomic program is for purely peaceful purposes. Iran has dismissed the threats, warning that it will respond by hitting US interests in the Gulf and Israel if any such attack happened. Analysts say Tehran could retaliate by launching hit-and-run strikes in the Gulf and by closing the Strait of Hormuz, the waterway where about 40 percent of all traded oil passes.

Mr Rastani said: "We don't really care whether they're going to fix the economy, our job is to make money from it. The 1930s depression wasn't just about a market crash. There were some people who were prepared to make money from that crash. I think anyone can do that."

"It's an opportunity. When the market crashes, if you know what to do, if you have the right plan to set up, you can make a lot of money from this." Describing the current economic turmoil as a "cancer", Mr Rastani said the rescue package being put together by governments to save the euro zone was doomed to failure. He said: "I'm fairly confident the euro is going to crash and its going to fall pretty hard, because markets are ruled right now by fear."

A proposed 2.6 trillion pounds euro-zone rescue package is expected to be announced within days and could be in place within weeks. But Mr Rastani told BBC TV it was "wishful thinking" to believe governments could prevent another recession. "Governments don't rule the world," he said. "Goldman Sachs rules the world. Goldman Sachs does not care about this rescue package." Other financial experts slammed the comments as "insensitive and crass". Max Johnson, a foreign exchange broker at Currency Solutions, said: "To say anyone can make money from a crash is massively out of touch with the man in the street who, right now, is really feeling the economic downturn and market dip."

But many seemed to support Mr Rastani and took to the internet to praise his honesty. On the trader's Facebook page, Rob Russo said: "God bless you for speaking the truth on the interview with the BBC. Many, millions, will be caught completely unprepared." "Western power and prosperity will be gone if we don't wake up our fellow citizens to this coming crisis and help them save their wealth to have something left to rebuild with later." "Thanks again, we need more honest men in this world to tell the truth to the sleeping masses."

But to spare him the shame of a 30-second walk in public, the private company which transports prisoners sent a fortified van across three counties to drive him there at an estimated cost of 1,000 pounds.

This made him late for a separate appearance on an attempted robbery charge at Oxford Crown Court, where Judge Tom Corrie condemned the waste of taxpayer cash. 'I'm not quite sure why he couldn't be walked across the street rather than sending a van from Southampton,' he said. 'I wonder how much public money has been wasted.'

Thomas had been held at the police station after being arrested over two alleged public order offences. GEOAmey, the company responsible for transporting prisoners, is based in Oxford, a few miles from Banbury. However, it claims, its local staff were all busy so it decided to send a van on the two-hour journey from Southampton to avoid walking Thomas between the two buildings and to protect his identity. A spokesman insisted: 'Police wouldn't expect us to turn up at Banbury, handcuff a prisoner and take him down the street and to the court.

GEOAmey is paid more than 90 million pounds a year to transport defendants between prisons, police stations and courts on behalf of the Ministry of Justice. Glyn Travis, of the Prison Officers' Association, said: 'This is a prime example of how the privatised system is a constant drain on public resources. In the past police would have been able to walk him to the station themselves but now because of the contracts with private companies they are not able to do so. It is wrong for the contractors to think they needed to move a van nearly 100 miles to protect the human rights of the prisoner.'

The gold price has a history of extreme volatility on its climb to record highs. Between May and June 2006 the price fell by 25 per cent. Between March and November 2008 the price fell 33 per cent.

"Short term, there's clear demand destruction in gold derivatives right now, just as happened during Lehman's collapse," says Adrian Ash, head of research at BullionVault, which provides an online gold market for private investors. "The dollar and Japanese yen rally also continues to hurt gold prices," he added. "Long term, gold tends to fall when other investments - shares, bonds, even cash - offer a better opportunity. So it's hard to see this drop as the end of gold's 10-year bull market because everything else looks just as bad today as it did last month," Mr Ash said.

Analysts have found it difficult to forecast when gold will find a floor, but see support coming relatively soon. "As gold exchange-trade funds are hardly registering any outflows at the moment, the strong price correction should essentially be due to profit-taking of speculative financial investors," said Carsten Fritsch, an analyst at Commerzbank. "Net long positions fell for the second straight week by 14 per cent in the week ending September 20."

The gold bubble is only likely to end when confidence in central banks' policymakers across the globe has been restored. With economic indicators likely to remain gloomy for some time, the bubble doesn't look ready to pop just yet.

Andreas Vosskuhle, head of the constitutional court, said politicians do not have the legal authority to sign away the birthright of the German people without their explicit consent. "The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution)," he said. "There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit - which might be politically legitimate and desirable - then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people," he told newspaper Frankfurter Allgemeine.

The extraordinary interview comes just days before the Bundestag votes on a bill to revamp the EU's 440 billion euros bail-out fund (EFSF), enabling it to purchase EMU bonds pre-emptively and recapitalise banks. Tensions are running high after it emerged over the weekend that officials are working on plans sketched by the US Treasury and the European Commission to "leverage" the firepower of the EFSF to 2 trillion euros, in conjunction with lending from the European Central Bank.

Carsten Schneider, finance spokesman for the Social Democrats, demanded that Chancellor Angela Merkel and finance minister Wolfgang Schauble clarify their "true intentions " before the vote on Thursday. "A new multi-trillion programme is being cooked up in Washington and Brussels, while the wool is being pulled over the eyes of the Bundestag and German public. This is unacceptable," he said.

Prince Hermann Otto zu Solms-Hohensolms-Lich, the Bundestag's deputy president and finance chief for the Free Democrats (FDP) in the ruling coalition, expressed outrage over the secret plans. "Unless the German finance minister can give an immediate assurance that there will be no leveraged formula, I will not vote for this law. We might as well dispense with months of negotiations if all this means is that the Bundestag will be circumvented and served cold left-overs," he said