Data released by the New York Federal Reserve shows that foreign central banks have cut their stash of US Treasuries by $48bn since late July, with falls of $32bn in the last two weeks alone. "This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.

"We won't know if China is behind this until the Treasury releases its TIC data in November, but what it does show is that world central banks are in a hurry to get out of the US. They don't seem to be switching into other currencies, so it is possible they are moving into gold instead. Gold is now gaining momentum across all currencies and has broken through resistance at 500 euros," he said.

While the greenback has been resilient over recent weeks - even regaining something of a 'safe-haven' role as banks scrambled to buy the currency to cover dollar debts - most experts believe that America's $850bn current account deficit will eventually cause the dollar to resume its relentless slide.

David Powell, an economist at IDEAglobal in New York, pointed the finger at Beijing as the main suspect in the sudden bond flight this summer. In a client note entitled "Has China started to dump US Treasuries?", he said the sales appear to coincide with early moves by Beijing to launch its new $300bn sovereign wealth fund.

Any evidence that China was pulling out would risk setting off an unstoppable stampede, which is why such a policy would never be announced. It holds the world's biggest pool of reserves, followed by Japan.

State-sponsored "cyber-terrorists" - believed to be part of China's vast People's Liberation Army - have been linked to a string of attempts to hack into UK Government computer systems, including at least one assault targeting the Foreign Office.

Security analysts believe the operations are part of Beijing's strategy to build a "cyber army" - trained to break into and cripple the computer systems of China's potential enemies, leaving them hugely vulnerable in a time of crisis or war. The disturbing claims follow a series of similar hacking assaults reported in America, Germany and elsewhere.

Here the Cabinet Office refused to discuss the threat yesterday, except to say that Britain had "procedures and mechanisms" in place to deal with such issues. According to security analysts computer hacking has evolved dramatically in recent years, from lone individuals attacking corporations to encompass organised crime gangs and now state-sponsored military operations.

China denies all the accusations, although it has publicly stated that it sees "information warfare" as a key part of its strategy, as it struggles to upgrade its own vast but still relatively low-tech military forces.

Western powers such as America and Britain are thought to be particularly vulnerable to large-scale hacking, as their armed forces are increasingly reliant on computer networks and satellites to communicate, target high-tech bombs and missiles and to organise every aspect of military operations. With their computers crippled or swamped by bogus information, military forces could be left blinded and directionless, or bogged down by chaos in their supply chain.

A country could also be crippled in time of crisis by successful attacks on its telecoms networks, transport links, financial sector and utilities. A computer hacking incident which led to part of the House of Commons computer network being shut down last year has since been linked to an organised Chinese group.

Known hacking methods include sending spy software into a low-grade computer used by an enemy government, and using its security weaknesses to gain access to more sensitive networks and data. Another tactic is to infiltrate huge numbers of ordinary PCs around the world and use them to swamp a target computer with millions of simultaneous messages or "hits" via the internet, bringing the whole system grinding to a halt.

The report was ordered by Wakefield Metropolitan District Council after Craig Faunch and Ian Wathey were jailed last year for sexual offences against four boys who were placed in their care. The inquiry found the children had been let down by "failures in performance", both by individuals and in systems put in place by the council.

The report's authors concluded that some staff were not up to the job of dealing with Faunch and Wathey, who had 18 children placed with them between August 2003 and January 2005. "It is clear that these foster carers proved challenging to a number of professional staff, some of whom were ill-equipped for the task of working with them and supervising them in their care of children," the report said.

The document said that council workers had "anxieties" about their actions being viewed as discriminating against gay people. "The fear of being discriminatory led them to fail to discriminate between the appropriate and the abusive," says the report.

Nepal Airlines, which has two Boeing aircraft, has had to suspend some services in recent weeks due to the problem. The goats were sacrificed in front of the troublesome aircraft Sunday at Nepal's only international airport in Kathmandu in accordance with Hindu traditions, an official said.

"The snag in the plane has now been fixed and the aircraft has resumed its flights," said Raju K.C., a senior airline official, without explaining what the problem had been. Local media last week blamed the company's woes on an electrical fault. The carrier runs international flights to five cities in Asia.

It is common in Nepal to sacrifice animals like goats and buffaloes to appease different Hindu deities.

But scientists wanting to use hybrids will still need to make individual applications, the Human Fertilisation and Embryology Authority said. An HFEA consultation showed the public were "at ease" with the idea when told it could pave the way for therapies for conditions such as Alzheimer's disease. Opponents have said many people would be "horrified" by such a move.

Scientists want to create hybrid embryos by merging human cells with animal eggs in a bid to extract stem cells. The embryos would then be destroyed within 14 days. The cells form the basic building blocks of the body and have the potential to become any tissue, making them essential for research.

At the moment, scientists have to rely on human eggs left over from fertility treatment, but they are in short supply and are not always good quality. Two teams from Kings College London and Newcastle University have already applied to the HFEA to use hybrid embryos. It is now expected individual hearings for these two applications will be held in November with other scientists expected to follow suit.

Anthony Ozimic, secretary of pro-life group the Society for the Protection of Unborn Children (SPUC) said he "deplored" the HFEA's decision. "This is not just a case of the 'yuk' factor - there are grave ethical and moral objections to this research and the way it is being promoted."

And Josephine Quintavalle, of the campaign group Comment on Reproductive Ethics, said the HFEA was wrong to be pushing ahead with a decision which should be left to parliament. "Using hybrid embryos has never been acceptable - it offends the dignity of humans and animals." A spokeswoman for the HFEA said the decision had been a challenging one to reach.

Last night, a sudden increase in tremor accompanied the start of a powerful so-called paroxysmal eruption, during which the vent on the E flank of the SE crater, which had been in intermittent mild strombolian activity since mid August, erupted tall lava fountains - several hundres of meters high - and some lava flows. The tall ash columns generated by the intense explosive activity dispersed to the southeast and forced the temporary closure of Catania's airport. The eruption lasted around 7 hrs and ended around 0430hrs this morning.

Mt. Etna, towering above Catania, Sicily's second largest city, has one of the world's longest documented records of historical volcanism, dating back to 1500 BC. Historical lava flows cover much of the surface of this massive basaltic stratovolcano, the highest and most voluminous in Italy. Two styles of eruptive activity typically occur at Etna. Persistent explosive eruptions, sometimes with minor lava emissions, take place from one or more of the three prominent summit craters, the Central Crater, NE Crater, and SE Crater.

Flank eruptions, typically with higher effusion rates, occur less frequently and originate from fissures that open progressively downward from near the summit. A period of more intense intermittent explosive eruptions from Etna's summit craters began in 1995. The active volcano is monitored by the Instituto Nazionale di Geofisica e Volcanologia (INGV) in Catania.

Evidence has also begun to emerge that the liquidity crunch is spilling into the wider economy, increasing the pressure on the Bank to act. Nationwide's consumer confidence index showed that "the number of people who think that now is a good time to make a major purchase such as a house or a car has fallen to a new low of 15pc".

Nationwide's chief economist, Fionnuala Earley, said: "Recent events such as the turmoil in the financial markets may be having something of an impact on sentiment." She added that "one bit of good news for consumers is that the unexpectedly large fall in inflation, along with financial market unrest, means it is now less likely the Bank will feel a further hike in interest rates is necessary".

The Bank makes its monthly decision tomorrow and is widely expected to leave rates on hold.

Prosecutors said they had arrested three suspected members of "an Islamic-motivated terrorist organization" for allegedly plotting attacks on one of Europe's busiest airports and the nearby Ramstein Air Base, a key US and Nato hub. "There was an imminent threat," said Franz Josef Jung, the German defence minister.

Der Spiegel reported in its online edition that the group has been under observation by German authorities for many months and that all three men are considered "radical Islamists" with contacts to terror cells abroad.
German public broadcast network Sudwestrundfunk reported that two of the suspects held German citizenship while the third was Pakistani.

Many of the most famous - including Bordeaux, Sancerre and Saint-Emilion - might not even be from the regions claimed. The scandal was partly blamed on corrupt inspectors who, in the face of increasing competition from New World wines, are said to be allowing inferior wines a prestigious AOC marking.

The famous "Appellation d'Origine Controlee" is a wine classification system which has become the industry's gold standard. It currently awards AOCs - which are clearly marked on bottles - to wines from some 470 regions of France. But, according to the country's UFC-Que Choisir consumer rights group, slack controls saw 99 per cent of all candidate wines awarded their AOC label in 2005. Up to a third of those did not merit the quality stamp, the magazine said.

This happened at a time when wines from New World countries such as Australia, Chile and the United States were outpacing French exports for the first time. Under the current system, wines are labelled according to their often small region of origin, or terroir. The tradition stems from the notion that the combination of soil and climate gives the wine produced there its special character.

New World wines rely more on production methods to earn their reputation. They are also more likely to be categorised by their grape variety or blends than by their region. There was even more bad news for the French wine industry yesterday when it faced up to its smallest harvest in 20 years, hit by a summer of storms and plant diseases brought on by wet weather.

The television, movie and music sectors ranked 15th in spending through the first half of the year, according to the Center for Responsive Politics tally of lobbying disclosure reports that are filed semi-annually with the secretary of the Senate.

While the $27,500,310 that the motion picture, TV and music industry spent is a big number, it's dwarfed by the $89.3 million spent by the pharmaceutical and health products industries. It also is substantially less than that doled out by the entertainment industries' traditional foes -- the computer and Internet industries -- which spent $35.7 million.

Again, those totals seem small when compared with the nearly $1.2 billion spent by the makers of drugs and other health products. The insurance industry was second at a little less than $945 million. Computer and Internet companies ranked fourth at $666.2 million, according to the CRP.

Lord Justice Sedley told BBC News the current England and Wales database, which holds DNA from crime suspects and scenes, was "indefensible". He added it would be fairer to include "everybody, guilty or innocent" on it. The Home Office said the database of four million profiles had helped solve criminal cases, but to expand it would raise logistical and ethical issues.

The DNA database - which is 12 years old - grows by 30,000 samples a month taken from suspects or recovered from crime scenes. There has already been criticism of the database - the largest in the world - because people who are found innocent usually cannot get their details removed.

Since 2004, the data of everyone arrested for a recordable offence in England and Wales - all but the most minor offences - remains on the system regardless of their age, the seriousness of their alleged offence, and whether or not they were prosecuted. It includes some 24,000 samples from young people between 10 and 17 years old, who were arrested but never convicted.

Shami Chakrabarti, director of human rights organisation Liberty, said a database for every man, woman and child in the country was "a chilling proposal, ripe for indignity, error and abuse".

UK PASSPORTS TO CARRY PASSAGES FROM THE REVISED CONSTITUTION
The Yorkshire Post reports that the Government has agreed with proposals from Brussels to stamp passports with passages from the revised Constitution. According to the report the Commission wants to insert Article 20. This outlines peoples' rights as EU citizens and states that they can expect consular protection from the embassies and consulates of other member states. Yorkshire Post

BROWN PLEDGES TO "ENGAGE AND INVOLVE" THE BRITISH PEOPLE IN A "NEW TYPE OF POLITICS"-
but restates opposition to referendum on revised EU Constitution. John Humphrys noted Former Labour Minister Gisela Stuart's argument that the new treaty is "substantively" the same as the EU Constitution, and that the matter had become "a question of trust" for the Government.

Brown claimed that Britain's so-called "red lines" were secure, adding: "It is a completely different proposal as far as Britain is concerned." Yet again Brown was allowed to trot out unchallenged his claim that the 'red lines' are adequate safeguards. Interviewers are still not doing enough TO EXPOSE THE FACT THAT THE RED LINES ARE EXACTLY WHAT THE GOVERNMENT ACHIEVED IN THE NEGOTIATIONS FOR THE ORIGINAL CONSTITUTION ON WHICH THEY PROMISED A REFERENDUM. Sunday Telegraph Times

PRESSURE FOR REFERENDUM DETERRING BROWN FROM EARLY ELECTION?
The Telegraph has a poll showing two-thirds of voters favour a referendum on the revised Constitution.

There was widespread coverage in Saturday's papers of Keith Vaz and Graham Stringer's backing for a referendum on the revised EU Constitution. Stringer said "a defeat would be difficult for the Prime Minister but as the campaign for a referendum gains momentum it will be much more damaging not to hold a referendum than to hold a referendum and lose it ... not to carry it out would be the most damaging thing the government could do."

The Sunday Times reports that Gordon Brown has come under new pressure from Labour Europhiles to hold a referendum on the European Union treaty as Gisela Stuart, the MP for Edgbaston, demanded that it be put to the vote. Stuart, a former junior minister who sat on the steering group that drew up the rejected Constitution, said: "This document, irrespective of what you call it, SUBSTANTIVELY IS STILL THE SAME AS THE CONSTITUTION. This is something which we as Labour MPs went into the 2005 election promising a referendum on. It is a question of trust." Telegraph/Independent/Sunday Times

Philip Johnston argues in the Telegraph that "IF A REFERENDUM IS UN-BRITISH, THEN SO IS LYING TO THE VOTERS." Also writing in this newspaper, Ambrose Evans-Pritchard argues that THE REVIVAL OF THE EU CONSTITUTION MAKES IT MORE LIKELY THAT THE UK WILL LEAVE THE EU.

The BBC Today programme reports that the EU's policy of 'set aside' (paying farmers not to farm a defined area of land) is to be scrapped, reviewing the effects on wildlife. BBC Today

OLMERT OFFERS UP JUDEA, SAMARIA, AND TEMPLE MOUNT?

According to Dr. Guy Bechor, a leading expert on Arab affairs, Israel has agreed, in writing, to hand over 6,250 square kilometres [2,413 square miles] of land -- the equivalent of all of Judea, Samaria and Gaza - to create an Arab terror state. This is based on "leaks from the Palestinian [sic] side". Most of the Jewish communities built in Judea and Samaria over the past 40 years are to be demolished and their inhabitants expelled, according to the plan.

The remaining communities are to be concentrated in small salients for which the Arab state will be compensated with additional territory elsewhere in present-day Israel. A passage of some sort will connect Gaza and Judea and Samaria. It will be under Jewish sovereignty and Arab administration. ISRAEL AGREES TO RE-DIVIDE JERUSALEM. Arab neighbourhoods will be under Arab sovereignty and Jewish ones under Jewish sovereignty.

THIS PLAN IS SAID TO CEDE FULL AUTHORITY OVER THE TEMPLE MOUNT TO THE MUSLIM ARAB WORLD WHILE ISRAEL WOULD RETAIN CONTROL OVER THE WESTERN WALL AND ITS PLAZA BELOW THE MOUNT. (Muslims do not serve the G-d of Israel; they worship the ancient moon-god of Arabia, Allah. Jerusalem is not mentioned once in their "sacred" writings.) Prime Minister Ehud Olmert has previously said he believes an Arab [terrorist] state will become a reality sooner than anyone thinks. [Arutz Sheva, JNW]

DESTRUCTION OF THE TEMPLE MOUNT CONTINUES

Unprecedented wholesale destruction of precious remnants of the Holy Temple is occurring on a daily basis. The Moslem Waqf, the "caretakers" of the Temple Mount, has been overseeing the digging of meter and a half [five feet] deep trenches running the length and breadth of the Mount.

What is difficult to understand and impossible to forgive is the Israeli government's total indifference to the wholesale destruction of Jewish heritage taking place under the protective watch of the Israeli police in total disregard of Israeli law, international law, the respect due the holy site and the most basic survival necessities of a sovereign nation.

Also guilty is the so-called Israeli Antiquities Authority whose very reason for existing is to prevent this kind of irreversible damage to the nation's archaeological treasures. WHERE ARE THE G-D FEARING JEWS AND GENTILES WHO YEARN AND PRAY FOR THE REBUILDING OF THE HOLY TEMPLE? WILL THEY MAKE THEIR VOICES HEARD? Are people even aware of the extent of the destruction taking place, or has the virtual media blackout kept most people ignorant of the crime being perpetrated?

The coming days are crucial and will provide the answer. It is incumbent upon each and every one who reads these words to spread the news and to raise their voices in protest. Ignorance and apathy are the allies to all of the above mentioned parties who are accomplices to the crime. Photos of the destruction can be seen on the Temple Institute's Web site: http://emetnews.org/cgi-bin/r/x7

HALF OF IDF'S NEW COMBAT OFFICERS ARE RELIGIOUS

Half of the IDF's [Israel Defense Force] young combat officers are religious Jews, according to statistics published as the lead story Sunday in MAARIV, Israel's second largest daily newspaper. The report also says that about 40% of the cadets of the most recent Officer Course in Bahad-1, the IDF's officer training school, were religious; this number refers to all officers, as opposed to just combat officers. These statistics are significant is that many religious soldiers have been refusing orders to evict Jews from their homes in Judea, Samaria and Gaza. If half of the IDF's new officers are religious, this means that the refusal movement could indeed have a deep deterrent impact on the IDF and government when and if it decides to attempt additional pullouts from territory. [Arutz Sheva]

THE US FINANCIAL SYSTEM IS TEETERING. Its US Dollar currency is losing global support, with some outright revolts in crucial territories. The chief private sector export from the US financial sector has been FRAUD-RIDDEN ASSET-BACKED BONDS AND THEIR TOXIC CREDIT DERIVATIVES. What should anyone expect?

The Wall Street hucksters exported fraud. The backlash might be more severe than the soft soap gurus anticipate. LOOK FOR AN INTERNATIONAL BOYCOTT. THE SHOCK WAVES IN THE US FINANCIAL MARKETS ARE PRELIMINARY SYMPTOMS OF BIGGER EVENTS SOON TO COME. STABILITY IDENTIFIED IS NOTHING BUT QUIET BETWEEN TREMORS.

The layers of denial are being stripped, with big names losing credibility. The icon institutions are being irreparably tarnished. Wall Street firms in all likelihood have negative book value here and now! My expectation is for an eventual global boycott of US $-based bonds, gradually gathering like a storm, widening eventually to include even the US Treasurys.

If (WHEN) they lower interest rates, they will set off a global US$ sell off, and trigger the very threat they publicly acknowledge, price inflation. The Europeans are not finished hiking interest rates. The bond yield differential which has supported the US Dollar is soon to do a total vanishing act.

My conclusion has been all along, that the next US Fed action will unleash huge volatile downdrafts in the US$ exchange rates. If they hike rates, the resulting US Economic downturn will be a nightmare, again with dire US Dollar consequences also.

THE US$ IS TEETERING AT THE EDGE OF AN HISTORIC EDGE OF A CHASM. THE US FINANCIAL SYSTEM IS BROKEN, YET ITS GUIDING MAESTROS REMAIN COCKY AND BOASTFUL. MY DEEP SEATED CONCERN IS THAT A POLITICAL TRANSFORMATION IS JUST OVER THE HORIZON, SINCE REMEDY IS IMPOSSIBLE.

The US Defence industry and Wall Street bankers have accomplished the destruction of the US financial and economic system, one more devastating than any enemy could have designed with deep insight and careful planning.

THE US FED WALKS A NARROW PATH, ONE GROWING NARROWER WITH EACH WEEK. THE PATH HAS BECOME A RAZOR BLADE. NO ACTION MEANS DEEP BLOOD LOSS FROM NASTY CUTS. THEY ARE LOSING THEIR INTEGRITY. ON EACH SIDE OF THE PATHWAY LIES A STEP DOWN ON THE USDOLLAR EXCHANGE RATE. THE ONLY CHOICE LEFT IS ANOTHER PRESS OF THE MONEY SUPPLY ACCELERATOR.

THE PEDAL ITSELF HAS A BRAND NAME OF WEIMAR. (Pre WW2 Germany)

In May 2003 a senior Bush official succinctly expressed the administration's neanderthal conception of world politics, declaring: "Real men don't go to Baghdad, they go to Tehran."

Until recently the Iraq catastrophe appeared to have rendered the second option inconceivable. Conventional wisdom assumed that Bush was too discredited and the US military too vulnerable in Iraq to attempt another reckless adventure. Last week, however, the respected analysts Dan Plesch and Mark Butcher from London University challenged this consensus in a chilling 80-page discussion paper considering a war with Iran.

According to the authors, the US military's 'Global Strike' capability makes it possible to "destroy 10,000 targets in Iran in a few hours" using conventional weapons and the option of nuclear weaponry, without
committing significant numbers of troops. Though this attack would be supported by Special Forces, it would not require an invasion. Instead, its ultimate aim would be to turn Iran into an 'oil-rich failed state' by destabilising the regime and annihilating its military infrastructure.

In itself, this report proves nothing. But there are other indications that the Bush administration may not have exhausted its capacity for mayhem. There was last month's designation of the Iranian Revolutionary Guard corps as a global terrorist organisation, making it easier to use real or invented Iranian involvement in terrorist attacks as a pretext for war. Already US and British Special Forces are believed to be operating in southern Iran and last week Bush delivered one of his most bellicose anti-Iranian speeches, warning of "the shadow of a nuclear holocaust" hovering over the Middle East.

Politicians and diplomats are drifting into the same slipstream. Nicolas Sarkozy has added his voice to the anti-Iranian chorus. The Brown government has distanced itself from military action, but the faithful lieutenant will almost certainly fall into line if a war unfolds.

Such an attack would not only devastate Iran, it would lead to renewed conflict in Lebanon, to intensified attacks on British and American troops in Iraq and Afghanistan, and to more atrocities carried out against British and American civilians.

To avoid this outcome, the Western world needs to wake up from its torpor. Otherwise the Bush administration may yet deliver one final act of high-tech slaughter and propel what passes for international order into a new dark age of lawless gangsterism.