American and Chinese officials traded blows over the weekend, setting the stage for a tense G20 summit next month. The head of China's central bank rejected the idea of a big revaluation for the yuan, advocating a slow-acting "herbal medicine" instead. Treasury Secretary Tim Geithner took a swipe at countries with "significantly undervalued" currencies, of which China is an obvious example.

The United States claims to be a loser in the currency wars. But in reality it is winning. The dollar has fallen sharply against most of its trading partners' currencies. On a trade-weighted basis, the dollar is the lowest it has been all year, according to the Federal Reserve major currencies index. The likelihood of an imminent bout of money-printing can keep that trend going for a long time.

China, meanwhile, claims not to be a winner. But that is disingenuous too. While the yuan just hit its highest level versus the dollar since officially abandoning its dollar peg in 2005, it has fallen heavily against most other currencies. The euro, the currency of China's biggest trading partner, has strengthened 14 percent against the yuan. The Japanese yen is not far behind. Various emerging markets, such as Brazil, have also seen their currencies soar.

The gap between winners and losers is widening. With rates as low as can be in the West, money has poured into assets in the East and South. Many Asian stock markets are at multi-year highs - benchmark indices in Indonesia and the Philippines hit records last week. Emerging market bonds too are rallying, as investors scramble for yields. That adds further upward pressure to currencies already out of relative whack with their trading peers. There is no easy answer.

A gradual but sustained revaluation of the yuan versus the dollar - combined with a halt to the dollar's own depreciation - is the least bad way forward. But getting such a deal, as positions become increasingly entrenched, will be tricky. And if both sides refuse to do anything, a currency war could mutate into a trade war - a genuine lose-lose scenario.

More than 3 million demonstrators - one in 20 of all French people - marched yesterday against the President's plans to raise the standard retirement age from 60 to 62. Tens of thousands of students joined the marches for the first time, threatening to radicalise the protests and broaden them into a rebellion against a deeply unpopular presidency.

Militant union branches in the railway and oil-refining industries were pushing last night for a showdown with Mr Sarkozy, who has made reform of the loss-making state pension system the make-or-break issue of his final 20 months in office.

But does it do us or future generations any good to ignore the very serious signs of trouble that are erupting all around us? The truth is that it is about time to wake up and admit how much trouble we are actually in. The US government is absolutely drowning in debt. The entire society is absolutely drowning in debt. We are being slaughtered in the arena of world trade, and every single month tens of billions of dollars (along with large numbers of factories and jobs) leave our shores for good. Our infrastructure is failing, our kids are less educated and our incomes are going down. We have serious, serious problems.

At one time, the US economy was so dominant that it was not even worth talking about who was in second place. That is no longer the case in 2010. Our forefathers handed us the greatest economic machine in history and we have allowed it to fall apart right in front of our eyes. A national economic crisis of historic proportions is getting worse with each passing month, and yet most of our leaders seem to be asleep at the switch.

The following are 24 statistics about the United States economy that are almost too embarrassing to admit...

#1 Ten years ago, the United States was ranked number one in average wealth per adult. In 2010, the United States has fallen to seventh.

#2 The United States once had the highest proportion of young adults with post-secondary degrees in the world. Today, the US has fallen to 12th.

#3 In the 2009 "prosperity index" published by the Legatum Institute, the United States was ranked as just the ninth most prosperous country in the world. That was down five places from 2008.

#4 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.

#5 The economy of India is projected to become larger than the US economy by the year 2050.

#6 One prominent economist now says that the Chinese economy will be three times larger than the US economy by the year 2040.

#7 According to a new study conducted by Thompson Reuters, China could become the global leader in patent filings by next year.

#8 The United States has lost approximately 42,400 factories since 2001. Approximately 75 percent of those factories employed at least 500 workers while they were still in operation.

#9 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#10 Manufacturing employment in the US computer industry is actually lower in 2010 than it was in 1975.

#11 In 1959, manufacturing represented 28 percent of all US economic output. In 2008, it represented only 11.5 percent.

#12 The television manufacturing industry began in the United States. So how many televisions are manufactured in the United States today? According to Princeton University economist Alan S Blinder, the grand total is zero.

#13 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#14 Back in 1980, the United States imported approximately 37 percent of the oil that we use. Now we import nearly 60 percent of the oil that we use.

#15 The US trade deficit is running about 40 or 50 billion dollars a month in 2010. That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.

#16 Between 2000 and 2009, America's trade deficit with China increased nearly 300 percent.

#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.

#18 According to a new study conducted by the Economic Policy Institute, if the US trade deficit with China continues to increase at its current rate, the US economy will lose over half a million jobs this year alone.

#19 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.

#20 Median household income in the US declined from $51,726 in 2008 to $50,221 in 2009. That was the second yearly decline in a row.

#21 The United States has the third worst poverty rate among the advanced nations tracked by the Organization for Economic Cooperation and Development.

#22 Since the Federal Reserve was created in 1913, the US dollar has lost over 95 percent of its purchasing power.

#23 US government spending as a percentage of GDP is now up to approximately 36 percent.

#24 The Congressional Budget Office is projecting that US government public debt will hit 716 percent of GDP by the year 2080.

Please share these statistics with as many family members and friends as you can. It is time to get real. It is time to admit that we have some really big problems.

Forecasters Positive Weather Solutions have already predicted a 'white-out' winter almost as harsh as last winter - with widespread snow, temperatures down to -4F (-20C) and transport chaos. The Weather Outlook, which has an accurate seasonal forecasting record, warned the UK is now being gripped by a bitter series of winters comparable with the harsh 1939-42 winters which made conditions so horrendous during the Second World War. Last winter was the coldest for 31 years, with an average UK-wide temperature of just 34F (1.5C).

Mr Gaze told the western half of the UK to brace for heavy snow - while the eastern half freezes in temperatures as low as 5F (-15C). "The weather pattern may be different this winter, with cold air from the east or south-east, rather than north east," he said. "The heaviest snowfall occurs on the boundary between cold, dry air from the east and mild, moist air from the Atlantic - so it would not be a surprise to see the west of the UK having heavy snowfalls."

"Germany is in serious danger of being overrun by foreigners." It's a sentence one would expect to find on an election poster for Germany's far-right NPD party. As it happens, it's a view that is held by over one-third of the German population - a new survey has revealed that 35.6 percent of Germans agree with the statement.

Additionally, more than 30 percent think that "foreigners come to take advantage of the welfare state" and that when jobs are scarce foreigners should be sent "back to their own country." More than one-tenth would like a "Fuhrer" - the survey deliberately used the German word for "leader" that is associated with Adolf Hitler - who would govern the country "with a firm hand" for the benefit of all.

These are some of the findings of a new study on right-wing attitudes that was presented on Wednesday in Berlin by the Friedrich Ebert Foundation, a think tank linked to the center-left Social Democrats. A quarter of Germans agreed with statements that included xenophobic content. "We've detected a rise in decidedly anti-democratic and racist attitudes in 2010," said the researchers, describing the results of their survey of 2,500 randomly selected people.

The photos show five 11-meter-long Scuds at the Adra base. Three are on trucks in a car park. Two others are in a training area where 20 to 25 people can be made out along with about 20 vehicles. One of the two missiles appears to be mounted on a mobile launcher; another is on the ground.

In 2006, Hezbollah rocket fire into Israel precipitated Israeli air strikes and a ground invasion of Lebanon. Hezbollah's month-long barrage of rockets deeply unsettled Israel; with Scud missiles, Hezbollah can strike all the major cities in Israel.

In April, the Kuwaiti newspaper Al Rai reported that Syrian President Bashar Assad was arming Hezbollah with Scuds, a report Assad denied but both the US and Israel later confirmed. Hezbollah sources told Al Rai that the group had the capability to launch 15 tons of explosives at Israel every day in the case of another war between the two sides, and went on to claim that Hezbollah possesses a wide range of missiles with a heavy payload, including the 1-ton Zilzal missile and half-ton Fateh 110 and M600 missiles.

Silver hit a 30-year peak to approach $24 an ounce, and the Reuters/Jefferies CRB index - a barometer for commodities - rose above 300 points for the first time in two years, as the dollar fell broadly on reinforced expectations of more US easing.

Axel Merk, portfolio manager of the Merk Hard Currency Fund, said that the Fed and other central banks are trying to weaken their currencies to boost economic growth, prompting investors to turn to gold as an alternative currency. "With the weaker dollar, inflation will pick up in the commodity space, which is the most sensitive to monetary stimulus. So, it's only logical that gold will do very well in that environment," said Merk, who manages $500 million in mutual fund assets.

The destructive trade and capital imbalances of the pre-crisis era are back, banking reform appears stuck in paralysing discord, public debt in many advanced economies remains firmly set on the road to ruin, and the spirit of international co-operation that saw nations come together to fight the crisis has largely disappeared.

This was not where we were meant to be in tackling the underlying causes of the crisis and returning the world to sustainable growth. Yet beneath this sense of frustration at lack of progress - and at international organisations such as the IMF and the G20 to bring it about - there is an underlying truth that's often left unspoken; many of the problems in the world economy right now are not international at all, but US specific and can only really be solved by America itself.

The Fed can act, by pouring more money into the economy (QE2), but the Hill is paralysed. A second fiscal stimulus of any size is blocked by political division. More monetary stimulus is all very well, but it's a blunt instrument which struggles to get through to the job creative bit of the economy - small and medium sized enterprises - and threatens new bubbles in emerging markets as abundant liquidity chases yield.

There's no political appetite or will in the US for the long term entitlement reform and tax increases necessary to bring the deficit under control. Nobody believes US Treasury forecasts that public debt will be stabilised by 2014. Much more believable are IMF estimates which see gross US debt rising to well in excess of 110 percent of GDP by 2015. The US has no strategy for the jobless and no strategy for rolling back debt. Little wonder that a renewed sense of gloom has settled on international policy makers.

Water levels were so low that at Guanlei, a river town not far from here, dozens of boats were laid up for more than three months. Alarmed at the drying up of the world's largest inland fishery, the four members of the Mekong River Commission - Thailand, Laos, Cambodia and Vietnam - called a special summit.

"Without good and careful management of the Mekong river as well as its natural resources, this great river will not survive," Thai Prime Minister Abhisit Vejjajiva warned. The commission's political leaders suspected that China was hoarding water behind the dams it has built on the Mekong, exacerbating the impact of the drought.

China presented data to allay these fears. Finally, the rains returned and the tensions dissipated. But the incident highlighted the strains that are being generated as Asia's unslakeable thirst for water collides with the reality of a supply that is limited and, if climate change projections are borne out, may shrink sharply. The Asian Development Bank speaks of a looming crisis that threatens access to water and sanitation needs for millions of households and industries.

Thailand's cabinet agreed to impose a 15 percent withholding tax on capital gains and interest income from foreign investment in government debt in a bid to brake the baht, which has climbed to its highest level since the 1997 Asian financial crisis. Japan said it would wade into the foreign exchange market anew if need be to weaken the yen, despite widespread disapproval by its rich-country peers of a rare bout of dollar buying last month.

And Beijing once again talked down the prospects of a faster rise in the yuan, even as it acknowledged that more money would pour into China over the rest of the year in anticipation that the currency would strengthen. China's insistence that the yuan's rise must be gradual is a huge obstacle to the appreciation in Asian exchange rates that policymakers say are needed to help reduce global economic imbalances. Countries that compete with China fear losing business if they unilaterally let their currencies rise.

The tide of money is rising as markets anticipate that the Federal Reserve will crank up the money printing presses again next month to try to galvanize the stuttering US economy. A second round of quantitative easing by the US central government would aim primarily to lower long-term US interest rates, but it would also pile more pressure on the dollar, which is already languishing near a 15-year low against the yen.

The move comes amid recent allegations that mortgage-servicers, which include units of major banks such as Bank of America Corp, submitted fraudulent documents in thousands of foreclosure proceedings nationwide. The banks say the document problems are technical - largely the result of papers approved by so-called robo-signers with little review - and don't reflect substantive problems with foreclosures.

Still, they have drawn criticism from consumer advocates and state and federal lawmakers. "I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they've just paid lip-service to," said Ohio Attorney General Richard Cordray.

Against the Japanese currency, the dollar dropped to 81.39 yen - the lowest point since April 1995 and below the level which triggered Japanese government intervention in the foreign exchange market on September 15. International Monetary Fund policymakers failed on Saturday to reach a consensus on measures to head off what some see as a looming currency war but pledged to keep working toward easing global economic imbalances.

With economic recovery painfully slow, recent weeks have seen nations from Japan to Colombia intervene to stop their currencies from rising to levels that would make exports prohibitively expensive, sparking talk of a currency war. South Korea on Monday warned that failure to settle disputes about currency policy could fuel protectionism and damage the world economic recovery.

President Lee Myung-Bak, in a lunch with foreign correspondents before next month's Seoul G20 summit, urged members not to pursue only national interests. Analyst Brooks said the euro "may end up being the loser" of the currency war.

"The massive build-up of the foreign-exchange assets would only give more ammunition to those China critics who call for a rapid appreciation of the yuan," said Tom Orlik, a Beijing-based analyst for Stone & McCarthy Research Associates, who formerly worked for the UK Treasury.

US Treasury Secretary Timothy Geithner says a stronger yuan would stimulate demand in China, which replaced Japan in the second quarter as the world's second-largest economy. Inflows of cash threaten to worsen inflation and asset-bubble risks in the Chinese economy and central bank Governor Zhou Xiaochuan said October 8 that the nation needs to avoid the "shock therapy" of excessive appreciation. China's currency reserves topped $2 trillion in the first half of last year.

Exchange rates dominated the annual meeting of the International Monetary Fund in Washington amid concern that nations are relying on cheaper currencies to aid growth, risking trade wars. China was accused of undervaluing the yuan, while low interest rates in the US and other rich nations were blamed for flooding emerging markets with capital. Finance ministers and central bankers pledged to improve cooperation, yet did little to show how they would alter their ways beyond agreeing to let the IMF study the matter.

An IIF policy letter authored by Dallara and dated October 4 made clear that global currency coordination was needed, in the group's view, to prevent a looming currency war. "The narrowly focused unilateral and bilateral policy actions seen in recent months - including many proposed and actual measures on trade, currency intervention and monetary policy - have contributed to worsening underlying macroeconomic imbalances," Dallara wrote. "They have also led to growing protectionist pressures as countries scramble for export markets as a source of growth."

Dallard encouraged a return to the G-20 commitment to utilize International Monetary Fund special drawing rights to create an international one-world currency alternative to the US dollar as a new standard of foreign-exchange reserves.

Days before Mr Gates arrived in Asia, Commander Cao was aboard a frigate in the Yellow Sea, conducting China's first war games with the Australian Navy, exercises to which, he noted pointedly, the Americans were not invited. Nor are they likely to be, he told Australian journalists in slightly bent English, until "the United States stops selling the weapons to Taiwan and stopping spying us with the air or the surface."

The Pentagon is worried that its increasingly tense relationship with the Chinese military owes itself in part to the rising leaders of Commander Cao's generation, who, much more than the country's military elders, view the United States as the enemy. Older Chinese officers remember a time, before the Tiananmen Square protests in 1989 set relations back, when American and Chinese forces made common cause against the Soviet Union.

The younger officers have known only an anti-American ideology, which casts the United States as bent on thwarting China's rise. "Why do you sell arms to Taiwan? We don't sell arms to Hawaii," said Colonel Liu Mingfu, a China National Defense University professor and author of "The China Dream," a nationalistic call to succeed the United States as the world's leading power.