"The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now," she said. Two years after the end of the worst of the financial crisis, growth in the United States and Europe is sputtering as government debt burdens surge. Borrowing costs for European banks are rising as lenders balk at providing any but the shortest maturity funds on fears over bank exposure to shaky euro zone sovereign debts. Sharp swings in global financial markets have intensified strains. Complicating the picture is policymaker indecision on both sides of the Atlantic. European leaders are fighting over who should pay the bill for taming a raging sovereign debt crisis.

In the United States, lawmakers and President Barack Obama fought a contentious budget battle earlier this summer that resulted in the loss of the nation's coveted "AAA" debt rating from Standard & Poor's. Federal Reserve Chairman Ben Bernanke warned here on Friday that the fight had shaken confidence and sapped US growth.

Lagarde said the Group of 20 leading economies should use a meeting in November to address the global economy's woes in a convincing fashion, and she used her speech - her first major policy address since taking the helm at the IMF in July - to open a new front in dealing with strains at European banks. She called for a "mandatory substantial recapitalization," through private channels if possible, but otherwise through some form of public, Europe-wide funding, such as the European Financial Stability Facility. Lagarde also warned advanced economies away from tightening their belts so fast that it imperils recovery.

What few in the United States bothered to mention, however, is that the new Chinese carrier was built from an unfinished Ukrainian hull purchased in 1998 - and is the first and only aircraft carrier China has ever had. The United States, meanwhile, has eleven.

The real problem with the US response was not, however, that it exaggerated the Chinese threat. It is that it greatly overestimates the benefits, to America, of the country's continuing quest for global supremacy - politically, economically and militarily. To lament America's decline from a dominant position of unaffordable and unsustainable strategic burdens is, in fact, to mistake an opportunity for a threat. For all of the past decade's concerns around the world about the reach and military assertiveness of US unilateralism, it seems increasingly clear that its principal casualty has been the US itself. America is choking on the edifice of empire and the sooner it's dismantled, the easier will be America's return to a leading - not the leading - position as a dynamic, innovative economy.

Consider briefly what the past decade's economic policies, military interventions and strategic priorities have brought the country: a Great Recession, debts that are fundamentally irrecoverable, a credit crisis, a housing collapse, and two wars with immense costs in lives and treasure. A country that employs more than one million people within its intelligence community, and still is surprised by the Arab Spring, is not being efficient with its resources. Waste and corruption are endemic to any enterprise of this size - and the US military-industrial complex has been no exception.

Rid of the burdens of empire, mentally and physically, the United States will remain a singular country in the world - with its openness, ingenuity, diversity, rule of law, moral purpose and ability to renew itself. An object lesson in the paradox of power, the decline of the American Empire may well be the best thing that can happen to the American Republic - and the sooner the better.

With its enormous cloud band, the typhoon drenched northern provinces with rains for days before pummeling them with fierce winds, setting off landslides and floods and knocking down walls that left at least eight people dead and six more missing, said Benito Ramos, who heads the Office of Civil Defense. Strong winds knocked down a concrete wall, which hit a small eatery in the capital's suburban Quezon City Sunday, killing a man and injuring two others in the latest casualties of the typhoon, police said.

In the northern mountain resort city of Baguio, a garbage dump's concrete wall collapsed and buried three shanties under tons of garbage Saturday, killing two children. Their grandmother remained missing, Ramos said. Five others perished in landslides or drowned, including a fisherman, whose body was found floating Saturday off eastern Catanduanes province after he went missing late last week. A decision by many villagers to flee to safety before the typhoon struck and vigilance helped reduced the number of casualties, Ramos said.

Nanmadol had sustained wind of 121 miles per hour and gusts of 143 mph Friday, becoming the strongest typhoon to hit the Philippines so far this year. It weakened after grazing northern Cagayan province Saturday. It would skirt the northernmost Batanes islands with 75 mph winds Sunday before starting to blow away from the country, Philippine government forecasters said. Nanmadol was expected to hit Taiwan as early as Monday, Taiwan's central weather bureau said.

Irene has already hit North Carolina and Virginia, causing damage and the deaths of at least eight people. The eye of the storm, packing winds up to 80mph (130km/h), is due to hit New York in the next few hours. The storm has weakened to a category-one hurricane since it came ashore but is still expected to be destructive, not least because of flooding.

About two million people have been left without power as the 500-mile-wide (800km) storm barrelled up the east coast. The same number have moved out of the danger zone, most from New Jersey. Some 370,000 people living in low-lying areas of New York City had been told to leave, but Mayor Michael Bloomberg warned those behind to stay put.

"The edge of the hurricane is finally upon us," he told reporters. "The time for evacuations is over. At this point, if you haven't evacuated, our suggestion is you stay where you are. Nature is a lot stronger than the rest of us." The fear is of a storm surge affecting New York's Hudson River, which could potentially inundate the flood defences of Lower Manhattan and cause flooding in the financial district there. Irene has already dumped more than 1ft (30cm) of rain in some places up the east coast and there are reports of storm surges of nearly 10ft

Martin Plaut, BBC Africa analyst writes:- The attack on the UN headquarters indicates a growing sophistication by Boko Haram. The vehicle broke through two security barriers, probably indicating that it was reinforced to withstand the impact. Then its driver detonated the bomb after crashing it into the UN reception area.

Earlier this month, the commander of the US Africa Command, General Carter Ham, said he had several sources of information showing that Boko Haram had contacts with al-Qaeda in the Islamic Maghreb, which operates in north-west Africa. He said it also had ties with al-Shabab in Somalia. There have been other, independent, reports of Nigerians fighting alongside al-Shabab.

Together these reports indicate where Boko Haram is getting the expertise needed to carry out its current wave of attacks. What began as a radical group in northern Nigeria is now part of a much wider Islamist movement.

The way the politically motivated murders of 77 Norwegian children, adolescents and adults by a right-wing extremist were interpreted by the media as an attack on Islam was downright eerie. There were hardly any Muslims among the victims, nor was a mosque in Oslo blown up. It was not the beginning of a crusade against Islam. The victims were overwhelmingly young social democrats, who, if they could be assigned to a religious category at all, were mainly members of the Lutheran state church.

The killer, Anders Breivik, believes that the "Islamization" of Europe is a threat. But what he finds even more threatening is the "cultural Marxism" practiced by his fellow Norwegians. For him, their liberalism is a sign of cowardice and weakness. The term "cultural Marxism" is a reference to "cultural Bolshevism," a concept from the 1920s, when lamentations about a general cultural decline were part of the standard repertoire of conservative political parties. Members of Germany's so-called Conservative Revolution [editor's note: mainly active in the period between World War I and World War II] saw the reasons for that decline in capitalism and consumerism, Westernization and individualization. In this sense, it is entirely correct to identify this mental climate as Breivik's inspiration, as the historian Volker Weiss did in a recent opinion piece for Spiegel online.

But what does one gain from calling the killer a "right-wing brother of the jihadists," as Weiss does, and characterizing the events in Norway as "the Talibanization of the Christian right"? This reinforces the old prejudice of the European left, namely that religion in itself is always and exclusively dangerous. Yet this overlooks the fact that it was political, non-religious worldviews that inflicted endless suffering on humanity in the 20th century. It also suggests that there is a worldwide ecumenical movement of religions that are prepared to use violence, and which have become a threat to the non-religious. In Weiss's mind, the events in Norway represent a "fatal embrace" between "crusaders and jihadists."

The trip wasn't entirely without risk. Three weeks ago, Hans Meier-Ewert, head of the German-African Business Association, traveled to war-torn Libya together with representatives from 20 German companies. Just getting there presented the first challenge, with all regularly scheduled flights to Tripoli having been canceled long ago. The German government made a Transall military transport plane available for the journey, and the mission was headed up by Hans-Joachim Otto, a state secretary in the German Economics Ministry.

In Benghazi, where the rebel movement is headquartered, the group handed over aid goods and medical supplies to the city's hospitals. But the trip was far from just a humanitarian one. The Germans also met with representatives of the Libyan transitional council and of the country's central bank in an effort to pursue economic interests in the country.

The war in Libya, of course, has not yet come to an end, and autocrat Moammar Gadhafi remains at large, likely hiding in a bunker somewhere in Tripoli. But companies from around the world, including several based in Germany, have already begun preparing for peacetime. Once reconstruction begins, business opportunities, they hope, will be plentiful - and lucrative.

"Once oil and natural gas begin flowing again, Libya will be a rich country," says Meier-Ewert. The country is one of the world's largest producers of crude oil and has the largest proven reserves in all of Africa. The country's future government could conceivably finance reconstruction entirely from the billions of profits expected from oil sales.

"Iran believes that whoever is for humanity should also be for eradicating the Zionist regime (Israel) as symbol of suppression and discrimination," Ahmadinejad said in an interview with a Lebanese television network, carried by ISNA. "Iran follows this issue (the eradication of Israel) with determination and decisiveness and will never ever withdraw from this standpoint and policy," the Iranian president added in the interview with the Al-Manar network.

The remarks by Ahmadinejad came one day before the annual anti-Israeli rallies named Qods (Jerusalem) Day, which are held nationwide in Iran on the last Friday of the fasting month of Ramadan. Ahmadinejad on Monday said that Iranians and Muslim nations worldwide should hold Qods rallies and show their willingness to dispose of this "infectious tumor and this regime full of rascality."

The Iranian president provoked international condemnation in 2005 when he said that Israel should be eliminated from the map of the Middle East and transferred to Europe or North America.

The decision was widely expected because in June, Kan had promised to quit once lawmakers passed three key pieces of legislation. The final two bills cleared the parliament earlier Friday. The Democrats will vote Monday for a new leader, who will almost certainly become Japan's next prime minister - the sixth since 2006.

Former Foreign Minister Seiji Maehara is viewed as the front-runner to replace him. Finance Minister Yoshihiko Noda and Trade Minister Banri Kaieda are also viewed as contenders. Looking back on his year and three months in office, Kan said he did all he could given difficulties he faced, including the disasters and a major election defeat in upper house elections last summer that left the parliament in gridlock.

"Under the severe circumstances, I feel I've done everything that I had to do," he said. "Now I would like to see you choose someone respectable as a new prime minister." The 64-year-old Kan has seen his approval ratings tumble amid a perceived lack of leadership after the March 11 earthquake and tsunami and subsequent nuclear crisis. Survivors complain about slow recovery efforts, and radiation from the crippled Fukushima Dai-ichi plant has spread into the air, water and food supply.

While the Hiroshima bomb claimed most of its victims in the intense heatwave of a mid-air nuclear explosion and the highly radioactive fallout from its mushroom cloud, no such nuclear explosions hit Fukushima. There, the radiation has seeped from molten fuel inside reactors damaged by hydrogen explosions.

"An atomic bomb is designed to enable mass-killing and mass-destruction by causing blast waves and heat rays and releasing neutron radiation," the Tokyo Shimbun daily quoted a government official as saying. "It is not rational to make a simple comparison only based on the amount of isotopes released." Government officials were not immediately available to confirm the report.

At Fukushima, Japan declared a 20-kilometre (12 mile) evacuation and no-go zone around the plant after the March 11 quake and tsunami triggered the world's worst nuclear accident since Chernobyl 25 years ago. A recent government survey showed that some areas within the 20-kilometre zone are contaminated with radiation equivalent to more than 500 millisieverts per year - 25 times more than the government's annual limit.

This year, with the US again slowing sharply, markets are speculating that further QE may be round the corner. Shares have rallied all week in anticipation that the Federal Reserve will act to reinvigorate the US recovery. Earlier this month, stock markets plummeted as economic data pointed to sluggish or virtually non-existent growth in the US and Europe. "Recent events have made it blatantly clear that the economy is in a funk," says Paul Dales, senior US economist at Capital Economics.

"The housing market remains at rock bottom and even the manufacturing sector, which had been the shining light of this recovery, has come off the boil." Gold also hit a new record high on Tuesday, before falling back as stocks rallied. Investors see gold as a haven in times of economic uncertainty, and QE is expected to depress the value of the dollar versus gold, which also makes the precious metal more attractive.

Mandatory evacuations have been ordered in parts of Delaware, Maryland, New Jersey and North Carolina. Irene, now leaving the Bahamas, has already caused havoc in the Caribbean. States of emergency have been declared in North Carolina, Maryland, Virginia, Delaware, New Jersey and New York. President Barack Obama also declared an emergency in North Carolina, where Irene is due to make landfall first, on Saturday afternoon. The move allows greater co-ordination between state and US federal disaster management authorities.

"In this emergency I am activating all levels of state government to prepare for any situation that may be caused by Hurricane Irene," said New York Governor Andrew Cuomo. In Washington DC, which is under a tropical storm watch, Sunday's scheduled dedication of the newly opened memorial for Martin Luther King Jr - which President Barack Obama had been expected to attend - has been postponed until at least September.

At 20:00 EDT on Thursday (00:00 GMT on Friday), Irene was gradually moving away from Abaco Island in the Bahamas, and remained 550 miles south south-west of Cape Hatteras, North Carolina, said the US National Hurricane Center. The huge storm boasts hurricane force winds extending 80 miles from its centre, and tropical storm winds reaching up to 295 miles from the eye. Forecasters said Irene could strengthen slightly throughout Thursday night and Friday ahead of its expected arrival in North Carolina on Saturday.

SPIEGEL: Mr. Woolley, you were fund manager for many years, but went on to found a research institute at the London School of Economics to study why financial markets repeatedly go haywire. Now speculators are once again betting against the euro, and share prices for big companies are falling by 20 percent in a day only to shoot back up again. What is going on?

Woolley: The developments in recent weeks have made it quite clear that the markets don't function properly. Things are spinning out of control and are potentially dangerous for society. Only a fraternity of academic high priests connected to the finance markets is still speaking of efficient markets. Still each market participant is pursuing their own selfish interests. The market isn't reaching equilibrium - it's falling into chaos.

SPIEGEL: You've compared the finance markets to a cancer. What do you mean by that?

Woolley: The finance sector can - and is - growing until it overwhelms the economy. In good years the US finance industry cashes in on more than 40 percent of all corporate profits. In bad years they are saved by the taxpayers. The agents are doing a devilishly good job of developing innovative, complicated new products that people can't understand. It gives them the opportunity to earn excess returns and attract the best talent. While they are acting rationally, the result is a catastrophe.

Beyond that point, latest indications put Irene on a path extremely close to or over the mid-Atlantic coast and New York City before plowing into western New England. Irene is expected to track near the mouth of the Chesapeake Bay and Delmarva coast Saturday night, then could pass within 30 miles of New York City Sunday evening as a weakening Category 2 hurricane.

Such a path would lead to severe impacts that could prompt officials to force evacuations. All residents and visitors in the path of Irene should heed these orders if issued and prepare homes and businesses for Irene's onslaught in the meantime. On its current forecast path, Irene would spread destructive hurricane-force winds (gusts between 80 to 100 mph) across the Delmarva coast, eastern New Jersey, New York City, western Long Island and southwestern New England.

A track directly over Atlantic City, N.J., and New York City would bring these intense winds westward to Philadelphia. The strongest and most sustained hurricane-force winds will be measured in the immediate vicinity of Irene's center. Widespread tree damage, major power outages and structural damage to buildings and homes would ensue. Glass windows could shatter along the sides of New York City skyscrapers.

Damaging tropical storm-force winds (winds between 40 and 70 mph) will extend 150 miles westward and nearly 250 miles eastward from Irene's center. These winds will likely reach Richmond, Virginia, Baltimore, Maryland, Philadelphia, Pennsylvania, Albany, New York, and nearly all of New England, threatening to cause significant tree damage and power outages. The winds will have no trouble downing trees where recent flooding and record rainfall has saturated the ground in areas such as Philadelphia and New York City.

Irene will also cause extremely rough surf to pound the entire mid-Atlantic and New England coastline with severe beach erosion and significant coastal flooding an almost certain guarantee. A flooding storm surge will further inundate the coastline.

Local media reported it was felt 82 miles (133km) to the north-west in the capital Washington, as well as in northern Virginia and Maryland. Tuesday's earthquake, one of the most powerful to hit the east coast since 1897, had been felt as far away as Alabama and Boston. In Washington, it opened a small crack near the top of the Washington Monument, prompting officials to indefinitely close the structure.

The National Cathedral lost part of its towering neo-Gothic spires and suffered cracks in its flying buttresses, while many schools and older buildings across the region suffered minor damage. Two nuclear reactors were taken offline as a precaution near the epicentre of the original quake, but no damage was reported.