But any form of default could destabilize the global economy and sour already tense relations with big US creditors such as China, government officials and investors warn. Li Daokui, an adviser to the People's Bank of China, said a default could undermine the US dollar, and Beijing needed to dissuade Washington from pursuing this course of action.

"I think there is a risk that the US debt default may happen," Li told reporters on the sidelines of a forum in Beijing. "The result will be very serious and I really hope that they would stop playing with fire." China is the largest foreign creditor to the United States, holding more than $1 trillion in Treasury debt as of March, US data shows, so its concerns carry considerable weight in Washington. "I really worry about the risks of a US debt default, which I think may lead to a decline in the dollar's value," Li said.

Congress has balked at increasing a statutory limit on government spending as lawmakers argue over how to curb a deficit which is projected to reach $1.4 trillion this fiscal year. The US Treasury Department has said it will run out of borrowing room by August 2. If the United States cannot make interest payments on its debt, the Obama administration has warned of "catastrophic" consequences that could push the still-fragile economy back into recession.

"It has dire implications for the economy at a time when the macro data is softening," said Ben Westmore, a commodities economist at National Australia Bank. "It's just a horrible idea," he said.

"The US fiscal situation, if not handled correctly, could turn into a global macro shock," Bullard said in an interview on Wednesday. "The idea that the US could threaten to default is a dangerous one." Some Republican lawmakers have said a brief US default might be acceptable if it forces the White House to deal with large budget deficits, but few Wall Street analysts believe it will come to that.

However, Bullard is worried about reaction overseas if the US government would technically default - basically delaying interest payments for a couple of days. That could happen in the absence of a political compromise on this year's budget. "If it were just US markets, it might not cause too many problems, but we've got people participating in foreign markets who are probably not as tuned in to the US political situation," Bullard said. "The reverberations in those global markets would be very severe. That's where the real risk comes in."

This strange, hypothetical, article, which first appeared on April 24, hammers home again and again the message that an Iranian nuclear test will not lead to disaster. On the contrary, life will go as before except that Iranians will feel better about themselves.

This has the look of a kite being flown, but for whom? It could be intended to get Iranians used to the idea of a nuclear test, and less fearful of international reaction. It could be a gesture of defiance to the world by hardline elements - according to independent experts, Gerdab is run by the Revolutionary Guards' cyber defence command, which is presumably still smarting from the Stuxnet attack. Opposition websites describe it as an enforcement tool for the regime, identifying and threatening independent bloggers inside Iran.

The article comes during a period when Tehran's official stance is particularly defiant and assertive, announcing today that it will triple its production of 20% enriched uranium and shift it to the underground Fordow site, near Qom.

Washington signed on to a "draft declaration on the question of the Malvinas Islands" passed by unanimous consent by the General Assembly of the Organisation of American States (OAS) at its meeting in San Salvador yesterday, an issue which had been heavily pushed by Argentina. In doing so, the United States sided not only with Buenos Aires, but also with a number of anti-American regimes including Hugo Chavez's Venezuela and Daniel Ortega's Nicaragua.

The declaration calls for Argentina and Great Britain to enter into negotiations over the sovereignty of the Falklands, a position which London has long viewed as completely unacceptable. It also comes in the wake of increasing aggression by the Kirchner regime in the past 18 months, including threats to blockade British shipping in the South Atlantic.

The sovereignty of the Islands is not a matter for negotiation, and Britain will never give in to threats from Argentina or its tyrannical allies in places such as Venezuela. The White House recently declared that Britain remains America's most important ally. Now it should live up to its words by supporting Washington's closest friend and partner on matters of vital British interest, including the future of British subjects living in the South Atlantic, whose only wish is to remain free under the protection of the Union Jack.

Consumption in the world's richest countries grew by 3.5 percent, the most since 1984, bringing it back to the level of a decade ago, BP said. Consumption in developing countries - particularly resource-hungry ones in Asia and South America - logged a 7.5 percent increase. "By year-end, economic activity for the world as a whole exceeded pre-crisis levels driven by the so-called developing world," said Christof Ruehl, chief economist for BP.

Last year's surge was led by China, which increased its energy consumption by 11.2 percent, according to BP. That moved China ahead of the United States as the world's biggest consumer of energy, accounting for 20.3 percent of global demand compared with 19 percent for the US, the report said.

China was by far the world's largest consumer of coal, taking 48 percent. The United States had the biggest thirst for oil with 21 percent of global demand, double China's consumption.

The transgenic herd of 300 was bred by inserting human genes into cloned cow embryos which were then implanted into surrogate cows. The technology used was similar to that used to produce Dolly the sheep, the first mammal to be cloned by scientists, in Scotland. The milk is still undergoing safety tests, but with government permission it will be sold to consumers as a more nutritious dairy drink than cow's milk.

Workers at the university's dairy farm have already tasted the milk - and said it is sweeter and stronger than the bovine variety, according to Sky News . "It's good," said worker Jiang Yao. "It's better for you because it's genetically modified." The scientists have also produced animals that are resistant to mad cow disease, as well as beef cattle that are genetically modified to produce more nutritious meat.

The director of the research project, Professor Li Ning, said Western concerns about the ethics of genetic modification are misplaced. "There are 1.5 billion people in the world who don't get enough to eat," he said. "It's our duty to develop science and technology, not to hold it back. We need to feed people first, before we consider ideals and convictions."

The acceleration of the American campaign in recent weeks comes amid a violent conflict in Yemen that has left the government in Sana, a United States ally, struggling to cling to power. Yemeni troops that had been battling militants linked to Al Qaeda in the south have been pulled back to the capital, and American officials see the strikes as one of the few options to keep the militants from consolidating power.

On Friday, American jets killed Abu Ali al-Harithi, a midlevel Qaeda operative, and several other militant suspects in a strike in southern Yemen. According to witnesses, four civilians were also killed in the airstrike. Weeks earlier, drone aircraft fired missiles aimed at Anwar al-Awlaki, the radical American-born cleric who the United States government has tried to kill for more than a year. Mr Awlaki survived.

The recent operations come after a nearly year-long pause in American airstrikes, which were halted amid concerns that poor intelligence had led to bungled missions and civilian deaths that were undercutting the goals of the secret campaign.

This is the first visit by China's defence chief to the US for some seven years. Indeed military-to-military ties have lagged behind improvements in the wider bilateral relationship, which was symbolised by the visit of Chinese President Hu Jintao to Washington in January of this year. General Chen's trip began in unusual style with Chinese and US Army bands playing a joint concert at the Kennedy Arts Centre in Washington DC. Harmony in military-to-military relations is very much the intended tone for this visit. But how far can this transcend a developing strategic rivalry?

During his military tour around America, General Chen will see for himself the extraordinary technical abilities of the US armed forces. China, of course, is racking up some impressive technical achievements of its own. It has developed a land-based long-range ballistic missile capable of striking US carrier battle groups far out to sea.

This "carrier-killer", as it has been dubbed in US naval circles - the DF-21D Anti-Ship ballistic missile - is believed to have achieved an initial operational capability. China's own first aircraft carrier - a reconditioned former Soviet vessel - is close to beginning sea trials. And over recent months there have been tantalising glimpses of China's new, stealthy, fifth-generation fighter aircraft - dubbed in the West the J-20.

As an editorial this week in the state-run China Daily newspaper put it: "Sino-US military ties still face three major obstacles: US arms sales to Taiwan; frequent reconnaissance by US naval ships and aircraft in the waters and airspace of China's exclusive economic zones, and the restrictions imposed by some US domestic laws on exchanges and technical co-operation between the two armed forces."

None of that is going to change in the near-future.

It is there for all to see, somewhat incongruously, right behind Dalian's Ikea superstore. The huge carrier has been years in the making, and it is an unmistakeable sign of China's expanding military and its desire to project Chinese power further beyond its borders than ever before. "An aircraft carrier is a symbol of the power of your navy," says General Xu Guangyu, who used to serve in the PLA's headquarters and is now retired. "China should at least be on the same level as other permanent members of the UN Security Council who have carriers."

Gen Xu now advises China's government on its military modernisation programme. Seven nations currently operate carriers - it used to be eight, but the UK has just withdrawn its last one from service and will have to wait several years for a new one to be built.

"It's also a symbol of deterrence," adds Gen Xu, "It's like saying, 'Don't mess with me. Don't think you can bully me.' So it's normal for us to want a carrier. I actually think it's strange if China doesn't have one."

Flames were spotted on a ridge on the southeastern side of nearby Springerville and columns of orange smoke rose from the hills. Ash rained from the sky, which was filled with thick smoke, and when the sun peeked through, it was blood-red. The blaze has burned 486 square miles (1,259 square kilometers) of ponderosa pine forest, driven by wind gusts of more than 60 mph (96 kph) since it was sparked May 29 by what authorities believe was an unattended campfire. On Tuesday, it became the second-largest fire in Arizona history.

Thousands of firefighters, including many from several western states and as far away as New York, hope to keep the flames from getting into Springerville and Eagar, which sit in grassland at the edge of the forest.

This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product. Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.

The $61.6 trillion in unfunded obligations amounts to $527,000 per household. That's more than five times what Americans have borrowed for everything else - mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.

"The (federal) debt only tells us what the government owes to the public. It doesn't take into account what's owed to seniors, veterans and retired employees," says accountant Sheila Weinberg, founder of the Institute for Truth in Accounting, a Chicago-based group that advocates better financial reporting. "Without accurate accounting, we can't make good decisions."

The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs.

The floods led to the evacuation of about 45,000 county residents, while another 3,000 remained stranded, relief officials said. Essential services including electricity have been disrupted in several towns and cities. More precipitation was forecast for the flooded-hit areas. The long-due rains, however, have brought huge relief from the months-long drought that has savaged several provinces in central China, described as the worst in the past six decades.

It was no coincidence the upheaval in Syria that began two weeks ago amid unprecedented political turmoil across the entire Arab world flared first in the town of Daraa in the country's drought-ridden south. Daraa is one of Syria's poorest towns, jammed with large numbers of people made destitute by the water crisis and long-neglected. "Syria faces an unprecedented water crisis, compounded by poor agricultural infrastructure and management," observed Middle East analyst Victor Kotsev.

But these have been chronic problems across the Arab world for decades, largely because of inept governance by the very authoritarian regimes now wrestling with pro-democracy uprisings. "There is a twist also to the geopolitical ramifications of what is happening," Kotsev warned. "If it develops much further, the unrest could theoretically destabilize the entire region in a more profound way than any other regional crisis."

In this context, Daraa becomes the template of the turbulence sweeping the region and which shows no sign of abating. Israel's seizure of the Golan Heights, a strategic plateau in southern Syria, in the 1967 war cut Syria off from a major aquifer that now feeds the Jewish state along with water sources in still-occupied Palestinian West Bank.

That was compounded by Turkey's decision in the early 1980s to build giant dams on the Euphrates River, a key source of water for Syria, its southern neighbor, across impoverished southeastern Anatolia. The water flow of the Tigris River, too, was cut by the Turkish program for 22 dams, causing a severe reduction in water supplies in Iraq, through which the Euphrates also runs.

The UN Food and Agricultural Organization warned February 3 that global food prices were at an all-time high due to climate change and poor harvests in key grain exporters like Russia and Ukraine. Escalating food prices may not have been the primary force behind the current turbulence but they may soon become so.

"It's just completely out of control," said Ana Gomez. "Just imagine you can't wash your clothes, cook or clean your house." As many as 70 percent of Havana's water pipes are leaking and in need of repair and residents are forced to use buckets and bottles to haul water from trucks to their homes, the report said.

Cuba's rainy season in May and June will put some water back into reservoirs, but a normal rainfall season will not fill them up, officials said.

If the water level drops below 10.5 feet, there is insufficient water for gravity to pull it south through farmlands and into the Everglades, the newspaper reported. Since the dry season began last October, only 11.75 inches of rain have fallen, the lowest since rainfall recording began in 1932.

Even with the rainy season expected in June, climate forecasts suggest the lake could experience low levels the entire summer, Peter J Kwiatkowski, director of resource evaluation, said. "The really sobering thing is that, come November, we could still be in a shortage," Kwiatkowski said. "That is not a good indicator of what we could be looking at for the next rainy season."