The European Union (EU) has seen many an example of this. Right now, Greece is negotiating with the EU-European Central Bank-International Monetary Fund troika for a new rescue package - all the while Athens sits on an impressive four-million-ounce (125 US tons) stash of gold, about what four large, fully-loaded trucks could carry. The gleaming bars in the vaults of the Greek National Bank are worth 4 billion euros. If Athens were to sell that gold, the Greek state would theoretically be able to meet at least part of the debt payments due soon without any outside help.

Another country in crisis, Portugal, also holds significant amounts of precious metal dating back to the days of Antonio de Oliveira Salazar's regime. Instead of aid, Lisbon could have converted its 13 billion euro's worth of gold into cash. Nick Moore, chief commodities strategist at the Royal Bank of Scotland (RBS) in London, reports that a question often asked by bank clients is why these governments don't sell some of their gold. It is after all recognized worldwide as an asset that can be sold even in tough economic times. The gold in the central banks of Eurozone members together is worth some 375 billion euros.

With that, 4.5% of Euroland's 8.3 trillion euros public debt could be paid off in one fell swoop. In relation to its debt, Portugal is particularly gold-rich. Lisbon could put 383 tons of it on the market and at present rates make 13.3 billion euros. This may, however, not be entirely due to the unwillingness of government's to use their gold reserves to pay back debt. There are institutional hurdles: finance ministers do not have direct access to gold reserves. Central banks are independent institutions not subject to government orders - a requirement of European currency union contracts. Still, those same contracts contain other passages that the Europeans have not respected, such as Article 125, known as the "no bailout clause.''

There is an excellent opportunity to put gold on the market now. The price of the precious metal is only just below record highs. There is also enough leeway as regards the Washington Central Bank Gold Agreement (CBGA), to which a number of central banks are signatories, agreeing not to bring more than a specific amount of the metal onto the market per year.

Of the 400 tons allowed, only 53 tons have been sold during the present accounting period out of which 52 tons came from the reserves of the International Monetary Fund. If the central banks want to sell within the framework of the agreement, they are free to do so until September 26, when sales quotas expire. Many central banks around the world are doing just the opposite, and gold continues to be stockpiled.

For now, Israeli and Palestinian officials said they do not want - or expect - armed hostilities to resume. But both sides fear that one small incident could quickly spin out of control. "We need only popular and peaceful struggle," said Amin Makboul, a top official in Palestinian President Mahmoud Abbas' Fatah Party. "We want to show the world that we are responsible and deserve to be part of the international community."

After the bitter lessons of last decade's Palestinian uprising, the Palestinians do not want to give Israel any "pretext" to claim the Palestinians are not serious about creating a peaceful state, Makboul added. A top Palestinian security official, speaking on condition of anonymity, said Abbas recently issued a straightforward order to his commanders: "I don't want any violent actions in September," the official quoted Abbas as saying. He spoke on condition of anonymity because he was discussing a sensitive internal meeting.

Israeli and Palestinian officials both say the region is headed into uncharted waters if the Palestinians follow through on their pledge to turn to the United Nations. Each side is trying to prepare for all scenarios. Mostly it is in closed forums whose deliberations are so tightly guarded as to suggest a fear that the mere mention of a new Palestinian uprising might somehow contribute to tensions. However, some preparations are more public.

Some 1,000 Israeli military officers held a two-day drill last week to prepare for September, discussing such issues as crowd-control tactics and the latest intelligence, officials say. The army will use the coming months to fine-tune its preparations in hopes of avoiding bloodshed, they said. A Palestinian security official said orders would be for marches to be peaceful, and that tactics like stone-throwing would not be tolerated. He also said rallies would be confined to Palestinian population centers and not be permitted to get too close to Israeli settlements.

The official concurred that unofficial groups could stir up violence, particularly if they try to enter areas off limits to Palestinians, like the main checkpoint linking the West Bank to Jerusalem. He said such scenarios would be "out of our control," since Palestinian security forces are barred from operating there. "If Palestinian demonstrators are killed, the situation could deteriorate," he warned.

They'll be celebrating Independence Day - the birthday of the United States and the 235th anniversary of shaking off the oppressive yoke of British rule. On this day in 1776 a group of 13 colonies broke away to found a new nation free to govern itself as it saw fit, pledging that each citizen would have the unalienable right to "life, liberty and the pursuit of happiness". A nation, as Americans are apt to declare without equivocation, which became the greatest on the face of the earth.

That's the good news. On the flip side, however, a country whose hallmark has always been a sense of irrepressible optimism is in the grip of unprecedented uncertainty and self-doubt. With the United States mired in three foreign wars, beaten down by an economy that shows few signs of emerging from deep recession and deeply disillusioned with President Barack Obama, his Republican challengers and Congress, the mood is dark.

One of the few news stories of recent months that prompted unanimity across the political divide was the arrest of Dominique Strauss-Kahn, then head of the International Monetary Fund, on suspicion of raping a chambermaid in a New York hotel. Only in America, most people here agreed, could the rights of an African immigrant trump those of a powerful, arrogant politician. But even that illusion was shattered last week when it turned out that the accusing woman was a liar with criminal ties who allegedly hoped to profit from the incident. Now, the sleazy Frenchman is poised to resume his presidential quest, doubtless to be fuelled by Gallic anti-Americanism, back home.

The 1980 election was won by Ronald Reagan with his "Morning in America" message. Today, a 10ft bronze statue of Reagan will be unveiled outside the US Embassy in London's Grosvenor Square, which, in another sign of the times, is due to move to Battersea next year because of concerns about its vulnerability to terrorists. Thus far, there is no sign of a new Reagan emerging. More worryingly, the optimism he embraced and came to personify is all but absent in America this Fourth of July.

American Greta Berlin, who was on board the vessel, blames Israel and the United States for the setback. "The Greek government is under a huge amount of pressure from the Israeli government and probably our own government as well," said Berlin. Israel and the U.S. have urged the flotilla not to violate the Gaza blockade, warning that the mission is dangerous and provocative. Last year ago, Israeli naval commandos intercepted a Gaza aid flotilla, and in the botched raid, nine pro-Palestinian activists were killed. The incident sparked international outrage and raised regional tensions.

The United Nations and European Union have backed the Israeli and US position, which calls for the flotilla to dock in Israeli or Egyptian ports and transfer their cargo to Gaza legally over land. But activists reject that, charging that the blockade is illegal and immoral. Speaking from Athens, Greta Berlin says the mission to Gaza will go ahead. "Our intent is to sail; it's always been our intent," Berlin added. "And we don't give up very easily. We will continue to sail until Gaza is free."

The US economy is never completely ready for higher oil prices, which is one reason they take a nasty economic toll when they arrive. But readiness can be enhanced by awareness of the likely outlook for petroleum prices - and the outlook today is relatively grim, although probably not disastrous.

Despite the recent 20% decline from April highs, new highs on crude, heating oil, diesel fuel, jet fuel and gasoline seem likely over the next 12 months. Following some further easing over the summer, the second leg of the long-term bull market in petroleum - the first occurred in 2007-08-probably will begin this fall.

The almost overnight transformation of DSK - as Dominique Strauss-Kahn is widely known in France - from alleged sexual predator to seeming victim of an unscrupulous accuser has riveted and divided the country. The news that the Sofitel maid who had accused DSK of rape had repeatedly lied to prosecutors has also spurred talk of a political comeback for the one-time French presidential contender that only weeks ago was deemed impossible.

Citing a Harris Interactive poll in the French daily Le Parisien, Le Monde noted Sunday that 49 percent of the French people surveyed favored DSK's return to politics while 45 percent opposed it. Le Monde reported that despite the renewed support for DSK, only 43 percent wanted the Socialists to delay primaries to allow Mr Strauss-Kahn - who cannot travel outside the United States because of the charges against him - to re-enter the race. The poll has a margin of error of plus or minus 3 percent.

Leading the charge of those seeking to rehabilitate DSK is Bernard-Henri Levy, the French intellectual and darling of the Left in France. "America the pragmatic, that rebels against ideologies, this country of habeas corpus that de Tocqueville claimed possessed the most democratic system of justice in the world, has pushed this French Robespierrism, unfortunately, to the extremes of its craziness," he said. "In this case, Dominique Strauss-Kahn was no longer Dominique Strauss-Kahn. He was the symbol of arrogant France. He was the emblem of the world of the privileged, odiously sure of their own impunity."

He noted that the DSK affair had laid bare the grievous temptation the world over to sanctify the words of victims. He insisted that one of the biggest victims in the case was the very principle, in the United States, of the presumption of innocence.

He spoke via an audio message broadcast to tens of thousands of supporters gathered in a central Tripoli square. His message comes after France confirmed it had supplied weapons to anti-government rebels, delivering arms to Berber tribal fighters near Tripoli. In the broadcast, played via loudspeakers to gathered crowds in the capital's Green Square, he called on supporters to "march on the western mountains", the area where the weapons had been delivered.

Then he warned Europe that Libyans would seek revenge.

"These people [the Libyans] are able to one day take this battle [...] to Europe, to target your homes, offices, families, which would become legitimate military targets, like you have targeted our homes," he said. "If we decide to, we are able to move to Europe like locusts, like bees. We advise you to retreat before you are dealt a disaster," he added. His message comes just days after the International Criminal Court issued arrest warrants for Colonel Gaddafi, his son Saif al-Islam and Libyan intelligence chief Abdullah al-Sanoussi for crimes against humanity.

Professor McKibbin told the Melbourne Institute conference dozens of European countries now had gross government debts on track to exceed 60 per cent of GDP. ''Japan is forecast to be 200 per cent of GDP, the US is forecast to be over 100 per cent of GDP,'' he said. ''At zero interest rates that can be sustained, but at 5 per cent interest rates countries have to put aside 5 per cent of their GDP every year just to service the debt. That is not sustainable."

''Already consumers aren't spending and investors aren't spending because of the tax increases that are in prospect. 'Greece, Portugal and Ireland don't just need to have their debts written off, they need to have a 30 per cent to 40 per cent depreciation of their real exchange rate,'' he told the conference.

''There are two ways to do that, either pull out of the euro and depreciate by 40 per cent, or have deflation of 40 per cent over the next 12 months. I do not believe any society can survive having a 40 per cent deflation that's been imposed by the International Monetary Fund and the European Central Bank.''

As the US created more dollars to inflate away its debt repayment obligations, countries that are linked to the dollar, including China, India and parts of Latin America, would suffer 1970s-style inflation. ''In India inflation is 9 per cent, in China it is 6 per cent. That inflation is pushing up resource prices for now, but it will have to be brought under control with much higher interest rates,'' he said.

Brussels says the current rebate system is complex and distorts EU spending. The Treasury said the rebate, agreed by Margaret Thatcher in 1984, was "justified" and it would stand firm. The rebate - negotiated by the former prime minister at the Fontainbleau summit - has reduced the size of the UK's contribution to the EU budget over the past 25 years by billions of pounds.

The rebate "offer" comes at a time of a fierce battle between Brussels and member states - led by the UK and France - over its budget. The EU has proposed a 5% increase in its spending in 2011-2012 but opponents say this is "unrealistic" and at a time of national cutbacks the budget should be frozen.

The Treasury said the proposed budget increase was "too large. It is not compatible with the tough decisions being taken in countries across Europe," a spokesman said. And he added: "Britain's rebate is fully justified and we are not going to give way on it."

Higher revenue and accounting maneuvers have allowed the government to keep paying its bills in the interim. Treasury Secretary Timothy Geithner urged Congress to raise the limit and "avoid the catastrophic economic and market consequences of a default crisis." President Barack Obama and Congressional Republicans are engaged in tough negotiations over resolving the issue. Republicans are demanding deep spending cuts as a condition of increasing the limit. But Republicans will not support tax increases, which Democrats say must be part of any deal.

A Democratic official said Thursday that the real deadline for reaching agreement is mid-July. That's because congressional leaders need a week or two to finalize the details and line up votes. The US government will continue to take in revenue after the August 2 deadline passes. But it won't be enough to meet its obligations. The government borrows 40 cents for every dollar that it spends and that adds up to an average deficit of about $125 billion each month, the Treasury says. In May, the government took in $175 billion in revenue and spent almost $233 billion.

The government faces several payments in August that will necessitate a higher borrowing limit, Treasury officials say. About $23 billion in Social Security payments must be made on August 3. And a $30 billion interest payment is due August 15. A default would likely raise interest rates and threaten the economic recovery, analysts say. But some congressional Republicans are skeptical of such scenarios. Administration officials worry that it could take a financial calamity before Congress acts.

Throughout the months of lies and misinformation, one story has stuck: "The earthquake knocked out the plant's electric power, halting cooling to its reactors," as the government spokesman Yukio Edano said at a March 15 press conference in Tokyo. The story, which has been repeated again and again, boils down to this: "after the earthquake, the tsunami - a unique, unforeseeable [the Japanese word is soteigai] event - then washed out the plant's back-up generators, shutting down all cooling and starting the chain of events that would cause the world's first triple meltdown to occur."

But what if recirculation pipes and cooling pipes, burst, snapped, leaked, and broke completely after the earthquake - long before the tidal wave reached the facilities, long before the electricity went out? This would surprise few people familiar with the 40-year-old Unit 1, the grandfather of the nuclear reactors still operating in Japan.

The authors have spoken to several workers at the plant who recite the same story: Serious damage to piping and at least one of the reactors before the tsunami hit. One worker, a 27-year-old maintenance engineer who was at the Fukushima complex on March 11, recalls hissing and leaking pipes. "I personally saw pipes that came apart and I assume that there were many more that had been broken throughout the plant. There's no doubt that the earthquake did a lot of damage inside the plant," he said. "There were definitely leaking pipes, but we don't know which pipes - that has to be investigated. I also saw that part of the wall of the turbine building for Unit 1 had come away. That crack might have affected the reactor."

The reason for official reluctance to admit that the earthquake did direct structural damage to reactor one is obvious. Katsunobu Onda, author of 'TEPCO: The Dark Empire', who sounded the alarm about the firm in his 2007 book explains it this way: "If TEPCO and the government of Japan admit an earthquake can do direct damage to the reactor, this raises suspicions about the safety of every reactor they run. They are using a number of antiquated reactors that have the same systematic problems, the same wear and tear on the piping."

The 36-year-old man, identified as Sami, waited until the Muslims finished their evening prayers at the Grand Mosque in the western town of Makkah, mounted the podium and delivered his brief, fiery speech. "I am Al-Mehdi Al-Montathar... I am a prophet sent (by God) to save and guide you," he told the packed hall before was overpowered by police.

Okaz newspaper said the incident took place on Friday night and that Sami insisted during police interrogation that he was a prophet. It said police would subject him to a medical examination to check if he is suffering from mental illness. It was the latest in a series of incidents involving persons claiming to be Al-Mehdi Al-Montathar (the Chosen Imam Al-Mehdi) at Islamic holy sites in Makkah over the past few months.

All of them had been arrested and medically examined. Muslims believe Imam Al-Mehdi, dubbed "the ultimate saviour of mankind" will eventually reappear as a great reformer who will destroy the beliefs of injustice and ignorance and fill this earth with fairness after it has been filled with injustice and oppression.

Militant union leaders yesterday failed in their plans to bring Britain to a grinding halt. Only schools suffered serious disruption as hundreds of thousands of teachers walked out in strikes across the country. But the promised paralysis of the public sector machine failed to materialise.

Official estimates suggest up to eight in ten civil servants heeded calls to keep the country moving by going to work despite industrial action over pension reforms. Downing Street insisted there had been 'minimal disruption' at border checkpoints, courts, driving test centres, coastguard stations, job centres and benefit call centres. At the Ordnance Survey, of 1,118 civil servants, only one went on strike, while 90 per cent of staff at the Department for Communities and Local Government crossed the picket line.

However, officers had to be taken off patrol in London to replace the 95 per cent of 999 call handlers who abandoned their posts.

Yesterday's strike, while negotiations are ongoing with the Government about how to reduce the huge cost of public sector pensions, split the union movement. It also cast doubt on the ability of unions to muster sufficient support for a wave of industrial action culminating in a general strike in the autumn. Christine Keates, head of the NASUWT - which did not join yesterday's action - said: 'It's important to keep the high moral ground. 'That means if there are negotiations, that you seek to exhaust all other avenues before resorting to industrial action.' One senior Government source said: 'The whole thing has been a complete damp squib.'

He says only immigrants with "something to offer" should be allowed into the country and that too often foreign workers purporting to be skilled take low-skilled jobs that could be occupied by British school leavers. He warns David Cameron that a "slack" attitude to immigration will result in the Coalition repeating the mistakes made under Labour, when the vast majority of new jobs generated before the recession were taken by immigrants.

His comments represent the strongest criticism of immigration since Downing Street strategists advised that the Government should be tougher on the issue. They will be seen as a warning to Mr Cameron not to allow the Liberal Democrats to dictate a softer policy on the issue. Mr Duncan Smith, who is in charge of a shake-up of the welfare system, will make his comments in a speech in Spain and they come as official figures show that the UK population is growing at its fastest rate for 50 years, driven by immigration.

The strike last week against senior members of al-Shabab comes amid growing concern within the US government that some leaders of the Islamist group are collaborating more closely with al-Qaeda to strike targets beyond Somalia, the military official said. The airstrike makes Somalia at least the sixth country where the United States is using drone aircraft to conduct lethal attacks, joining Afghanistan, Pakistan, Libya, Iraq and Yemen. And it comes as the CIA is expected to begin flying armed drones over Yemen in its hunt for al-Qaeda operatives.

Al-Shabab has battled Somalia's tenuous government for several years. In recent months, US officials have picked up intelligence that senior members of the group have expanded their ambitions beyond attacks in Somalia. "They have become somewhat emboldened of late, and, as a result, we have become more focused on inhibiting their activities," the official said."They were planning operations outside of Somalia."