The picture of Bachmann posing as Hitler after a session at his hairdresser, complete with a Hitler hairstyle dyed black and parted on the right and a toothbrush moustache, went viral on Wednesday after it was published by a local newspaper, the Dresden Morgenpost.

Pegida’s popularity has led to widespread fears that Germany is in the grip of a new breed of far-right ideologues, and the picture raised questions about the group’s allegiance to the far-right scene. The image, which had appeared on Bachmann’s Facebook page, was accompanied by the line: “He’s Back,” after Timur Vermes’ best-selling 2012 satirical novel of the same name about Hitler.

Meanwhile a Catholic priest who took part in a demonstration organised by the Pegida-offshoot group Dügida in the western city of Duisburg on Monday has been banned from preaching by his religious elders, after he compared the movement to the Crusades.

But regional leaders worry that a new ultra-violent movement bent on toppling governments and establishing strict Islamic rule could be born from the stubborn Taliban insurgency that carries out frequent attacks in Afghanistan and Pakistan. In Afghanistan, one militant commander said many have turned to IS, or Daish as it is also known, because they are frustrated at the lack of leadership by Mullah Mohammad Omar, the Afghan Taliban chief who has not been seen in public for years.

"Look, we have been fighting for years but we don't have an inch of land in our possession in Afghanistan," said the senior commander, who spoke from the Afghan province of Kunar. "On the other hand, Daish, within limited time, captured vast areas in Iraq and Syria and established Sharia. This is what is being discussed all the time in our circles." "We have serious doubts about whether he (Omar) is alive at all ... Abu Bakr al-Baghdadi is visible and is leading his people," the commander said, referring to the IS leader.

The agreement also included a clause that would answer the rebels' demands to amend the constitution and expand their representation in the parliament and in state institutions, SABA news agency reported. The Houthis are believed to be allied with former president Ali Abdullah Saleh, who was ousted in 2012 after Arab Spring protests. The rebels have vowed to eradicate al-Qaeda, but are also hostile to the USA.

Their slogan is "Allahu Akbar (God is Great), death to America, death to Israel, damn the Jews and victory to Islam." "They come with a virulently anti-American agenda," said Oren Adaki, an analyst with the Foundation for Defense of Democracy, a Washington think tank. "They're against American interests and influence in the region."

The list of places where distrust among the general population is now dominant includes the United States, Japan, Germany, France, Britain, Italy, Russia and Turkey. The picture is particularly stark for the 1,500 business leaders convening for the January 21-24 World Economic Forum's talkfest in the Swiss Alps. Not only has overall trust in business fallen, after clawing back some ground following the 2008 financial crash, but belief in chief executives as credible spokespeople has slumped for the third consecutive year.

Richard Edelman, head of the US public relations firm Edelman, which commissioned the study, said the decrease in trust was startling and was driven by the "unpredictable and unimaginable" events of 2014. A majority of respondents believe technological innovation is happening too quickly, driven by greed among business rather than a desire to make the world a better place. But, in a worrying signal for "old media", online search engines are now more trusted as a source for general news and information than traditional media.

Across all major industries, consumers want stronger regulation of businesses but have little confidence that policymakers will develop and implement appropriate rules.

What’s happening is easy to imagine: faced with the uncertainty of an election that’s been drummed up as the most formidable threat to Europe since the Red Army stood ready to pour through the Fulda Gap at a moment’s notice, Greek citizens are making a run to the banks. Why are they so scared?

Personally, I don’t believe that many people buy into a return to the drachma. What most fear, and rightly so, are capital controls. Greeks remember very well what happened in Cyprus in 2013, when local banks were given a big thumbs-up from Europe to help themselves to their depositors’ accounts. Cyprus and Greece are very closely tied, and many Greeks consider the island a “sister-nation.”

What little trust remained in banks in Greece died that day. People have been nervously looking for signs something similar may happen again in their home country. And they resolved to act at the first sign of danger: banks cannot confiscate money you have under your mattress. Cash can be hidden away.

"We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end." Mr White is a former chief economist to the Bank for International Settlements - the bank of central banks - and currently an advisor to German Chancellor Angela Merkel.

He said the global elastic has been stretched even further than it was in 2008 on the eve of the Great Recession. The excesses have reached almost every corner of the globe, and combined public/private debt is 20 percent of GDP higher today. "We are holding a tiger by the tail," he said.

"QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market," he said. "Even after the stress tests the banks are still in 'hunkering down mode'. They are not lending to small firms for a variety of reasons. The interest rate differential is still going up," he said.

Of all the legion of bad outcomes that result from political ambition, the most striking of our times is surely the euro, an unashamedly political project bolted on to sovereign European nations of long and proud competing traditions in the hope of making them more like the United States, at least in terms of economic prowess. The thing about QE is that it seems to be quite effective when in the midst of a crisis. By propping up the banks, it prevents the worst consequences of a credit crunch.

But how meaningful is it when trying to further stimulate demand thereafter? There is plainly a demand problem in the eurozone, but it is worth pointing out that core inflation is now lower in the US than in Europe, and not that far off in Britain. Not much effect from QE there, then. As it happens, it is likely there will be some kind of mild, cyclical rebound in the eurozone this year, if for no other reason than the much lower energy prices. For this, the ECB will no doubt take credit for saving the day with QE.

Throughout all these contortions, one thing remains clear: underlying problems and contradictions have not gone away. Any respite will be temporary. Europe has fallen prey to a version of Trotsky’s permanent revolution. Regrettably, today’s version is more accurately characterised as perpetual crisis.

And these are just the losses that we know about so far. It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed. But of course the same thing could be said about the crash in the price of oil that we have witnessed in recent weeks. These two “black swan events” have set financial dominoes in motion all over the globe. At this point we can only guess how bad the financial devastation will ultimately be.

But everyone agrees that it will be bad.

In fact, thanks to Abenomics, in the past two years Japan's holdings of US paper have soared by $150 billion, as the BOJ has forced pension funds, banks and citizens to chase higher yielding US paper, while Chinese holdings haven't budged by an inch.

At this rate, look for a historic inversion next month when the December TIC data is released and which, all else equal, will show that for the first time since the financial crisis, China will no longer be America's largest creditor, a spot that will be taken over by insolvent Japan. Yes, the same Japan which as we showed before, is forced to monetize all of its own gross treasury issuance or else suffer a complete bond market collapse.

Today Major General Eyal Ben Reuven, a former deputy head in the Israeli Defense Forces, accused the senior military figures of meeting to plot an attack on Israel. He added that the commanders' decision to meet in Syria could mean that a 'high-level' and 'sophisticated' attack on Israel's northern border is 'imminent'. General Mohammad Ali Jafari, head of Iran's Revolutionary Guards, said: 'These martyrdoms proved the need to stick with jihad. The Zionists must await ruinous thunderbolts.

'The Revolutionary Guards will fight to the end of the Zionist regime... We will not rest easy until this epitome of vice is totally deleted from the region's geopolitics.' Israeli troops have been marshalled along the country's northern border, while an Iron Dome missile launcher has been deployed to destroy any incoming rockets. Senior Iranian politicians are said to be incensed at the death of Allahdadi, which they confirmed yesterday, saying he had been 'martyred' in the name of his country.

Pope Francis has captured the hearts, or the grudging respect of, at the very least, billions of Catholic faithful and nonbelievers alike through his humility, compassion and sincerity. He has brought his Church closer to the people, engaged in dialogue with dissidents and nonbelievers, and opened up his Church to the possibility of reform, all while continuing to defend the core values of the institution. In a cynical, hyper-cosmopolitan world, the Pope stands above the fray, breathing life into an institution that has struggled to maintain its relevance for decades.

Through his leadership Pope Francis has reinvented the papacy, transforming it into perhaps the most influential office in the world, a distinction last held by the papacy during the height of the Holy Roman Empire.