Reid wrote: “I hated the Iraq war. I think I hated it as much as you hate the Affordable Care Act. I could have taken the steps that you are taking now to block government funding in order to gain leverage to end the war… But I did not do that.”

Michael Steel, spokesman for Boehner said : “The entire government is shut down right now because Washington Democrats refuse to even talk about fairness for all Americans under ObamaCare. Offering to negotiate only after Democrats get everything they want is not much of an offer.”

House Representative Michael Grimm said : “There is a strong possibility, if (Democrats) were willing to at least sit down and listen to us, that we could put a package together to solve all of these problems at once so we can get the government funded, stop this shutdown and also deal with the debt ceiling so that we don’t have another crisis a week or two away from now.”

In 1971 the US ‘closed the gold window’ starting an era of global fiat money reference pricing that has been unprecedented in history. Never has the world operated on the basis of no country having a currency tied to something with intrinsic value like Gold.

The ‘petro-dollar’ - a US dollar exchange rate based on the deal struck between Saudi Arabia and America - for the US to buy their oil and for the Saudis to buy US dollars and bonds in return - started a period of oil companies (with the military machinery in their pocket) bullying the world into buying US dollars or getting cut off from oil and dollar supplies led to our current political situation with the US now involved in multiple wars in various oil dependent economies and their satellites - and this lulled many into believing that Gold no longer played a role, but recent events prove these assumptions wrong.

I commented a few weeks ago that to understand the Fed you have to understand that it, along with JP Morgan and other TBTF banks, are one giant hedge fund. And this is a huge negative for supporters of free markets who believe prices should be determined by the market - not the Fed. Surprisingly, a few days later Warren Buffett made the same observation. He said the ‘Fed is the most successful hedge fund in history.’ For Warren this is true. He is on the receiving end of the biggest transfer of wealth in history from workers and savers to borrowers and speculators.

In effect, if you know what to look for, the world is on a gold standard now. The price of gold is telling you that the Fed Ponzi is running at full tilt and that the ravages of having such a destructive mechanism at the heart of the economy are unraveling. Because even with all that effort, the trend of the price of Gold is still higher and at some point the ability to keep it down will fail and then; as Warren Buffett also said; ‘You can see who’s not wearing a bathing suit when the tide goes out.’

A default could cause the nation's credit markets to freeze, the value of the dollar to plummet and US interest rates to skyrocket, according to the Treasury report released Thursday.

Treasury officials hope by laying out potential consequences they will be able to bring pressure on Congress to act. Treasury Secretary Jacob Lew has said he will have used up the extraordinary measures to avoid breaching the debt ceiling by October 17. After that, the government will have to have around $30 billion of cash on hand.

In the event of a default, the US economy could be plunged into a recession worse than any seen since the Great Depression, it said. "The US dollar and Treasury securities are at the center of the international finance system. In the catastrophic event that a debt limit impasse were to lead to a default on Treasury securities, financial markets could be shaken to their core as was seen in late 2008, which resulted in a recession worse than any seen since the Great Depression."

Karen will continue to move along a curved northward path over the central Gulf of Mexico through Friday. During Saturday, Karen will begin to turn toward the northeast. Landfall is expected along the upper Gulf Coast from southeast of New Orleans to west of Panama City, Florida late Saturday night into early Sunday morning.

There is a chance Karen becomes a hurricane prior to making landfall. Winds associated with Karen have reached 65 mph during its trek through the open Gulf waters. The threshold for a tropical system to become a hurricane is sustained winds of 74 mph.

Christine Lagarde’s remarks show the damage done to emerging markets by a recent round of “taper talk”, over the possibility of the US Federal Reserve slowing the pace of its asset purchases and their vulnerability to future changes in the pattern of global capital flows.

“The immediate priority is to ride out the turbulence as smoothly as possible,” said Ms Lagarde. “Currencies should be allowed to depreciate. Liquidity provision can help deal with dysfunctional market behaviour. Looser monetary policy can also help.”

But she warned that countries with inflationary pressures – such as Brazil, India, Indonesia and Russia – have less scope to use monetary policy and that high debt and deficits mean many developing countries have little space for fiscal stimulus either.

“Overall, the global outlook remains subdued,” said Ms Lagarde, in her traditional speech ahead of the annual World Bank and IMF meetings in Washington next week. “In many of the advanced economies, however, we are finally seeing signs of hope. Growth is looking up, financial stability is returning, and fiscal accounts are looking healthier.”

Especially since the start of the Global War on Terror in 2001, the military has been shifting its European center of gravity south from Germany, where the overwhelming majority of US forces in the region have been stationed since the end of World War II. In the process, the Pentagon has turned the Italian peninsula into a launching pad for future wars in Africa, the Middle East, and beyond.

At bases in Naples, Aviano, Sicily, Pisa, and Vicenza, among others, the military has spent more than $2 billion on construction alone since the end of the Cold War - and that figure doesn’t include billions more on classified construction projects and everyday operating and personnel costs. While the number of troops in Germany has fallen from 250,000 when the Soviet Union collapsed to about 50,000 today, the roughly 13,000 US troops (plus 16,000 family members) stationed in Italy match the numbers at the height of the Cold War. That, in turn, means that the percentage of US forces in Europe based in Italy has tripled since 1991 from around 5% to more than 15%.

About the only people who have been paying attention to this build-up are the Italians in local opposition movements like those in Vicenza who are concerned that their city will become a platform for future US wars. Most tourists think of Italy as the land of Renaissance art, Roman antiquities, and of course great pizza, pasta, and wine. Few think of it as a land of US bases. But Italy’s 59 Pentagon-identified “base sites” top that of any country except Germany (179), Japan (103), Afghanistan (100 and declining), and South Korea (89).

In a provocative intervention Jose Manuel Barroso rubbished Mr Cameron’s plan to renegotiate Britain’s relationship with Europe, saying it was ‘unreasonable’ to expect other member states to agree to fundamental changes.

The Prime Minister has staked his reputation on securing a new deal on Europe ahead of an in/out referendum in 2017. Speaking at the Conservative Party conference this week he insisted that other countries were willing to consider Britain’s requests, including his demand that the historic EU aim of ‘ever-closer union’ is scrapped.

He said: ‘We’ve won allies to get powers back from Europe. That is what we will do. And at the end of it - yes - we will give the British people their say in a referendum. That is our pledge. It will be your choice - in or out.’ But, in a series of interviews in Brussels, Mr Barroso said the EU would never agree to fundamental change.

The Presidium of the Polish Episcopal Conference issued a statement in relation to the ban saying that the practice of slaughter without the stunning of the animal, known in Hebrew as shekhita, is "an expression of religious faith and embodies religious freedom."

Ritual slaughter, including traditional Jewish kosher and Muslim halal practices, has been banned in Poland since January 1, after the country's Constitutional Court deemed it incompatible with animal-rights law. The Polish ban over-rides an exemption for religious groups to stun animals before slaughter.

The count by the Office for National Statistics shows that despite the promotion of same-sex marriage and full gay equality by David Cameron and the Coalition, there has been no increase in the past year in numbers of people who say they are gay.

Many will draw parallels with the epic shutdown of 1995 but there is a key difference: For all his many flaws, at least Bill Clinton was leading the USA. Nowadays Barack Obama may occupy the White House but he looks increasingly like a lame duck caretaker awaiting a professional President who will actually take charge.

Post shutdown 'blamestorming' is in full swing and Mr Obama is quick to attribute culpability to all around him. However, given that he ultimately decides what gets spent, is there not an element of hypocrisy in his attempts to avoid responsibility? Barak Obama has overseen a lavish spendthrift shift to the left under his Presidency yet feels it is beneath him to actually negotiate a bigger bar tab.

Congress have dug in their heels over health care changes which are highly questionable. Then again Obamacare needs a serious rethink. That’s not my view: it’s the opinion of the US trades unions who form Obama’s base support. They have realised that heaping costs on employers will result in fewer full-time jobs. That hurts the average citizen but Obama’s aloof plutocrats don’t care. Equally Congressional Republicans are understandably furious that the President seeks to ignore their democratic mandates while being keen to schmooze with an Iranian President elected via a dubious democratic process. Obama behaves with the demeanour of one who has a massive mandate, yet strip away the hype and he was a relatively narrow victor against two frankly mediocre opponents.

On the broader economic front, a crunch looms around October 20th. Then it will be time to return to Congress cap in hand and request not just the cash for another round of drinks but actually a full extension to Mr Obama’s burgeoning bar tab. The debt ceiling will soon be breached once again. The President fails to grasp the fundamental tenet of his expansionist government tendency: Nobody can keep spending citizens’ money indiscriminately and not expect to pay for it along the way.

The illustration on the cover of German business daily Handelsblatt on Wednesday morning fairly well encapsulates the way the US federal government shutdown is being perceived across the Atlantic. The Statue of Liberty stands bound in chains, her torch hand hanging listlessly by her side. Across it reads the headline: "The Blocked World Power."

Many Germans have found it hard to understand American lawmakers' inability to resolve their budget disagreements in time to prevent a shutdown of all nonessential government services, which went into effect at midnight on Monday night. "What Washington currently offers up is a spectacle, but one in which the spectators feel more like crying," writes the conservative daily Frankfurter Allgemeine Zeitung.

"Because Republicans and Democrats, House and Senate, Congress and president could not agree on a stop-gap budget, hundreds of thousands of federal employees were sent on involuntary leave and many agencies were forced to shut down," continues the editorial. "The main actors in this dispute, which brings together many factors, both ideological and political, took a huge risk and, unhindered, proceeded to validate everyone who ever accused the political establishment in Washington of being rotten to the core - by driving the world power into a budgetary state of emergency. The public is left wondering how things could have been allowed to get to this point and why there is so much poison in the system."

Munich's national Süddeutsche Zeitung offers a slightly more depressing take, pointing blame at all sides. "What has already been apparent in America for a few years now is the self-destruction of one of the world's oldest democracies. And the great tragedy here is that this work of destruction isn't being wrought by enemies of democracy, greedy lobbyists or sinister major party donors. America's democracy is being broken by the very people who are supposed to carry and preserve it: the voters, the parties and the politicians."

"At the moment, Washington is fighting over the budget and nobody knows if the county will still be solvent in three weeks," the paper concludes. "What is clear, though, is that America is already politically bankrupt."

For example, temperatures throughout the world have remained relatively constant over the past 15 years. Also, the population of polar bears — the poster animals of climate disaster — has reportedly been growing in the Arctic.

Nevertheless, much of the media lined up in lockstep with the doomsayers as the United Nations‘ Intergovernmental Panel on Climate Change released its first report in six years, its fifth since 1988. “Most aspects of climate change will persist for many centuries even if emissions of CO2 are stopped. This represents a substantial multicentury climate change commitment created by past, present and future emissions of CO2,” states the report, which was released Friday.

Nigel Lawson, a former British energy minister and a conservative member of the House of Lords, writes about the “mumbo-jumbo” of the methods and conclusions of the UN report. “Presenting itself as the voice of science in this important issue, it is a politically motivated pressure group that brings the good name of science into disrepute,” he writes in the London Telegraph.

Mr Lawson, along with others, notes the way the UN reports that mean temperatures have not increased significantly in recent years, an inconvenient fact for global warming activists. “This is brushed aside as a temporary blip,” he says.

If true, the implementation of Obamacare is going to be a whole lot more draconian than Americans have been led to believe. Will Sheehan claims that when he tried to sign up for Obamacare and then register to opt out, he received an ominous warning.

Sheehan’s full Facebook post reads;

“I actually made it through this morning at 8am. I have a preexisting condition (Type 1 Diabetes) and my income base was 45K-55K annually I chose tier 2 “Silver Plan” and my monthly premiums came out to $597.00 with $13,988 yearly deductible!!! There is NO POSSIBLE way that I can afford this so I “opt-out” and chose to continue along with no insurance.

I received an email tonight at 5pm informing me that my fine would be $4,037 and could be attached to my yearly income tax return. Then you make it to the “REPERCUSSIONS PORTION” for “non-payment” of yearly fine. First, your drivers license will be suspended until paid, and if you go 24 consecutive months with “Non-Payment” and you happen to be a home owner, you will have a federal tax lien placed on your home. You can agree to give your bank information so that they can easy “Automatically withdraw” your “penalties” weekly, bi-weekly or monthly! This by no means is “Free” or even “Affordable.”

The federal government has consistently denied that any fines pertaining to Obamacare non-compliance could be seized from bank accounts, despite reports last year that the IRS had hired 16,500 new agents to harass citizens who attempt to evade the new law.

The bank, which has been plagued by scandals since it was founded in 1942 but is now undergoing a radical clean-up, revealed that its earnings for 2012 were €86.6 million (£72.3 million) - more than four times higher than in 2011. Around €50 million of the profit was used to fund charitable works approved by the Pope.

The massive increase in earnings was largely due to a sharp rise in the value of Italian government debt held by the Holy See institution - a result of confidence-boosting measures taken by the European Central Bank and the appointment in November 2011 of Mario Monti as technocrat prime minister of Italy. “You don’t often see that kind of big swing,” Max Hohenberg, the bank’s spokesman, told The Daily Telegraph. “It reflects dramatic developments in the eurozone during that period.”

The 100-page report shows that the bank, which is housed in a medieval stone tower formerly used as a prison for the Vatican’s enemies, owns a wide range of assets, including more than €41 million worth of gold, precious coins and medals.

However, the true significance of the crisis is that it is symptomatic of how America has become, in many senses, ungovernable. Heavily gerrymandered congressional districts, and a wider, decades-long process of social polarisation, have produced an electoral system that packs Congress with partisans who have no incentive to reach accommodation with the other side. Moreover, even if the current impasse can be resolved, there is a much darker cloud on the horizon: later this month America hits the ceiling on its debt limits.

This could provoke an economic as well as a constitutional crisis: in a worst-case scenario, the nation would be forced to default on its borrowing, plunging the global financial system into a chaos to eclipse that seen in 2008. It seems inconceivable that the politicians on Capitol Hill would allow such a disaster to unfold, but nothing can be ruled out, given the obduracy on display.

It is to be hoped that the current shutdown prompts a serious attempt to reach a grand bargain between the parties that puts America’s finances on a more sustainable footing. But given the dysfunction and lack of direction in Washington, it is probably wise to prepare for the worst.